DIGEST OF st-u TARIFF HEARINGS BEFORE THE J24 COMMITTEE ON FINANCE UNITED STATES SENATE _^^M ON THE BILL H. R. 7456 SIXTY-SEVENTH CONGRESS FIRST SESSION TESTIMONY, BRIEFS, AND LETTERS PREPARED BY THE UNITED STATES TARIFF COMMISSION FOR THE USE OF THE COMMITTEE ON FINANCE UNIVERSITY OF CALIFORNIA. I. OS Ahjr^f i 5 OCT > 2 195.3 ia GOVT. PUBS. WASHINGTON GOVERNMENT PRINTING OFFICE 1922 DIGEST OF TARIFF HEARINGS BEFORE THE COMMITTEE ON FINANCE UNITED STATES SENATE ON THE BILL H. R. 7456 SIXTY-SEVENTH CONGRESS FIRST SESSION TESTIMONY, BRIEFS, AND LETTERS PREPARED BY THE UNITED STATES TARIFF COMMISSION FOR THE USE OF THE COMMITTEE ON FINANCE WASHINGTON GOVERNMENT PRINTING OFFICE 1922 UNITED STATES TARIFF COMMISSION. Office: Old Land Offic, Seventh and E Streets NW., Washington, D. C. COMMISSIONERS. THOMAS O. MARVIN, Chairman. WILLIAM S. CULBERTSOX, Vice Chairman. DAVID J. LEWIS. EDWARD P. COSTIGAN. THOMAS WALKER PAGE. WILLIAM BURGESS. JOHN F. BETHUNE, Secretary. LETTER OF TRANSMITTAL. UNITED STATES TARIFF COMMISSION, Washington, May 18, Hon. P. J. McClJMBER, Chairman Comtinittee on Finance, United States Senate, Washington, D. C.. SIR: In compliance with request of the Committee on Finance, the Tariff Commission transmits herewith a digest which it has pre- pared of the hearings before that committee upon the bill H. R. 7456, and of letters, briefs, and other communications filed with the committee on the same subject. Very respectfully, THOMAS O. MARVIN, Chairman. FOKEWOKD. The following digest of hearings, briefs, and letters before the Committee on Finance on the bill H. R. 7456 has been prepared by the United States Tariff Commission pursuant to a request by that committee. The digest naturally falls into two main divisions, as follows: 1. Testimony and a list of communications expressing views on American valuation as a basis for assessing duties ad valorem. 2. Testimony, briefs, and letters arranged in order of paragraphs. As a caption under each paragraph number are given the subject involved and a list of the witnesses appearing for opposing interests. This is followed by the digests of the material presented by the sev- eral witnesses in the order listed as above. The page numbers cited in the digest refer to pages in the revised edition of 16 volumes covering the oral hearings. TABLE OF CONTENTS. Page. Letter of transmittal Hi Foreword American valuation as the basis for assessing duties List of communications expressing views on American valuation 21 SCHEDULE 1. Paragraph. 1. Acids and acid anhydrides 40 2. Acetaldehyde and paracetaldehyde, etc 43 4. Butyl alcohol and fusel oil 45 5. Ammonium ichthyolate and sugar of milk 46 7. Ammonium sulphate, nitrate, etc 47 8. Antimony oxide and compounds 50 11. Barium chemicals 51 14. Caffeine and tea waste : 53 15. Calcium carbide 54 16. Mercurial preparations 59 18. Chalk; whiting and Paris white - 59 24. Chloral hydrate 61 26. Color lakes; metol and hydroquinone 61 30. Galalith 62 33. Licorice root 62 36. Dyewood extracts 63 39. Gelatin 64 46. Citrate of lime 65 47. Magnesium salts and magnesite 66 48. Camphor and menthol 74 49. Fish oils 76 50. Vegetable oils 77 51. Alizarin assistant 86 54. Lemon and orange oils 87 55. Cocaine , 87 56. Perfume materials ; safrol, etc 88 59. Paris green 89 60. Phosphorus and chlorate of potash 89 62. Artists' colors 89 64. Barytes 90 66. Bone black ; decolorizing and deodorizing chars 91 68. Lampblack 91 70. Iron oxide pigments 92 74. Zinc oxide 92 75. Potassium chlorate, caustic potash, etc 93 77. Soap 93 78. Salt ; nitrate of soda, etc 94 79. Hydrosulphites and sulphoxylates 96 80. Wheat starch 96 84. Thorium; cerium; gas-mantle scrap 96 85. Tin chlorides 97 86. Titanium potassium oxalate 98 88. Zinc chloride 98 SCHEDULE 2. 201. Fire brick __ 98 202. Tiles 99 203. Hydraulic cement 102 VII VIII TABLE OF CONTENTS. Paragraph. Page. 204. Lime 103 205. Keene's cement; gypsum, etc 104 206. Pumice stone 106 207. Fluorspar, china clay, etc 108 208. Mica 114 209. Talc and soapstone 122 211. Graphite 125 212. Earthenware and chinaware 132 213. Chinaware and chemical stoneware 134 217. Bottles 138 218. Blown glassware; illuminating and table glassware, etc 138 219. Window glass 147 223. Mirrors 148 225-228. Optical glass and instruments 149 230. Stained glass , 150 232. Limestone, marbles, etc 152 235. Unpolished granite__. 152 SCHEDULE 3. 301. Pig iron and scrap 153 302. Alloy ores 154 304-308. Special steels 166 309. Thermostatic metal ; forged combinations of metals 178 310. Tinplate 182 312. Metal sashes and frames 182 315. ' Cold-rolled and tempered steel 185 320. Electric storage batteries 186 321. Antifriction balls 186 325. Anvils 186 329. Chains 187 337. Card clothing '. 188 339. Aluminum and enamel ware 189 340. Saws 193 343. Needles 1 195 349. Metal buttons 197 351. Pens 200 352. Metal pencils and lead refills 201 354. Pocketknives ; other cutlery 201 357. Scissors and shears 205 358. Razors 206 359. Dental and surgical instruments 206 360. Scientific instruments 210 362. Files 214 364-366. Rifles, shotguns, and pistols 215 367. Watches 217 368. Clocks * 223 371. Bicycles; motor cycles, etc 226 372. Textile machinery, etc 227 374. Aluminum, crude, scrap, and alloys 229 378. Rolled brass and copper products 232 379. Bronze powder 234 380. Gold leaf 235 382. Tinsel wire, lame or lahn 236 383. Quicksilver 237 385. Nickel 238 386. Tinfoil, pig tin, and tin solder 238 387. Bottle caps 241 389. Type metal and other lead alloys 241 390, 391. Zinc ores, oxide and compounds ; products entering into the manufacture of steel 245 393. Hair clippers, miners' lamps, clothes pins, and twist drills 247 (Various.) Ore and metal products 250 TABLE OF CONTENTS. IX SCHEDULE 4. Paragraph Page. 402. Logs, fir, spruce, cedar, and hemlock; pulpwood 251 404. Logs, mahogany, and other hardwood 252 405. Poles, cedar 255 408. Shingles, cedar 256 411. Reed, rattan, bamboo, and willow 257 413. Porch and window blinds; baskets 263 414. Broom handles and bentwood furniture 263 SCHEDULE 5. 501, 502. Sugar 265 503. Molasses 283 506. Confectionery 289 SCHEDULE 6. 601. Tobacco j 290 SCHEDULE 7. 701. Cattle and tallow 297 706. Sausage casings 306 707. Milk and cream 306 710. Cheese 306 711. Birds and poultry 314 713. Eggs 315 715. Foxes, black or silver 320 718-721. Fish 320 722. Crab meat 324 724. Buckwheat, etc ^ 325 726. Macaroni 325 730. Wheat and wheat products 326 735. Apples i 328 736. Bananas 329 737. Berries 329 738. Cherries 330 740. Preserved fruits, citron peel, etc 330 742. Grapes, raisins, and currants 331 743. Lemons, limes, and grapefruit 332 744. Olives 333 746. Pineapples 334 748. Glace fruits 335 750. Flaxseed and linseed oil 335 751.752,. Bulbs, seedlings, etc 336 754-758. Nuts 336 760. Oil seeds, etc 343 761. Grass seeds 345 762. Field and .garden seeds 346 763. 765. Peas and beans 347 766. Mushrooms 348 768. Onions 349 769. Potato flour, etc 350 770. Tomatoes (Mexican) 350 773. Dried vegetables 351 775. Chicory 352 776. Cocoa 352 777. Ginger 353 779. Hops 353 780. Spices and spice seeds 354 SCHEDULE 8. 802. Distilled liquors 355 X TABLE OF CONTENTS. SCHEDULE 9. Paragraph. Page. 901. Yarn 356 902. Sewing thread, crochet, etc 356 903. Cloth 358 904. Fabrics 358 905. Cloth with extra threads, etc 359 908. Jacquard blankets 1 359 909. Tapestry and pile fabrics 359 911. Quilts 361 912. Braids, cords, etc 361 913. Glove cloth 363 914. Gloves 364 917. Handkerchiefs and mufflers 365 918. Shirt collars and cuffs 365 919. Lace window curtains, nets, etc 366 SCHEDULE 10. 1001. Flax straw, etc 366 1002. Sliver and roving of flax, etc 368 1003. Jute yarns, twine, etc 368 1004. Flax yarns, etc 370 1005. Cordage and rope 374 1006. Linen threads, etc. ; flax fish nets 375 1007. Hydraulic hose 376 1008. Jute cloths, bags, etc 376 1009. Linen towels, etc 378 1010. Linen fabrics 378 1016. Linen handkerchiefs 380 1018. Linoleum, oilcloth, etc 381 1019. Fabrics of vegetable fiber 382 1020. Straw floor coverings 383 1021. Cocoa mats 386 SCHEDULE. 11. 1101. Raw wool 387 1105. Waste 392 1106. Tops, roving, etc 393 1107. Yarn 393 1108. Woven fabrics, light weights 394 1109. Woven fabrics, heavy weight 395 1111. Pile fabrics 396 1112. Blankets 397 1113. Felts, not woven 397 1115. Knit goods 398 1116. Wearing apparel 399 1117. Floor coverings 400 1120. Manufactures of wool, n. s. p. f 402 SCHEDULE 12. 1201. Raw silk 402 1202. Spun silk 404 1203. Thrown silk 405 1204. Sewing thread 405 1205. Fabrics woven in the piece 406 1206. Pile fabrics, etc 415 1207. Ribbons and small wares 417 1208. Knit goods 417 1209. Handkerchiefs and mufflers 419 1210. Shirt collars 419 1211. Shirts 419 1212. Wearing apparel 419 1213. Manufactures of silk, n. s. p. f 420 1215. Artificial silk and manufactures of 420 TABLE OF CONTENTS. XI SCHEDULE 13. Paragraph. Page. 1301. Printing paper, n. s. p. f 422 1302. Wall board, etc 422 1304. Tissue paper 423 1305. Paper bags, wrapping paper, etc 424 1306. Lithographic pictures, cigar bands, etc 430 1307. Writing and drawing paper 431 1309. Bristol board, etc 434 1310. Books, greeting cards, etc 436 1313. Boxboard, wall pockets, etc 442 SCHEDULE 14. 1401. Asbestos manufactures ' 445 1402. Golf balls 451 1403. Beads 452 1405. Felt slippers 452 140G. Straw hats 452 1407. Brushes* 454 1408. Bristles 458 1409. Button forms 459 1410. Buttons, vegetable ivory and pearl 450 1411. Buttons, agate, etc 462 1412. Cork 4fi3 1414. Dolls and toys 466 1415. Crude artificial abrasives 468 1417. Matches 470 1418. Blasting caps, etc 472 1419. Feathers, artificial flowers, etc 473 1420. Furs, dressed or manufactured 475 1421. Hatters' fur 476 1424. Human hair 477 1426. Hair press cloth 477 1427. Fur felt hats 477 1428. Jewelry 479 1429. Diamonds and other precious stones, etc 481 1430. Laces, embroideries, etc 482 1431. Glove leather .1 491 1432. Leather goods 492 1433. Leather gloves 493 1434. Catgut, worm gut, etc 494 1435. Gas mantles 496 1437. Rubber manufactures ' 496 1438. Hard rubber manufactures, etc 497 1441. Violins, etc 500 1444. Rosaries 501 1447. Church statuary 503 1449. Lead pencils, etc 506 1450. Lead refills 508 1451. Photographic goods, etc 509 1452. Pipes and smokers' articles 520 1454. Thermos bottles, etc 520 1457. Beeswax 521 SCHEDULE 15. 1504. Agricultural implements and parts 521 1509. Antimony, crude or needle 524 1510. Archil liquid 525 1513. Sulphide of arsenic 526 1514. American merchandise exported and returned '__ 526 1515. Asbestos, crude 527 1517.- Jute bagging 527 1520. Bibles 529 1523. Bismuth 529 1527. Bones .. 530 XII TABLE OF CONTENTS. Paragraph. Page. 1529-1532. Books 530 1539. Cadmium 531 1540. Acetate of lime 532 1541. Cash registers and sewing machines 532 1542. Cerium 537 1544. Chrome ore : 538 1546. Cresol 538 1548. Guarana (Brazilian cocoa) 538 1549. Coffee 539 1557. Long-staple cotton 539 1559. Metallic arsenic 541 1573. Furs 542 1575. Grasses and fibers 542 1577. Shellac and copal gums 543 1578. Explosives 543 1579. Hair, unmanufactured 545 1580. Ossein r 545 1582. Hides 546 1598. Casein 1 547 1600. Leather and shoes 547 1603. Asphalt 557 1610. Wood pulp 558 1614. Vanadium 566 1620. Copra 566 1625. Essential oils 567 1626. Vegetable oils 568 1627. Mineral oils 570 1635. Muriate of potash and kainite 577 1636. Potassium and sodium cyanides 581 1643. Rice 583 1644. Sago and sago flour 584 1653. Kid leather 584 1654. Cyanides 584 1659. Newsprint paper 585 1663. Pyrites and refined sulphur 590 1666. Tapioca 591 1668. Tea 592 1670. Tin, pig and ore 593 1672. Turpentine and rosin 594 1677. Phonograph records 595 1678. Personal effects 595 1683. Lumber , 595 1685-1688. Works of art 600 1688. Stained-glass windows 602 DIGEST OF TARIFF HEARINGS ON THE BILL H. R. 7456. BEFORE THE COMMITTEE ON FINANCE, UNITED STATES SENATE, SIXTY-SEVENTH CONGRESS, FIRST SESSION. AMERICAN VALUATION AS THE BASIS FOR ASSESSING DUTIES AD VALOREM. [Title IV, section 402.] Witness: Hon. Thomas Walker Page, Chairman United States Tariff Commission. Hearings : Pages 2-29. Kef erring to the Tariff Commission's report on the subject of American valuation, the witness observed that, the proposition being new, information is obtainable thereon only in meager quantities. In those countries where goods are appraised for duty at their domestic value the duties are low and do not form part of what is known as a protective tariff. Consequently, the Government can afford to be much more liberal than would be possible here in their appraisements and interpretations. Conditions in India are similarly inapplicable ; the values of hides for export are there proclaimed by the Government, thus practically converting ad valorem rates into specific. As regards the adoption by the United States of the plan under review, the witness believes that it would be as easy to appraise the great bulk of staple commodities at their American market value as at their foreign value, but difficulties would arise in the case of specialties and new designs. These difficulties, which exist under the present system of foreign valu- ation, would be repeated in different form under the American valuation plan. Replying to questions as to the amount of undervaluation under the present system, the witness believed this to be very small in relation to the amount of goods paying full duty on full value. As to the possibility of undervaluation under the American valuation plan, the witness expressed the belief that " any tax of any kind that is based on value is based on an unstable and insecure basis." At the same time he credited this country's appraisers with having acquired an astuteness and a body of information enabling them in nearly all cases to appraise imported goods at their actual foreign value. The witness does not regard German governmental efforts to fix export prices far in advance of local selling prices as affording reasonable data for judgment. The working of the system has been attended with great irregularity and uncertainty and the suc- 1 2 DIGEST OF TARIFF HEARINGS, H. R, 7456. cess of the step appears to be very doubtful. Again, he regards it as almost impossible to base legislation upon the cost of produc- tion, either in this country or abroad such cost being highly evasive and difficult to reach. But, even with American valuation, he does not think that the incentive to lower the cost of domestic production would be substantially lessened. Neither does he be- lieve that, even with the present wide discrepancy in exchanges, there will be a tendency in the future, more than in the past, to undervalue imports. The desperate needs of foreign countries will compel them to sell at the highest possible prices. The witness's position in regard to the argument that American valuation is equivalent to increased duties was thus stated: "In- evitably if you change the basis from a lower to a higher without changing the rate you necessarily raise the amount." Under the American valuation plan, however, the same amount of duty would be paid on identical articles, irrespective of widely varying pro- duction costs and rates of exchange. In the absence of that plan. " the same article coming to this country from England would pay on a foreign value a much higher duty than the same article if it came to this country from Germany." The great argument in favor of American valuation is that it will remedy, to some ex- tent, the foreign exchange difficulty -" you are penalizing the American consumer if you compel him to purchase under the same tax his goods in a country of high production as in a country of low production." The witness proceeded to quote what he considered to be the chief objection to the American valuation plan its difficulty of en- forcement. The relation between American and foreign valuation is not known at the present time, and it can not be predicted what it will be two or three years hence. While unaware of any better way to meet the situation, he is still of the opinion that the Ameri- can plan will fall short of doing so. Methods would have to be worked out by the appraisers, who would be given a great deal of responsibility and power. Given enough time, the American valu- ation can be made to work in the United States, just as the foreign valuation has been. The plan has been thought of by many for very many years. Witness : Hon. William Burgess, Member United States Tariff Commission. Hearings: Pages 29-45. Radical as the proposed change of base to American valuation may appear to be, the witness believes that the apparent difficulties can be overcome. Such a change is called for by the loss of revenue to the Government through undervaluation, the'loss to American indus- tries of the adequate protection intended by Congress, and the intent and purpose of some foreign manufacturers to deceive United States customs officers and investigators, not wholly unassisted by certain foreign Governments. The witness regards the undervaluation fac- tor as much more serious than many believe. The principal reason, however, for making the proposed change is the difficulty of securing the foreign market value. So long ago as 1912 an appraisement commission, appointed by Secretary Mac- Veagh to investigate the question of foreign valuations, showed the DIGEST OF TARIFF HEARINGS, H. R. 7456. 3 futility of consular certificates and foreign chamber of commerce reports and that the knowledge of the United States appraiser was based almost entirely upon the importer's invoice. There are for- eign goods to-day coming into this market which, when sold here, show a profit of from 100 to 300 per cent of their factory cost. Among further advantages of the American valuation plan is the much lower rate of duty required than when assessed upon foreign valuation. This would tend to correct present popular misconcep- tions in regard to the percentage actually paid in the form of duties. There is no intention of keeping the same rates applied to American valuation that are now applied to foreign valuation. Another accru- ing advantage would be that, instead of dealing with foreign manu- facturers and agents, the Government would be in close touch with American manufacturers and wholesale dealers, who would furnish needed information as required. The power to secure facts would be in the hands of United States officials, who could compel attend- ance of interested parties and who could punish for established fail- ure to produce evidence or for perjured testimony. A much larger revenue could be obtained and the amount of protection would be increased. Other advantages were brought out by the witness, who dealt with the several objections propounded by opponents of the American valuation plan. Witness : Mr. Charles E. McNabb, Law Officer, United States Tariff Commission. Hearings: Pages 45-52 and 64-72. Closely examined, the present system of valuation is far from perfection. Not only are foreign values often unknown to apprais- ers, but importers repeatedly seek relief for undervaluation on the plea that they, too, were ignorant of those values, which may have changed since the date of agreement to purchase. This condition applies also, though in a lesser degree, to "consigned" as distin- guished from " purchased " goods. Importers ask for certainty, not obtainable under the present system. Another difficulty arises in the case of the large body of imports having no ascertainable foreign market value, such as goods manu- factured abroad for further manufacture in the United States. In many such cases the selling price is not available, for none may exist. Reliance upon invoices means simply a reliance upon foreign sources of value, a process involving very little delay or mental effort, but obviously open to objection. It may be said that the effect of the proposed new system will be to waste all the information now in the possession of appraisers and to make a fresh start necessary for these officers, but the wit- ness does not take that view. A further objection, that importers will be burdened with added obligations in regard to valuations, is met by the provision in the bill under which an advisory appraise- ment, carried into the entry by the importer, will relieve him from all additional duties for undervaluation innocently made in error. He will, under the bill, know better than at present what he will have to do and what he will have to pay. At the same time, the witness does not expect overnight a complete and successful sub- stitution of the new system for the old. There will be difficulties in determining what goods are comparable and competitive, the 4 DIGEST OF TARIFF HEARINGS, H. R. 7456. former especially. The appraiser will have to find or appraise a value fairly representative of the United States market value. " He can always find a value. He can always appraise." The witness believes that the risk of manipulating prices is cov- ered by the terms of section 402 of the bill in so far as a combina- tion to raise prices for the purposes of appraisement is concerned. For the rest, the evils apprehended are committed also under the present system, and some attention has been given to remedying them. The same section of the bill deals with the question of de- termining what are the principal markets of the United States. Divergent values in such markets would be taken into account by the appraisers. Witness : Hon. William S. Culbertson, Member United States Tariff Commission. Hearings : Pages 52-64. The witness recognizes the importance of the proposed basis of valuation in relation to the very disturbed economic conditions in foreign countries. While feeling that' it will tend to help in meeting these unusual conditions, he does not regard the proposed plan as a panacea. It has always been difficult, even under normal conditions, to establish costs, here or abroad, but the difficulty is increased by the diversity of exchanges, by the creation of subsidies, and by the im- position of restrictions on commerce, all interfering with the regular courses of trade. The effects of these factors are far-reaching. A German mark, for instance, may have a value of 4, 5, or 6 cents in paying wages to German workmen or for the purchase of goods in Germany, while worth only 1 cents in international exchange. These conditions were being studied by the Tariff Commission on the basis of data recently brought from Europe by two members of the staff. While Germany is placed at a disadvantage under these con- ditions in buying raw material in countries where the value level is higher, she is bound to have for many years a very decided ad- vantage in the fabrication of goods in which labor heavily pre- ponderates. The smaller industries would be specially benefited. The plan under review is one means designed to meet an unprec- edented situation. The inherent difficulties are real, but not in- superable; more objections could be raised against the change from domestic to foreign valuation than in the reversed direction now pro- posed. No doubt there will be friction for a time : things will not run immediately as smoothly as under the existing, long-established sys- tem, but the customs officials would soon be ready to administer the system. There are a great many appeals under the present system and the necessity of some basic decisions must be anticipated.* espe- cially as regards the expressions. " comparable " and " competitive.' The witness discussed in some detail the potential operation of cer- tain provisions by way of illustrating his views and referred to in- vestigations under way in New York with a view to effective com- parison of foreign and domestic values. This feature has a bearing upon a prevalent assumption that American valuation would establish a higher level of value than exists abroad. There are cases where the foreign value is as high as, or even higher than, the American goods. The cases in which America has no comparable and competitive goods constitute a problem. It might be advisable to put on as many DIGEST OF TARIFF HEARINGS, H. R. 7456. 5 specific duties as possible and then select another field of proclaimed and official values, fixed by some organization, commission, or bureau keeping closely in touch with foreign markets. The witness does not see at this time any very great danger of combinations of American manufacturers to take' advantage of the plan. Foreign competition would prevent " pyramiding " here, al- though it is difficult to get at the jobber and the retailer. Witness : Hon. Thomas O. Marvin, Vice Chairman United States Tariff Commission. Hearings : Pages 72-85. The witness detailed the present organization of the United States customs service, with .particular reference to the appraising and collecting of ad valorem duties on imports. The present system involves the securing of foreign wholesale prices by an inadequate force of six foreign agents, experts in their line and having many years' experience. The plan now proposed would .abandon exclusive reliance upon the value of goods abroad, substituting for this an effort to obtain the value of comparable and competing articles in this country. This does not change the real basis of the work, but merely trans- fers the field of operation, with obvious advantages in proximity and familiarity. Even if it be assumed that the present free list of 60 per cent of American imports be reduced to 50 per cent, it must be remem- bered that, of the latter proportion, a very considerable number will bear specific duties and consequently be beyond the scope of the plan. The witness discussed this feature in considerable de- tail, with especial attention to the textile schedules, in which com- plications, if any, would be most likely to occur. He laid stress upon the ability to ascertain American prices as the nub of the proposi- tion, and referred to various United States official publications as already yielding comprehensive data in this field. Meeting the suggestion that American manufacturers might raise their prices to an exorbitant degree in order to increase the duty on the imported article, the witness referred to the competition of American producers, to foreign competition, and to the always pos- sible refusal of purchasers to buy at prices beyond a reasonable limit. He regards the plan as essential either for protective or revenue purposes. Undervaluation, the witness observed, is prevalent in both small and large transactions an evil which will be eliminated by the adoption of American valuation. Witness: Mr. George C. Davis, special agent in charge, Port of New York. Hearings : Pages 85-123. The witness's official duties include the charge of the Comparative Value Report Bureau. He does not regard a mere enumeration of rates as any fair test of the difficulties in the way of American valuation; he emphasizes the difficulties of administration and in adjusting rates to meet the new plan. The proposed application of the domestic value to the imported value would involve an imme- diate and exhaustive search throughout the markets of the United States for comparable and competitive domestic articles; not until 77134_22 2 6 DIGEST OF TARIFF HEARINGS, H. R. 7456. then would it be legally practicable to resort to the alternative method of appraisement in the bill. Much time and extra help would be required for such an investi- gation as must precede actual operations under the proposed plan. After that, a greater expenditure of time than is now given would be necessary to examine merchandise brought in under the new conditions. He thinks the present system capable of improvement, but not by the method proposed in the bill. Entirely new values would have to be set down and, for some time, at least, every one of them would be litigated. More than this, ,a week or two's delay would tie up the import commerce of the country to a serious extent. Another difficulty arises from the enormous volume of imports valued at $130,000,000 per annum reaching this country through the mails by parcel post. The private invoice now largely de- pended upon in appraising this class of merchandise would be value- less under the new plan. The witness went in detail into typical in- stances illustrating the difficulties to be confronted in the determi- nation of values by either of the methods outlined in the bill. One possible result would be the driving out of the American whole- saler by the foreign agent or branch house, taking only their for- eign mill profit. It would be necessary to increase the number of attaches in foreign countries under any modification of the existing system aiming at a closer approximation to foreign values by a process of building from the American selling price. This is the witness's suggestion for the American selling price plan. The Treasury Department would, in any case, have to use their special agents' services, the more so as the examiners could not leave their work to gather data for administering the new law. It might be possible with an expenditure of $27,000 to collect these data in three months, an important feature being to determine the reduc- tion in rates to fit the higher valuation basis. Even with 60 or 70 adequately paid men specially assigned to live abroad, some slight improvements on the present system would be necessary to cover closed markets. The information collected by these men would be useful apart from tariff considerations. As regards the question of exchange, the witness believes that the rates of duty in the Payne- Aldrich bill, if carried into the bill under discussion, would provide, many times over, for the difference of exchange in cost of manu- facture. Witness: Mr. Thomas H. Eddy, representing Marshall Field & Co., Chicago, 111. Hearings: Pages 123-131 and 185-186. Asked for his views on the subject of American valuation, the witness observed that the firm on whose managing staff he is ap- pears both as large domestic manufacturers and as heavy importers. The firm has manufacturing plants in seven States of the Union, but none abroad. The manufacturing business is several times the import business. It is an essential and necessary part of the firm's business to sell for future delivery sales in the spring being intended for late summer and fall. Similarly, as regards buying, the witness can see no way of buying in European markets with any certainty of what costs and domestic prices will be at the time of selling. The DIGEST OF TARIFF HEARINGS, H. R, 7456. 7 goods must actually arrive and pass through the customhouse to determine these factors. To some extent the firm imports textiles competing with those which it manufactures, but most of its im- portations are noncompetitive with what the firm makes in this country. The firm would be satisfied with any reasonable rate of duty, but feels that the bill as drawn does not meet requirements. In illus- tration of this position, the witness cited several imported articles on which the amount of duty, under the bill, would range from 65 to 177 per cent of the foreign cost the price paid abroad by the firm. He also filed a table showing the foreign prices paid for imported commodities in 1914. 1920, and 1921, with due relation to current rates of exchange in each case. Witness : Mr. Jacob de Jong, president of the Flower and Feather Manufacturers of America. Hearings: Pages 132-150. Admitting that there are obstacles -and difficulties in the way of American valuation, the witness believes that if it had been in opera- tion for a hundred years it would be more perfect and effective than the present system, which has been operating for that length of time. There is no certain knowledge of foreign values on the part of officials, added to which is the inequality arising from lowered foreign exchanges. In the witness's native country Holland the system of assessing ad valorem duties has always been on the value in Holland itself, and he knows of no reason why American whole- sale market values can not be ascertained as easily as the foreign market values throughout the world. With only six Treasury offi- cials scattered throughout the world of whom only one is in Ger- many and one in Japan the witness doubts the feasibility of the latter function. Even if 50 men were assigned to Germany alone it could not be done. Enormous stocks of German goods, such as artificial flower wreaths, accumulated during the war, are now being sold to this country below the cost of the raw material. On the other hand, American business of this character, limited before the war, has developed tremendously and, owing to the cited conditions, the goods so produced can not find a market. The witness's own establishment is practically closed. The gross sales of the 200 Amer- ican manufacturers of these goods might amount to $18,000,000 per annum before this German competition arose. The witness referred to the difficulty likely to arise from large importations by parcels post, previously stated by another witness at $130 ,000,000 Value per annum, and to the tendency under the exist- ing system of assessing on foreign value, of excluding imports from countries which are this country's largest customers; that is to say, the countries having depreciated currencies would be favored. An- other consideration is that of $5,270,000,000 total imports into the United States $4,500,000,000 will not be in the slightest degree affected by American valuation. American manufacturers can meet all the world in competition, but they are unable to produce their labor on the same level. Ger- man newspapers are filled with advertisements and some factories have more American orders than they can possibly fill. The element 8 DIGEST OF TARIFF HEARINGS, H. R. 7456. of depreciated currency enters largely into this condition, and the witness knows of no means of meeting it except by the adoption of American valuation. While that system is new and to a certain extent revolutionary, it is not as revolutionary as are world condi- tions to-day. The witness discussed means by which the adoption of the system could be facilitated. Witness: Mr. Patrick H. Quinn, representing (as president) the American Lace Manufacturers' Association. Hearings : Pages 150-153. This American industry is largely the result of the Payne-Aldrich tariff law, which took off, for one year, all duties on lace machines. Investors have been paying for their innocence ever since. One merit of the plan now under review American valuation is that it will give this country the same protection against Germany as against England or France. It is scientifically, legally, practically and, from an American standpoint, the proper method. He minimized the alleged difficulties of its application, arising from a misconception of the number of patterns or varieties in manufacture, and stated that a couple of lace salesmen in New York could furnish the com- mittee in a week's time the market value of every kind of lace sold in that city. Witness: Mr. H. A. Phillips, representing the American Fabrics Co., Bridgeport, Conn., and the American Lace Association. Hearings : Pages 155-157. The interests represented believe the American valuation plan to be easier of administration, insuring more reliable protection by reason of its stable basis. The amount of the duties to be collected under it will depend entirely upon the rates. He agrees with Tariff Commissioner Burgess's formula for computing the amount and percentage in a given case. Within three months after its enactment the American valuation plan will prove easy of administration. Importations of lace from Germany and other parts of Europe have so increased that the company's former customers no longer buy from it. Lace workers in Germany are probably getting the equivalent of $3 per week in wages. Witness : Mr. John R. Rafter, representing the Lace and Embroi- dery Association of America. Hearings : Pages 158-170. The association's membership embraces 39 businesses in New York City and one in Philadelphia, all engaged in importing and dealing in laces, embroideries, etc. The witness filed data, derived from re- plies to a questionnaire, showing aggregates as follows for em- broidery plants controlled by five association firms in this country : Workers employed, 2,080; yearly output, $6,575,000; capital invest- ment, $2,978,000. The represented interests believe that, if the American valuation plan goes into effect, they will be compelled to stop marketing their goods. This conclusion is based on the char- acter of the goods imported by these interests articles of fashion, goods highly seasonal, novelties, and specialties. The goods with very few exceptions are made to order by the foreign manufacturers and take from three to six months to produce. Consequently, mer- chants must know costs in advance, these including the duty. The DIGEST OF TARIFF HEARINGS, H. R. 7456. 9 witness argues that, as regards the item of duty, this determination will not be so easy under the American valuation plan as under the existing system. The witness filed a brief in which the administrative difficulties of the new law and the hazard entailed by importing under its provi- sions are discussed at length. The danger of commercial invasion from Germany, or countries similarly situated, is believed to be grossly exaggerated and, in any case, the remedy applied should not be worse than the disease. Witness: Mr. Henry Howard, representing the Manufacturing Chemists' Association of the United States. Hearings : Pages 170-175. The witness is immediately connected with the Graselli Chemical Co.. Cleveland, Ohio, manufacturing heavy chemicals, acids, dyes, and intermediates. The association represented bears in mind that the adoption of domestic value as the basis for ad valorem duty rates has been advocated by leading American statesmen during the past 100 years and believes that never in the country's history have the advantages of that procedure been so apparent as to-day, when values in foreign markets are unstable and distorted as a consequence of depreciated currencies. As regards the difficulties imputed to the plan, whatever of these may be encountered in obtaining a fair domestic value can never be so great on the average as those inherent in the present system. Flagrant undervaluation exists, which it is practically impossible to prevent. An objection in anotner direction is based upon the supposed possibility of discrimination against other countries, treaties with which call for equality of treatment; but if there be anything in that argument, it carries with it the admission that the present system of specific duties is the grossest discrimination, ignoring as it does the divergence of market values in different countries. Discrimination against high-cost countries prevails under the system of foreign valuation. It seems more likely that a close and accurate statement of value can be obtained from an importer declaring on American valuation than from a declaration referring to a value existing 10,000 miles away. The machinery required for the former procedure would ob- viously be simpler than that demanded by the latter. Witness: Mr. Clement J. Driscoll. representing the Liberty Lace & Netting Works. Hearings : Page 175. The witness, describing the importer as a jobber and distributor, dissociates himself from the idea that American valuation would drive the importer out of business. A complete embargo would make no difference to the importer: all he has to dojs to substitute the tag " Made in America " for " Made in Germany." American pro- ducers are in competition not with the importer but with the European manufacturer. The company represented by the witness urges the adoption of the American valuation plan. Witness: Mr. Dudley Harmon, representing the Manufacturers' Association of Connecticut. Hearings: Pages 175-177. The association, representing about 800 manufacturers of the State, believes American valuation to be essential to adequate protection of DIGEST OF TARIFF HEARINGS, H. R. 7456. Connecticut industries. The establishments making up that body employed in 1920 more than 250,000 men and women, and their ag- gregate capitalization is nearly $1,000,000,000. Recent reports from more than 200 plants showed an average operating schedule of only three and a fraction days per week, with forces reduced from one- fourth to three-fifths or more. Many plants are closed this summer (1921) from two weeks to indefinite periods. No conceivable sacrifice of profits, no change in operating methods or wage schedules, would meet the foreign underselling to which Connecticut manufacturers are now subjected. Witness: Mr. Thomas M. Lane, representing (as attorney) the Madeira Embroidery Importers, New York City, and other im- porters. Hearings : Pages 177-185. Up to 15 years ago the Germans controlled the Madeira embroidery industry, but American capital invested abroad has now largely dis- placed German. The industry is peculiar to the island of Madeira women working at low wages. There is no competitive article in this country. The essential characteristic of novelty, a constant develop- ment of new designs and new articles, makes the application of the American valuation plan to this industry peculiarly difficult. Im- porters believe that they will be absolutely unable to~ determine what the American selling price will be. This, too, notwithstanding that there is practically no competition in this country. The goods are not sold on sample. Mr. David Metzger, president of the Madeira Embroidery Co.. here interposed the remark that a manufacturer can not tell what the profit is going to be in imported goods; nobody can determine that. Mr. Lane, continuing, said he regarded the present system, modi- fied as it is by speculations with respect to currency valuations, as embodying one of the most ideal appraisement methods in force in the world. Opinions to the contrary generally emanate from persons having no experience in foreign values and who greatly exaggerate the attendant difficulties. The bulk of American import trade is in the hands of highly honorable men, jealous of their reputation and sincere in their respect for law. The witness expressed the belief that, as a general economic principle, commodities "retain their gold values irrespective of the fluctuations in exchange. The witness filed a brief, in which it is stated that the bill in its present form will cut off a large source of revenue to the Government, which received in 1920 duties exceeding $2,000,000 on Madeira hand embroideries. Witness: Mr. J. F. Zoller, representing (as attorney) the Ameri- can Valuation Association, New York City. Hearings : Pages 186-197. The association formed " two or three months ago " say. May, 1921 is comprised entirely of manufacturers, over 100 in number. The witness went at length into prewar and present German mark values and German wag^es, quoting, in part, from the official bulletin, Wages, 1921, of the "Ways and Means Committee. "The German -TT " \\f\ ooirl " /-oT-i call 3i1 AO TTT/^TfV f\ cfr\f\r\G in "Miic rmintn~ ATifi to-day," he said, " can sell $100 worth of goods in this country and take that $100 and buy much more labor to-day in Germany with it than he could in 1914. An ad valorem duty imposed in 1914 upon a DIGEST OF TARIFF HEARINGS, H. R. 7456. 11 foreign value at a rate adequate at that time would constitute no pro- tection to-day against German importation." One advantage derivable from the American valuation plan would be that more duty would be got from the low-price country without placing a corresponding burden upon the American consumer. An- other is that it will have a tendency to reduce retail prices by educat- ing the American people as to wholesale prices. The plan would, to a very great extent, prevent undervaluation. It has been urged as a disadvantage that the proposed plan would result in imposing more duty upon imported articles; that will all depend upon the rate of duty, whether fixed iipon American or for- eign valuation. As regards the difficulty of determining American values, the witness believes that function Trill be easier, though pos- sibly more expensive, than the present determination of foreign values. He does not believe that, as has been alleged, the American valuation plan would enable the American producer to write the rates in the bill. The witness filed a brief, recapitulating in considerable detail the arguments presented in his testimony. Witness: Mr. Charles A. Bihler, representing the Allied Lace & Embroidery Manufacturers' Association of New York and the United States Lace & Embroidery Manufacturers' Association of West New York, N. J. Hearings: Pages 197-202. The interests represented urge the adoption of American valua- tion because of the chaotic conditions in central European exchange rates leaving no other remedy available. Prices in Germany on the commodities personally manufactured by the witness are on the average about 30 per cent lower, measured in dollars, than prewar prices. Thq interested factories are not closed, but about 15 per cent busy ; this is largely due to the low prices of goods from Ger- many, although wages in this country have -been reduced to some extent. The Germans are subsidizing industries and labor by selling food products at a loss to the Government a condition also apply- ing to freight rates. Witness : Mr. William P. Clarke, international president Ameri- can Flint Glass Workers' Union, Toledo, Ohio. Hearings: Pages 202-210. During the war it has been possible to build up an industry, espe- cially in the chemical branch, now standing practically idle because of ruinous foreign competition, actual or threatened. Unless the American valuation plan, or something better, is adopted there is no chance to compete with Germany, Czechoslovakia, and Belgium. Even 160 per cent duty would not adequately protect against tha two former countries. In the course of a personal investigation of conditions in Germany (Oct. 7, 1920, to Mar. 13, 1921), he had been told by the head of a glass concern there that he had that morning refused an order for 50,000,000 electric bulbs for America, being unable to supply the demand in his own country ; otherwise, that ware would be coming here. Wages in the American industry have not yet been reduced, but reductions of from 20 to 33^ per cent are being asked by manufao- 12 DIGEST OF TARIFF HEARINGS, H. R, 7456. turers. There are 10,000 skilled workmen, and for each of these at least six other workmen are employed. Witness : Mr. Frederic E. Kip, representing the Pile Fabric Man- ufacturers of the United States. Hearings: Pages 210-213. Using for their product all known textile materials, the fabrics in- cluded in this manufacture are made in four of the large industrial foreign countries Germany, France, England, and Japan. The rep- resented interests consequently regard the adoption of American valuation as an imperative necessity. Under foreign valuation the situation will be simply chaotic, remembering that exchange rates as of July 27, 1921, show these percentages of depreciation from par: Eussia, 99.8 per cent; Germany, 95 per cent; Italy, 78 per cent; France, 60 per cent; and Great Britain, 27 per cent. It is conceded that for the 20 years prior to the war Germany made more industrial progress than any country in the world, the United States not excepted. On a gold basis, the German workman is now receiving about one-fourth of his prewar earnings. So far from these conditions applying to Germany alone, the witness believes that within two years of the restoration of more stable conditions in Russia that country will be able, with her de- preciated exchange and under foreign valuation for duties, to land wheat in the United States at 50 to 60 cents per bushel less than the labor cost alone to the American farmer. Some basis for Ameri- can duties must be found which will not result in great and con- stant fluctuations, and this the American valuation plan will be able to effect. Witness: Mr. Walter S. Hilborn, representing (as attorney) the Novelty Jewelers' Tariff Association. Hearings: Pages 213-221. The witness represents a group of 24 importers of novelty jew- elry, opposing the American valuation feature of the present tariff bill. These importers take the view that the rate provided should adequately protect the American manufacturer, while not high enough to exclude novelty jewelry. The witness dwelt upon the difficulty in buying largely noncomparable articles, not knowing what their cost will be, landed in New York, possibly six or eight months later. He gave figures affording a comparison between the old and the proposed new method, tending to show that under the lat- ter there would be nothing left to be paid the foreigner. A brief filed by the witness substantiates and amplifies his oral testimony. The brief describes the effect of the Fordney bill as mul- tiplying cost to such an extent as to prohibit the importation of any article bearing a substantial rate of duty. Consequently, the Amer- ican valuation feature should be abandoned or, in the alternative, the rate of duty based upon the American selling price should be reduced to a point where the duty bears approximately the same proportion of the foreign cost as is borne by the present act. Witness: Mr. Alpheus Winter, representing (as general manager) the Manufacturers' Association of Bridgeport, Conn. Hearings : Pages 221-225. The witness submitted a petition signed by 66 of the 92 members of the association, asking for the adoption of the American valuation DIGEST OF TARIFF HEARINGS, H. R. "456. 1& plan. The city is at a very low ebb industrially fully 50 per cent below normal a condition not wholly attributable to the cessation of war orders. The petition describes the foreign valuation system as having al- ways been a prolific cause of inaccuracies and consequent discrimina- tion. It has the defect of forcing the Government to violate its obligation to admit the goods of certain friendly countries on equal terms and. on the other hand, converts this country into a dumping- ground for the products of other countries having depreciated cur- rencies. American valuation would, to a large degree, wipe out present customs duty inequalities by requiring like imports to pay the same dollars and cents tax. A continuation of the present sys- tem means the absolute extermination of certain industries. Refer- ence is also made to the subsidizing of industries by the German Government, an added factor to the difficulty of effecting reasonable equality if foreign valuation be adhered to. Witness: Mr. Frederick B. Wilcox, secretary and treasurer, Amer- ican Textile Co., Pawtucket, R. I. Hearings: Pages 225-230. The company, employing about 450 hands, the largest United States plant manufacturing laces, veils, net, and kindred fabrics on Levers machines, favors American valuation, with rates on raw ma- terial and finished goods in proportion. In the past, undervalua- tion has been the great trouble, and to this the exchange situation has been added. So bad have conditions become that, without American valuation, the lace industry in this country is doomed. Exhibits covering prices of foreign yarns, operating results, etc.,, were submitted by the witness. Witness: Mr. H. S. Bowie, representing the American Doll Manu- facturers' Association. New York City. Hearings : Pages 230-234. Dolls are manufactured in only two countries Germany and Japan outside of the United States: the American industry is practically a war product. No dolls of the type imported into the United States are made in Japan except for exportation. This being so. their market value in Japan is absolutely unobtainable. On the other hand, it would be easy to adjust the American valuation on merchandise made in this country, especially as most goods imported into this country are manufactured from samples sent from here, with consequent ease in comparison. Touching the relation of German to American wages, the witness quoted as follows from a long article in the Journal of Commerce and Commercial Bulletin. New York, July 29, 1921 : The current opinion that Germany (given complete freedom to export, which does not at present exist) could undersell the other great commercial nations is unquestionably correct, for, measured by their gold equivalent, German wages are indeed extraordinarily low. In May the average hourly wage of a skilled metal worker was 6.60 marks, which at present dollar exchange is about 10 cents gold. As against this, the average wage paid in New York State for fac- tory labor was about $25, including both men and women, with a percentage slightly in favor of the women. 14 DIGEST OF TARIFF HEARINGS, H. R. 7456. If American valuation goes through, nearly everybody will know what merchandise is going to cost. Drastic legislation of this type is needed. Witness: Mr. H. C. Ives, representing the Toy Manufacturers of the United States of America (Inc.), New York City. Hearings : Pages 234-243. The witness characterized the opponents of American valuation as experts on foreign invoice value or importers and the proponents as experts on American market values or Government officials whose duties require them to weigh evidence. He regards the American business man as the one best fitted to determine American values ; he buys his materials on that basis. Questioned as to the application of this -to products not produced in the United States, the witness replied that the matter would then " be entirely up to the judgment of the customs officials. * If an article is not comparable with any other article in America, they have to use their own judgment." The witness submitted a brief in which existing and potential business conditions are discussed in detail. Witness: Mr. W. O. Coleman, president of the American Flyer Manufacturing Co., Chicago, 111. : Hearings : Pages 244-255. The witness, as a manufacturer, asks for reasonable protection against present abnormal conditions, due to low foreign labor costs and depreciated currencies. His company is exclusively engaged in making toy trains, of which it made 875,000 complete outfits in 1920. At that time 400 persons were employed; to-day the plant is com- pletely closed down. German trains are now coming in, since the first of 1921, at prices which divert business from American plants, even to the extent of canceling orders already booked. Detailed examples of comparative prices were cited by the witness, who stated, on the authority of the United States Bureau of Foreign and Do- mestic Commerce, that 11 months' imports of toys, ending May, 1921, amounted to $9,122,000, as compared with $4,931,000 for the corre- sponding period a year earlier. The witness is confident that American valuation will give the American manufacturer a chance to continue in business; it will not inflate prices to the consumer. With American valuation a duty of 40 per cent would insure protection, while without it probably 100 per cent would be necessary. Witness : Mr. Joseph F. Lockett, counsel for the New England Im- porters and Traders' Association (Inc.). Hearings : Pages 255-263. The organization represented has 100 members engaged in import- ing various kinds of merchandise into New England. The associa- tion is vehemently opposed to the bill. Neither as regards the alleged necessity of a greater degree of protection to meet abnor- mal exchange conditions nor as to the existence of undervaluation does it agree with the advocates of American valuation. The witness did not wish to discuss the exchange question if he could help it, another witness being scheduled in that connection, but he felt .that there had been an absence of proof in the charges con- cerning undervaluation. Unexplained, he regards that term as t pr , h( DIGEST OF TARIFF HEARINGS, H. R. 7456. 15 implying fraud on the part of an importer. In Boston, at any rate, cases of undervaluation are very rare. ' Undervaluation has become an obsession with some American manufacturers, among whom there has also been a tendency to believe that, because of the tremendous depression in business, the enactment of the American valuation plan will prove to be a panacea for all ills. The witness suggests, in the event of American valuation being adopted, the insertion of a provision shifting the burden of proof. Then, when the Government raises the value upon appraisement, it would have to establish its case before the courts by a preponder- ance of evidence. That is the reverse of the present practice. The witness, with many years' experience in the trying of customs cases, has never had any difficulty in obtaining evidence of foreign value abroad: neither has the Government in the cases coming to his knowledge. Witness: Mr. Thomas J. Doherty, representing the National Council of American Importers and Traders, New York City. Hearings: Pages 264-299 and 339-342. This organization of over 300 members, located in practically all the large and in some of the smaller cities of this country, is the outcome of a meeting held early in 1921. T^ie present outlook is that importers will need all the assistance they can summon to their aid. The council regards as its principal interest in pending tariff legislation the question of American valuation. In particular it is amazed at the proposed grant of power to the appraising officers under the second half of section 402 of H. E. 7456. The section is unsound economically and out of harmony with the canons of good business. It does not comport with the facts and realities of inter- national commerce nor with the transactions of business life. It is manifest that an importer can not know what the prices prevailing are or will be a year or nine months hence. There may, too, be no comparable article at the time an order is placed, yet one may pos- sibly be made in the interim, and the importer will not know on which basis his goods will be appraised. Much depends upon the definition of the word " comparable." If " identity " is meant, say so ; but there would be in that case so limited a class that it is not worth while to upset the whole tariff system of the United States. A large part of the witness's time was occupied by a discussion of possible rulings on various imports, with particular reference to the difficulties likely to arise in regard to comparability and undervaluation. He regards undervaluation as a bugaboo that has been invoked at every tariff hearing since time out of mind. He does not think it is justified by anything in the way of facts or records. Questioned as to inconsistencies to be found in going through statistics of imports and duties, such as the same article being charged 20 cents at one time and $2 at another, he had himself been surprised by them, but surmised that they were due to varying conditions of trade or extraordinary transactions. The witness filed (pp. 291-299) a " Summary statement based on American selling price, consisting mainly of several pages of tables, covering 206 individual import transactions. He also filed (pp. 339- 342) a "Supplementary statement," mainly directed in refutation of 16 DIGEST OF TARIFF HEARINGS, H. R. 7456. the argument that the American valuation plan is put forward only to meet an emergency due to the fluctuations of foreign exchange. Page 342 contains a letter from, and an affidavit by, Mr. R, E. Farrow, commissioner of customs and excise, Ottawa, Canada, deny- ing certain statements made bv Mr. Doherty (not referred to in this digest) in regard to Canadian customs administration. On pages 5419-5420, Mr. Doherty explains that any false or misleading impres- sions caused by statements of his were entirely unintentional on his part and may have been due to assumptions, by others, that Mr. Farrow was the only source of his knowledge. Witness : Mr. Emil Pevny, manufacturer of cotton gloves, Oswego, N. Y. Hearings: Pages 300-305. The American industry represented by the witness did not exist before the war. During and since the war, the witness has exported these products to Australia, New Zealand, Norway, and South Amer- ica. Everything in this connection hinges upon German importa- tions, as it is impossible to compete with German wages one-tenth of American to-day. It must be remembered also that while do- mestic manufacturers are using the finest grade of American-grown cotton, the Germans go to Liverpool and buy Egyptian. " Every pair of German-made cotton gloves coming into this country to-day is of Egyptian yarn, and we have to lay idle and see this market flooded with German importations." German-made gloves are being shipped to Switzerland, minus only the fasteners. After the clasps have been put on there, the consular invoice is obtained and the gloves are sent to Canada as Swiss goods. The witness filed a brief in which he refers to American valua- tion as " the only way to safeguard us from a most resourceful and unscrupulous competitor." Witness : Mr. Charles C. Ormsby, representing manufacturers of suecled cotton fabric and gloves. Hearings : Pages 305-308. This is a post-war industry which, up to the end of 1918, had at- tained considerable importance. Addressing himself to the question of American valuation, the witness regards the existing system of foreign valuation of imports as a failure. Results of the present tariff, in money to the United States Government, have been far below the estimates, this being accounted for by low valuation (due to low foreign wages) or to evasion of duty. Owing to German competition the domestic industry is to-day at a standstill. The popular understanding of dutiable value being the American price, it seems due to the American people that their views and thought should be considered. The law should represent public opinion. In a brief filed by the witness, this country's obligations to other countries under the most-favored-nation clause of treaties are empha- sized. Only by the adoption of American valuation can other coun- tries, with varying costs of production, be placed on terms of equality as regards American customs duties. The question is asked : " Why continue .a tariff law that practically vests in foreigners the ap- praisal of duties over which the United States has no practical control?" DIGEST OF TARIFF HEARINGS, H. R. "456. 17 Witness : Mr. Ernest Jones, manufacturer of sueded cotton cloth, Gloversville, N. Y. Hearings : Pages 308-309. This cloth, before the war, was imported by glove manufacturers who have since succeeded in having it made in this country, first from English and later from American yarns. At the present time German goods are again flooding this market, and there is absolutely no de- mand for the domestic product. The machinery of closed mills will be restarted if American valuation can be secured. From the witness's recent observation, similar conditions prevail in Great Britain, where German-made gloves are offered in dry- goods stores at half the price of English goods. Witness: Mr. Thomas H. Hall, representing the Fabric Glove Manufacturers' Association, Jersey City, N. J. Hearings : Pages 309-310. Starting this business during the war as an absolutely new in- dustry, a, maximum production of 1,300,000 dozen was attained in 1918. Since then the business has been declining, the vanishing point being nearly reached. A review of labor conditions demonstrates that nothing but the American valuation plan can help the industry through. The low wage scale of German workers was referred to, showing the actual labor costs in Germany to be little more than one-half of what they were in 1914, while American labor costs have doubled in the same period. Taking into account differences accord- ing to proficiency, domestic producers are paying to-day ten times the German labor costs. Witness: Mr. Charles S. Hollander, vice president of Rohm & Haas Co., Bristol, Pa. Hearings: Pages 310-312. The company makes chemicals for the textile and leather trades. A study shows that if the American valuation is withdrawn from the schedule of rates in H. R. 7456 the company will have no pro- tection whatever. Even as the rates stand, the protection is so scant that it may be necessary in some instances to stay out of the busi- ness permanently. The competition comes mainly from Germany, and to some extent from England. Since December, 1920, enough sodium hydrosulphite has been imported from Germany to supply the American market for almost three-quarters of a year at the 1913 rate of use. There is, in the case of chemicals, no difficulty whatever in show- ing comparable and competitive goods or in ascertaining the Ameri- can value. Witness: Mr. W. W. Nichols, representing the Electrical Manu- facturers' Council, New York City. Hearings : Pages 312-313. The witness confined his testimony to his experience as head of an American industrial commission, traveling through France in 1916, when much valuable information was gathered. The follow- ing quotations from the report of the commission bear upon the need for changes in existing customs methods the witness being con- tent to ' leave the rest to your imagination." 18 DIGEST OF TAKIFF HEARINGS, H. R. 7456. The commission anticipated that it would be called upon to discuss this much-mooted question at Limoges, and made its preparations accordingly. Reference is made to it here only because there have arisen difficulties through our tariff administration which, in their continuance, can only act as deter- rents to the extension of our trade (p. 20). An international device (tariff), which should be certain and uniform in its action, is so disturbed by fluctuations of both rates of exchange and prices as to make proper application impossible and to appear to impugn the honesty of innocent parties. For the sake of the world trade, which is destined to become of growing importance in the commerce of the United States, most serious and early attention should be given this phase of our tariff law (p. 21). Another very important matter affecting our trade with France is the tariff question. Past tariff difficulties between France and the United States led to a continuous reference to the subject on the part of our French friends. * * * All France is informed regarding the notorious Limoges china case. This unpleasant incident has left a profound resentment in French manufac- turing circles, and was frequently used as an illustration of what was found most objectionable in our customs administration methods. The difficulty of establishing the dutiable market value and the unwillingness of our Treasury Department to accept their invoice value as correct, are annoyances ; but, above all, the insistence of our special Treasury agents upon the right to inspect private books, the labor costs, the costs of raw materials, etc., is particularly resented. They feel this last to be an unwarranted intrusion upon the private affairs of the citizens of a friendly nation, and they can not be convinced that information of this kind, if given, will not be diverted to improper use and reach their competitors in the United States. Witness: Mr. C. T. Kiotte, representing the Veiling Association of New York. Hearings : Pages 313-316. Buying both abroad and in the United States, the witness does not buy abroad from stock for immediate delivery, but goods to be manufactured and delivered anywhere from one to six months from the date of order. Under the American valuation plan it is going to be impossible for the importer to tell what merchandise is going to cost him, for he will not know whether or not a comparable American article will have been made by the time his shipment has been made. Most of the members of the association are jobbers, selling to re- tailers throughout the United States; as the overhead expense amounts to at least 20 per cent, gross, it is impossible to figure on less than 30 per cent gross profit. In this way an article costing $1 abroad, selling under the present duty at $2.35, would have to be sold, under American valuation, at the impossible figure of $4.20 in order to make the same profit. Veils are now being imported from France which can not be made here at any price. Veilings can not be appraised by adding a fixed percentage to an assumed cost of production; they are artistic goods articles of style with thou- sands of patterns. Witness : Mr. Nathaniel Van Doren, customs agent, United States Treasury Department, Port of New York. Hearings: Pages 316-323. In his official experience of 18 years the witness has met with con- siderable undervaluation by foreign shippers, and in some cases by domestic importers. Not all such undervaluation was fraudulent; some of it has been due to changes in value, with possible loss of customs revenue if the invoice statement had been accepted. Re- ports of the foreign investigating service show that the difficulty of DIGEST OF TARIFF HEARINGS, H. R, 7456. 19 obtaining the actual foreign value, as defined by law, makes it im- possible to appraise all merchandise at its true foreign value. Giving full credit to the integrity and competence of appraising officers, the witness is unable to believe that the Government receives the proper measure of protection to the revenue by the existing system. He can see no insurmountable obstacle to carrying out the provisions of H. R. 7456, provided proper preparation is made before the bill becomes a law. In view of the depreciated-currency situation and the widespread business depression throughout the world, the witness thinks the time ripe for this country to insure the protection of its customs revenue ; the foreign valuation system is not going to insure that result so well as when values can be ascertained and acted upon here. Witness : Mr. George F. Lamb, United States special attorney, Division of Customs, Department of Justice. Hearings : Pages 323-334. The witness's 30 years' experience with the customs in various capacities leads him to favor the American valuation plan. As one reason, its adoption would compel low-labor-cost countries to pay the same amount of duty on similar imports as countries having high labor costs. It would also do away with the irritation caused in foreign countries by the investigations of United States special agents. And it would tend to prevent undervaluations, in regard to which he cited recent instances. The witness regards as a very weak first line of defense against undervaluations the six special agents in foreign countries. Reliance is still largely placed upon the invoices admittedly a pretty uncer- tain reliance. There would be much greater ease in securing evidence as to the market value under the American valuation plan than -under the present system. Something had been said about the cost of installing the American valuation plan, but the increase in the amount of duties collected by cutting off undervaluation would far more than pay for the cost. Once established, its cost would decrease. There will, of course, be litigation, but that follows every tariff. Assuming that the American manufacturers' associations are really interested in the plan, they will cooperate in turning over all needed costs and selling prices down to the smallest things they sell. Speak- ing of the examiners in the customs service at New York City, the witness does not know of a more hard-working or more conscientious body of Government employees. But, in the last analysis, they have to rely on statements made to them by importers and people in the same line of business, and the present system breaks down where fraudulent undervaluation is involved. Witness : Mr. Charles D. Lawrence, United States special attorney, Division of Customs, Department of Justice. Hearings: Pages 334-339. Taking the statement in H. R. 7456 that it is a bill, or an act, to produce revenue, to regulate commerce with foreign countries, and to encourage the industries of the United States, the question natu- rally arises, What means are the most efficient, expedient, and feasible for accomplishing its purpose? The objections to the American 20 DIGEST OF TARIFF HEARINGS, H. R. 7456. valuation plan forming part of the bill are, in his opinion, largely the outgrowth of speculation and fear a natural hysteria always found accompanying any new legislation of any importance. An argument of commanding importance in favor of that plan is that the basis for duty, applicable to all countries alike, shall be the whole- sale value of goods in a country common to them all the United States. Instead of seeking out Values in the numerous markets of the world, why not follow the simpler plan to find values at first hand? Many difficulties arise under the present system, including the rejection by the courts of evidence presented by United States special agents on the ground that it is hearsay. The American valuation plan would increase revenue in certain cases by the pro- vision that, irrespective of cost of production, similar goods would always be valued alike for duty. It would, in effect, be placing mer- chandise upon a specific-duty basis ; opportunities for evasion would be greatly reduced; and fraudulent undervaluation would be dis- couraged* if not entirely eliminated. Touching the objection by importers that they will not know what their cost price is to be three months ahead of time, the witness does not think that a business man would place orders very far ahead without some approximate knowledge of what the goods would be worth on their arrival in this market. Witness: Mr. L. T. Scaramelli, representing the Italian Chamber of Commerce of New York. Hearings : Pages 5108-5111. In a brief filed with the committee the witness refers to the pro- visions of Title IV, section 402, as likely to have far-reaching and international effects upon trade in general, the cost of living, indus- trial domestic prosperity, and foreign revenues. Objection to the American valuation plan includes the excessive raising of tariff duties owing to the percentage basis being on much higher units of cost; the reduction of foreign buying to guesswork, speculation, and practically gambling; the immediate and exhaustive research work required to establish comparable values for each com- modity, followed, as this must be, not only by great loss of time but by litigation as well; the practical impossibility of keeping track of the thousands of articles subject to ad valorem duties laces alone accounting for 5,000 numbers. It is alleged also that payment of duty upon duty pyramiding would be unavoidable, with the ultimate result of actually prohibiting imports in certain lines. The inevitable reduction of American imports would be such as to seriously impair customs revenue and ultimately to reduce American exports, to raise prices, to increase unemployment, and business depression. The brief directs attention to what is believed to be the fallacy involved in many arguments, in regard to depreciated foreign cur- rencies: also to the fact that Italy is one of the United States' best customers. The abandonment of the American valuation plan is requested. LISTS OP COMMUNICATIONS ADDRESSED TO THE SENATE COMMITTEE ON FINANCE, GIVING EXPRESSION TO THE VIEWS OF CHAMBERS OF COMMERCE, PUBLIC UTILITY CORPORA- TIONS, MANUFACTURERS, IMPORTERS, AND OTHERS IN REGARD TO THE AMERICAN VALUATION FEATURE OF THE BILL, H. R. 7456, A TOTAL OF 1,205 COMMUNICATIONS. LIST A. Alphabetical list of firms and individuals approving the American valuation plan who have submitted their views, by letters or telegrams, to the Senate Committee on Finance. Abbott, George E Hartford, Conn. Acme Shear Co , Bridgeport, Conn. Actors' Equity Association New York City. Adams, Robert Providence, R. I. Adler, Jacob, & Co Gloversville, N. Y. Akron Merchants' Association Akron, Ohio. Alabama Graphite Creditors New York City. Alabama Manufacturers' Association Albion Kaolin Co Augusta, Ga. Alderman Fairchild Co Rochester, N. Y. Allandale Knitting Mills New York City. Allegany Window Glass Co Port Allegany, Pa. American Association of Flint & Lead Glass Manufac- turers Pittsburgh, Pa. American Bobbinet Co Newburgh, N. Y. American Chain Co Bridgeport, Conn. American Colortype Co Chicago, 111. American Craven Co Sandusky, Ohio. American Crayon Co New York City. American Cutlery Co Chicago, 111. American Doll Manufacturers (Inc.) New York City. American Electric Works Providence, R. I. American Enameled Magnet Wire Co Muskogee, Mich. American Flint Glass Workers' Union Morocco, Ind. American Flyer Manufacturing Co Chicago, 111. American Gear Manufacturers' Association Cleveland, Ohio. American Glue Co Boston, Mass. American Hardware Manufacturers' Association New York City. American Lace Manufacturing Co Elyria, Ohio. American Manganese Manufacturing Co Philadelphia, Pa. American Manufacturers of Shears and Scissors Newark, N. ,T. American Metal Ware Co Chicago, 111. American Mills Co Waterbury, Conn. American Novelty Co Ansonia, Conn. American Optical Co Southbridge, Mass. American Pin Co Waterbury, Conn. American Protective Tariff League New York City. American Ribbon & Carbon Co Rochester, N. Y. American Steel Wool Manufacturing Co New York City. American Swiss Tile & Tool Co New York City. American Textile Co. (Inc.) Pawtucket, R. I. American Tool Works Co Cincinnati, Ohio. American Valuation Association. New York City. American Veiling Co New York City. American Vitrified China Manufacturers' Association. .Wheeling, W. Va. American Window Glass Co Pittsburgh, Pa. American Woodworking Machinery Co Rochester, N. Y. Arizona Merchants' Association Phoenix, Ariz. Armstrong's City Pharmacy Warwick, N. Y. Armstrong Cork Co Pittsburgh, Pa. Arthe, Levy, Bernhard Co New York City. Asbestos Fiber Spinning Co North Wales, Pa. Asheville Mica Co Asheville, N. C. 7713422 3 21 22 DIGEST OF TARIFF HEARINGS, H. R. 7456. Associated Employers Utica, N. Y. Associated Glove Manufacturers Gloversville, N. Y. Associated Industries of Idaho Associated Industries of Kansas Associated Industries of Maine Associated Industries of Missouri Associated Industries of Montana Associated Industries of North Dakota Associated Industries of Vermont Associated Manufacturers of Electrical Supplies New YorV. City. Associated Tile Manufacturers Beaver Falls, Pa. Athenia Steel Co New York City. Athletic Knitting Mills Chicago, 111. Atkins & Pearce Manufacturing Co Cincinnati, Ohio. Atlantic Steel Co Atlanta, Ga. Atlantic Tubing Co .' Providence, R. I. Atlas Crucible Steel Co Buffalo, N. Y. Atlas Powder Co Wilmington, Del. Augstein, S., & Co New York City. Austin Cicero Manufacturers' Association Chicago, 111. Autoyre Co Oakville, Conn. Avenll Manufacturing Co New York City. B. Z. B. Knitting Co Rockford, 111." Bagshaw, W. H Lowell, Mass. Baker, A. G., Co. (Inc.) Johnstown, Pa. Baker & Bennett Co New York City. Baker & Co. (Inc.) Newark, N. J. Baker, Hugh P > New York, N. Y. Baker, William T. (Inc.) Jersey City, N. J. Baldwin Cutlery Co Tidioute, Pa. Baldwin Manufacturing Co Philadelphia, Pa. Barksdale, J. H Nashville, Tenn. Battelle & Renwick New York City. Bausch & Lomb Optical Co '. Rochester, N. Y. Bailsman, George A Springfield, Mass. Bay State Tap & Die Co Mansfield, Mass. Beade Chain Manufacturing Co Bridgeport, Conn . Becker Milling Machine Co Boston, Mass. Bedford China Co Bedford, Ohio. Beek Glove Co Richmond, Ind. Beggs & Graham Philadelphia, Pa. Beistle Co Shippensburg, Pa. Belden Manufacturing Co Chicago, 111. Bender-Zimmer Co Milwaukee, Wis. Benedict, Frank R Walden, N. Y. Benjamin Electric Manufacturing Co Chicago, 111. Bennett, Edwin, Pottery Co Baltimore, Md. Bergstrom Paper Co Neenah, Wis. Berkshire Cotton Manufacturing Co Adams, Mass. Berridge Shear Co Sturgis, Mich. Bertha Coal Co Pittsburgh, Pa. Betts Machine Co Rochester, N. Y. Bevin Bros. Manufacturing Co East Hampton, Conn. Beyer's Drug Store Punxsutawney, Pa. Bigelow Co New Haven, Conn. Bigney, S. O Attleboro, Mass. Binswauger, H. P New York City. Blair Manufacturing Co Springfield, Mass. Blum Shoe Co Danville, N. Y. Board of Trade Warville, N. Y. Bogen, Berman & Fox New York City. Boston Pottery Co. (Inc.) Boston, Mass. Bough & Sons Co Philadelphia, Pa. Bower, Henry, Chemical Manufacturing Co Philadelphia, Pa. Bradley Knitting Co Delavan, Wis. Bradley, Milton, & Co Springfield, Mass. Braid Manufacturers' Association. . . ... Brooklyn. N. Y. DIGEST OF TARIFF HEARINGS, H. R. 7456. 23 Bridgeport Coach Lace Co Bridgeport, Conn. Bridgeport Hardware Manufacturing Co Bridgeport, Conn. Bristal Knitting Mills New York City. Bromund, E. A New York City. Brooke, R. T Birmingham, Ala. Brooke, George, & Son Co Philadelphia, Pa. Brooks, U. B Boston, Mass. Brown & Sharpe Manufacturing Co Providence, R.I. Brown-Lipe Gear Co .Syracuse, N. Y. Brown, William, Co Philadelphia, Pa. Brownville Board Co Brownville, N. J. Brubaker, W. L., & Bros Millersburg, Pa. Bryant Electric Co Bridgeport, Conn. Bubb, U. B Williamsport, Pa. Buckeye Twist Drill Co Alliance, Ohio. Burke Electric Co Erie, Pa. Burke Golf Co Newell, Ohio. Burleson, J. E Spruce Pine, N. C. Burlington Basket Co Burlington, La. Burson Knitting Co Rockford, 111. Burt, John D New York City. Butterfield & Co. (Inc.) Derby Line, Vt. Byers, A. M., Co Pittsburgh, Pa. Byerts. W. E Des Moines, Iowa. Cabot, Samuel (Inc.) . . . .Boston, Mass. Cadet Knitting Co Chicago, 111. Caldwell, Edward F., & Co. (Inc.) New York City California Cotton Mills Co Oakland, Calif California Manufacturers' Association Oakland, Calif. Calkins, G. H Buffalo, N. Y. Callahan Zinc Lead Co Wallace, Idaho. Camp, Walter Gloucester, Mass. Campbell, George Niagara Falls, N. Y. Cantrell, P. H Little Rock, Ark. Carbon Products Co Lancaster, Pa. Card, S. W., Manufacturing Co Mansfield, Mass. Caron Spinning Co Rochelle, 111. Carpenter Steel Co Reading, Pa. Carrom Co Ludington, Mich. Case, W. R., & Sons Cutlery Co Bradford, Pa. Cattarangus Cutlery Co Little Valley, N.- Y, Celluloid Co New York City. Century Doll Co New York City. Century Electric Co St. Louis, Mo. Challenge Cutlery Corporation Bridgeport, Conn. Challenge Machinery Co Grand Haven, Mich, Chamber of Commerce Glove rsville, N. Y. Chamber of Commerce... Hornell, N. Y. Chamber of Commerce Latrobe, Pa. Chamber of Commerce Perry, N. Y. Chamber of Commerce Walden, N. Y. Chant. W. B., & Sons (Inc.l Port Jervis, N. Y. Chapin & Hollister Co Providence, R. I. Chatfield Manufacturing Co Cincinnati, Ohio. Chatillon. G. E New York City. Chelsea China Co New Cumberland, W. Va. Chelsea Clock Co Boston, Mass. Chelsea Fire Works (Inc.) Norwich. Conn. Chicago Gut String Manufacturing Association Chicago, 111. Chicago Nut Co Chicago, 111. City National Bank Gloversville, N. Y. Clasghes. J. & H., Co New Redmond, Ohio. Cleveland Metal Products Co Cleveland, Ohio. Cleveland Twist Drill Co Cleveland, Ohio. Cleveland Worsted Mills Co Cleveland, Ohio. Climax Molybdenum Co. of Colorado New York City. 24 DIGEST OF TARIFF HEARINGS, H. R. 7456. Cold well, Lawn Mower Co Newburgh. N. Y. Colonial Steel Co Chicago, 111. Cole Electric Light, Power & Rwy. Association Denver, Colo. Colorado Confectioner Association Denver, Colo. Colorado Manufacturers & Merchants' Association Denver, Colo. Colorado Metal Mining Association Denver, Colo. Columbia Knitting & Manufacturing Co Milwaukee, Wis. Columbia Tool Steel Co Chicago Heights, III. Columbian Enameling & Stamping Co Terre Haute, Ind. Conneaut Shovel Co Conneaut. Ohio. Connecticut Electric Manufacturing Co Bridgeport, Conn. Connecticut Foundrymen's Association New Britain, Conn. Continental Mills (Inc.) Philadelphia, Pa. Continental Paper and Bag Mills New York City. Continuous Casting Corporation Westfield, N . Y. Cook Pottery Co .....Trenton, N. J. Cook Spring Co Ann Arbor, Mich. Copeland, E. S Hornell, N. Y. Corliss Carbon Co Bradford, Pa. Cort-Harrison Sales Co. Trenton, N. J. Cotton, Geo. C., Electric Manufacturing Co East Hampton, Mass. Cox, A. B Knoxville, Tenn. Crane Bros Kingston, Pa. Crawford, David M Walden, N. Y. Cress, H. G., Co Troy, Ohio. Crooksville China Co Crooksville, Ohio. Grouse Hinds Co Syracuse, N. Y. Crucible Steel Co. of America New York City. Crystal Graphite Co Dillon, Mont. Culver Baer Mining Co Cloverdale, Calif. Cummings, A. B Attleboro, Mass. Cunningham, James, Saw Co 1 Rochester, N . Y. Curtiss, H. A Meriden, Conn. Cutter, George, Co South Bend , Ind . Cutter Mail Chute Co Rochester, N. Y. Dakin. John E Milton, Pa. Dalton, William Titusville, Pa. Damon & Ellis (Inc.) Boston, Mass. Daniel Hays Co Gloversville, N. Y. Davis Hosiery Co Reading, Pa. Davis, Charles B Boston, Mass. De Jong, Jacob New York City. Delaphena, R. V., & Co. (Inc.) New York City. De Laval Separator Co Chicago, 111. Dell, Samuel M., & Co Baltimore, Md. Dells Paper & Pulp Co Eau Claire, Wis. Delson Knitting Mills, Chicago, 111. Delta File Works Philadelphia, Pa. Deming Co Salem, Ohio. Dempster & Place Co Gloversville, N. Y. Dental Manufacturers' Club Toledo, Ohio. Denver Typothatas Denver, Colo. Derby & Shelton Board of Trade Derby, Conn. Derby Gas & Electric Co Derby, Conn. Derk, Jas., & Co Philadelphia, Pa. Detroit Twist Drill Co Detroit, Mich. Devoe & Reynolds Co. (Inc.) New York City. Diamond Crystal Salt Co St. Glair, Mich. Diamond State Fibre Co Bridgeport, Pa. Diehl Manufacturing Co Elizabeth, N. Y. Diehl, McGuire Manufacturing Co Richmond, Ind. Diller & McGuire Manufacturing Co Richmond, Ind. Doherty, Henry, Silk Co Clifton, N. J. Douglas, W. & B Middletown, Conn. Dow Chemical Co Midland, Mich. Drake, A. W., Manufacturing Co Hazleton, Pa. Drill & Reamer Society New York City. DIGEST OF TARIFF HEARINGS, H. R. 7456. 25 Dundee Textile Co Passaic, N. Y. Duplex Moulding Co Hornell, N. Y. Dusenbury, Louis, & Co. (Inc.) New York City. Dutton, V Cleveland, Ohio. Dwight Devine & Sons Ellenville, N. Y. Ewelle-Kaiser Co Buffalo, N . Y. Eagle Knitting Mills Milwaukee. Wis. Eagle-Picher Lead Co Chicago, 111. Eagle Rubber Co Ashland. Ohio. Eaton, Crane & Pike Pittsfield, Mass. Eaton-Drakeman Co Lee, Mass. Edgar Bros Metuchen, N. J. Edison Lamp Works Co St. Louis, Mp. Eimer & Cemend New York City. Elbro Knitting Mills Milwaukee, Wis. Electric Storage Battery Co Philadelphia, Pa. Electro Dynamic Co Elgar James (Inc.) Hornell, N. Y. Elite Glove Co Gloversville, N. Y. Elk County Manufacturing Association Ridgeway, Pa. Ellicott Machine Corporation Baltimore, Md. Elliott-Fisher Co Harrisburg, Pa. Ellwood, Ivins. Tube Works Philadelphia, Pa. Emmons Coal Mining Co Philadelphia, Pa. Empire Knife Co Winsted, Conn. Employers Association of Fort Wayne Fort Wayne, Ind. Employers' Association of New Haven New Haven, Conn. Employers' Association of Rhode Island Ensign Bickford Co Simsbury, Conn. Enterprise Manufacturing Co. of Pennsylvania Philadelphia, Pa. Erie City Iron Works Erie, Pa. Eustis. Augustus H Boston, Mass. Everlastik Chelsea, Mass. Everwear Hosiery Co Milwaukee, Wis. Exelrod Co. of Pennsylvania Stroudsburg, Pa. Exmoore Knitting Mills Chicago, 111. F. & N. Lawnmower Co Richmond, Ind. Fabric Glove Industry Waterford, N. Y. Fabric Glove Manufacturers' Association New York City. Fallmer, Clogg & Co Lancaster, Pa. Farrington Manufacturing Co Boston, Mass. Fawer. Louis New York City. Federal Glass Co Columbus, Ohio. Federal Industries of Washington Federal Knitting Mills Co Cleveland, Ohio. Federal Mill & Elevator Co. (Inc.) Lockport, N. Y. Federal Sign System (electric) Chicago, 111. Fellerman Bros 1 New York City. Ferst, M. A. (Inc.'i Atlanta, Ga. Fiberloid Corporation New York City. Fidelity & Deposit Co. of Maryland Warwick, N. Y. Fine Art Lace Co Philadelphia, Pa. Firs National Bank Warwick, N. Y. First Sterling Steel Co McKeesport, Pa. First Trust & Deposit Co Syracuse, N. Y. Fisher, Bruce & Co Philadelphia, Pa. Flint Glass Workers' Union Huntington, W. Va. Follanske Bros. Co Pittsburgh, Pa. Ford, J. B., Co Wyandotte, Mich. Forge & Iron Co .* Pittsburgh, Pa. Fownes Bros. & Co Gloversville, N. Y. Fox, A. H., Gun Co Philadelphia, Pa. Fox Paper Co Cincinnati, Ohio. Fox Paper Co Lockland, Ohio. Francis, Robert T New York City. Franco-American Chemical Works Carlstadt, N. J. Frankford Textile Mills Philadelphia, Pa. 26 DIGEST OF TARIFF HEARINGS, H. R. 7456. Franklin Knitting Mills ... New York City. Franklin Needle Co Franklin, N. H. Friedlander Knitting Co Milwaukee. Wis. Friedman Blau Farber Co ; . .Cleveland, Ohio. Fritz Gross & Co Philadelphia. Pa. Fulton County National Bank ' Gloversville, N. Y. Fulton Countv Silk Mills Gloversville, N. Y. Fur Felt Hat Manufacturers Gabriel, Sam, Sons & Co New York City. Gage, F. L Fargo, N. Dak. Gaies Bros Baltimore, Md. Garland Manufacturing Co Pittsburgh, Pa. Garrett, Geo. K Philadelphia, Pa. Gates, Mills & Co Johnstown, N. Y. General Chamber of Commerce Geneva, N. Y. General Electric Co ; Akron, Ohio. General Electric Co Atlanta, Ga. General Electric Co Baltimore, Md. General Electric Co. (Edison Lamp Works) Boston, Mass. General Electric Co Charlotte, N. C- General Electric Co Chattanooga, Tenn. General Electric Co Des Moines, Iowa. General Electric Co. Elmira, N. Y. General Electric Co Erie, Pa. General Electric Co Fort Wayne, Ind. General Electric Co Hartford, Conn. General Electric Co Jacksonville, Fla. General Electric Co Louisville, Ky. General Electric Co Memphis, Tenn. General Electric Co Minneapolis, Minn. General Electric Co Newark, N. J. General Electric Co New Haven, Conn. General Electric Co Pittsburgh, Pa. General Electric Co Providence, R. I. General Electric Co San Francisco, Calif. General Electric Co Spokane, Wash. General Electric Co Springfield, Mass. General Electric Co Terre Haute, Ind. General Electric Co West Lynn, Mass. General Insulate Co Brooklyn, N. Y. General Steel Co Chicago, 111. Geneva Trust Co Geneva, N. Y. George W. S. Pottery Co East Palestine, Ohio. Georgia Manufacturers' Association Georgia Minerals Co Atlanta, Ga. Gennania Mills Holyoke, Mass. Gilbert & Bennett Manufacturing Co Georgetown, Conn. Gilbert, G. H Richmond, Va. Giles, A. F Atlanta, Ga. Gill, Elsie Amsterdam, N. Y. Gillardon, Louis H Rockford, 111. Gillette Safety Razor Co Boston, Mass. Girard Model Works Girard, Pa. Glasgens, J. & H., Co New Richmond, Ohio. Glastenbury Knitting Co Glastonbury, Conn. Gleason Tilbout Co New York City. Globe Prayer Book Co. (Inc.) New York City. Gloria Mining Co Duluth, Minn. Glorie Underwear Mill Reading, Pa. Glove Workers of Fulton County Gloversville, N. Y. Gloversville Auto Glove Co " , Gloversville, N. Y. Gong Bell Manufacturing Co Easthampton, Conn. Goodall Worsted Co Sanford, Me. Goodman Bros. & Hinelan Philadelphia, Pa. Goodyear Lumber Co Buffalo, N. Y. Gorgas-Pierce Manufacturing Co Philadelphia, Pa. Great Lakes Knitting Co Chicago, 111. DIGEST OF TARIFF HEARINGS, H. R. 7456. 27 Great Northern Chair Co I Chicago, 111. Great Western Electric Chemical Co San Francisco, Calif. Green, Haas, Schwarz Co Cleveland, Ohio. Greenfield Tape & Die Corporation Greenfield, Mass. Greenwood Pottery Co Trenton, N. J. Grey Iron Casting Co Mount Joy, Pa. Griesmes Graphite Co Ashland, Ala. Griffith Tool Works Philadelphia, Pa. Griswold Manufacturing Co Erie, Pa. Groffer Knitting Mills New York City. Grundv & Co. (Inc.) Philadelphia, Pa. Guay, E. A East Boston, Mass. Guernseyware Co Cambridge, Ohio. Gulocke, W. H., Chair Co Wayland, N. Y. Gurney Ball Bearing Co Jamestown, N. Y. H. & P. Glove Co Johnstown, N. Y. Hall China Co : East Liverpool, Ohio. Hall, H. S., &Co Jersey City, N. J. Halwick, J. H Waldem, N. Y. Hammermill Paper Co Erie, Pa. Hankey, A., & Co. (Inc.) Rochdale, Mass. Handknit Hosiery Co Sheboygan, Wis. Hanlan & Goodman Co Belleville, N. J. Hard Color Products Co Sandusky, Ohio. Harper, Edward G Chicago, "ill. Harrison, L. & S Trenton, N. J. Harthaway, F. B Oklahoma City, Okla. Hatters ' Fur Industry of the United States New York City. Hazard Manufacturing Co Wilkes-Barre, Pa. Hazel-Atlas Glass Co Wheeling, W. Va. Heller Bros. Co Newark, N. J. flenkell Clauss Co Fremont, Ohio. Henry, G. C Jacksonville, Fla. Henry, L. P., Sons New York City. Hensel Collady Co. ; Philadelphia, Pa. Hercules Mining Co -. Wallace, Idaho. Herman Bamberger & Co New York City. Herscheide Clock Co Cincinnati, Ohio. Herschel, P. E Peoria, 111. Heyman, Louis, & Bros New York City. Highland Iron & Steel Co Bridgeport, Conn. Hillard & Merrill (Inc.) Lynn, Mass. Hirsch, Daniel New York City. Hobson, C. W Dallas, Tex. Hodges, William, & Co Philadelphia, Pa. Holcomb Steel Co Syracuse, N. Y. Holeproof Hosiery Co Milwaukee, Wis. Hollingsworth Knife Co Kane, Pa. Hollinsworth, P. V Titusville, Pa. Holyoke Worsted Mills ( Inc.) Holyoke, Mass. Hoover Steel Ball' Co Ann Arbor, Mich. Home, James, Co Pittsburgh, Pa. Hornell Lumber Co. (Inc.) Hornell, N. Y. Hornell Rotary Club. Hornell, N. Y. Hornsby, A. G Syracuse, N. Y. Horrokes Desk Co Herkimer, N. Y. Hosiery Manufacturers' Legislative Committee New York City. Hubbard, E. Kent Hartford, Conn. Hub ley Manufacturing Co Lancaster, Pa. Hulse Bros. & Daniels New York City. Huntington Tumbler Co Huntington, W. Va. Ide, George P., & Co. (Inc.) Troy, N. Y. Illinois Manufacturers' Association Imperial Knitting Co Milwaukee. Wis. Imperial Porcelain Works. Trenton, N. J. Indiana Manufacturers' Association -. Ingalla & Co Castleton, N. Y. 28 DIGEST OF TARIFF HEARINGS, H. R. 7456. Ingersoll Milling Machine Co Rockford , 111. Ingraham, E., & Co Bristol, Conn. International Monumental Granite Producers' Associa- tion International Packing Corporation of California Los Angeles, Calif. International Pulp Co New York Citv. International Vulcanizing Co Patterson, N. Y. Iowa Manufacturers' Association Iron Mountain Mining Co Dulutli, Minn . Italian Coverlet Co. (Inc.) New York City. Jackson Shear Co Fremont, Ohio. Jacobus, C. R Duluth, Minn. Jenkins, E. Wheeler Philadelphia, Pa. Jersild Knitting Co Neenah, Wis. Johns-Pratt Co Hartford, Conn. Johnson Belting Co Philadelphia, Pa. Johnson, L. G Akron, Ohio. Johnson Porter Clay Co McKenzie, Tenn. Jones & Laughlin Steel Co Pittsburgh, Pa. Jones & Mardin Gloversville, N. Y. Judson Manufacturing Go San Francisco, Calif. Keller Knitting Co Cleveland, Ohio. Kent Manufacturing Co Clifton Heights, Pa. Kenton Hardware Co Ken ton. Ohio. Kentucky Manufacturers' Association Keuffel & Esser Co Hoboken. N. J. Kibler, H. W Minerva. Ohio. Killark Electric Manufacturing Co St. Louis, Mo. Kimball, J. P Warwick, N. Y. Kneeland-Beglow, Co Bay City, Mich. Knit Goods Manufacturers of America Utica, N. Y. Knitted Outerwear Manufacturers' Association Milwaukee, Wis. Knitting Manufacturers' Association of Cleveland Cleveland. Ohio. Knowles. Taylor & Knowles East Liverpool. Ohio. Koehl, William, Co Cincinnati. Ohio. Korn, Geo. W., Razor Manufacturing Co New York Citv. Koskie, Joe Hornell. N. Y. Krautz Manufacturing Co. (Inc.) Brooklyn, N. Y. Kreis & Hubbard Chicago, 111. Kuhn, E. C Cincinnati, Ohio. L. & C. Coat, Suit & Dress Co Hornell, N. Y. La Belle Ironworks Steubensville, Ohio. Lace Selling Co New York City. Lansdale Mushroom Co Lansdale. Pa. Larzelere, Walter D Philadelphia. Pa. Leaded Glass Manufacturers' Association of Western Pittsburgh, Pa. Pennsylvania. Lebanon Paper Box Co Lebanon, Pa. Lee, Robert E Tacoma. Wash. Lenning, Charles, & Co. (Inc.) Philadelphia, Pa. Leonhard, Theodor, Wax Co Paterson, N. J. Lever, Oswald, Co. (Inc.) . . .Philadelphia, Pa. Lewis, L. H ; Newark, N. J. Lewis, W. M., Dweet, Edward R Muskegon, Mich. Libbey Glass Manufacturing Co Toledo. Ohio. Limoge China Co Sebring, Ohio. Lincoln Twist Drill Co Taunton, Mass. Lindennan, A. J., & Haverson Co Milwaukee, W T is. Lindsay Light Co Chicago, 111. tipper Manufacturing Co. (Inc. ) Philadelphia, Pa. Lisk Manufacturing Co. (Ltd.) Canandaigua, N. Y. Local Union 118, American Flint Glass Workers Huntington, W. Va. Locke, E. G Camden, N. J. Logan Iron & Steel Co . . .Burnham, Pa. Lord, Charles E Hornell, N. Y. Lowenthal, Max., & Sons , Rochester, N. Y. Lucas & Kennedy r .Johnstown, N . Y. DIGEST OF TARIFF HEARINGS, H. R. 7456. 29 Luptons's, David, Sons Co Philadelphia, Pa. Lycoming Furniture Co Hughesville, Pa. Lynn Chamber of Commerce Lynn, Mass. Macbeth-Evans Glass Co Pittsburgh, Pa. McConway & Torley Co Pittsburgh, Pa. McCoy, George W Galveston, Ind. McFarland, George O , x Little Rock, Ark. McFie& Edwards Santa Fe, N. Mex. McKenney, H. B Hornell, N. Y. McKinney, M. O Chattanooga, Tenn. McLellan, James D Boston, Mass. McNicol, D. E Clarksburg, W. Va. McNicol, D. E., Pottery Co East Liverpool, Ohio. McNicol, T. A., Pottery Co East Liverpool, Ohio. McVey, William Walden, N. Y. Maddock Pottery Co Trenton, N. J. Maine Spinning'Co Boston, Mass. Maloy, J. H New York City. Manhattan Umbrella & Parasol Co New York City. Mann, James H., Co Laidlow, Pa. Manufacturers & Employers' Association of South Dakota Manufacturers' Association of Berks County Reading, Pa. Manufacturers' Association of Connecticut (Inc.) Hartford, Conn. Manufacturers' Association of Lancaster Lancaster, Pa. Manufacturers' Association of Monroe County Manufacturers' Association of New Jersey Manufacturers Association of Washington Seattle, Wash. Manufacturers' Association of Wilmington, Delaware. Manufacturing Chemists' Association Cleveland, Ohio. Manufacturers' Club Philadelphia, Pa. Marinette Knitting Mills Marinette, Wis. Markham Air Rifle Co Plymouth, Mich. Maryland Casualty Co Baltimore, Md. Master Rule Manufacturing Co. (Inc.) New York City. Mayer China Co Beaver Falls, Va. Mayer, Walter W Ephrata, Pa. Mayor of Johnstown, N. Y Menasha Woolen Ware Co Menasha, Wis. Merchants' Publishing Co Kalamazoo, Mich. Merion Worsted Mills West Conshohocken. Pa. Merrill Hosiery Co Hornell, N. Y. Merrill Knitting Co Merrill, Wis. Merrill Silk Co Hornell, N. Y. Merrimac Chemical Co Boston, Mass. Merritt Development Co Minneapolis, Minn, Metal Specialties Co. 1 Attleboro, Mass. Meyercord Co Chicago. 111. Michell, Henry F., Co Philadelphia, Pa. Michigan Manufacturers' Association Middletown Chamber of Commerce Middletown, N . Y. Miles, G Walden, N. Y. Millark Electric Manufacturing Co St. Louis, Mo. Miller Lock Co Philadelphia, Pa. Millinery Braid & Trimming Manufacturers' Associa- tion Philadelphia, Pa. Milling Cutter Society New York City. Milton Bradley Co Springfield, Mass . Mississippi Glass Co New York City. Maloney Electric Co St. Louis, Mo. Molybdenum Corporation of America Pittsburgh, Pa. Monroe. H. L..f Chicago, 111. Moore, E. T Fargo, N. Dak. Moore, G. C Westerly, R. I. Morse, James F., & Co Roxbury, Mass. Moss Lace Manufacturing Co Philadelphia, Pa. Mountain States Lumber Dealers' Association Denver, Colo. 30 DIGEST OF TARIFF HEARINGS, H. R. 7456. Nagle Steel Co . Pottstown, Pa. Narrow Fabric Co Reading, Pa. National Association of Employing Lithographers. . . .Rochester, N. Y. National Association of Hosiery & Underwear Manu- facturers Philadelphia, Pa. National Automatic Tool Co Richmond, Va. National Bank of Kentucky New York City. National Bottle Manufacturers' Association Atlantic City. National Boys' Blouse & Suit Manufacturers' Associa- tion New York City. National Camp, Sons of America Lebanon, Pa. National Carbon Co. (Inc.) Cleveland, Ohio: San Francis- co, Calif. National China Co Salineville, Ohio. National Enameling & Stamping Co Milwaukee, Wis. National Industrial Council New York City. National Knitted Outerwear Association New York City. National Knitting Co Milwaukee, Wis. National Paint, Oil & Varnish Association (Inc.) New York City. National Razor Manufacturing Co Fremont, Ohio. National Screw & Tack Co Cleveland, Ohio. National Tool Co Cleveland, Ohio. National Twist Drill & Tool Co Detroit, Mich. Navy Knitting Mills (Inc.) .New York City. Nebraska Manufacturers' Association Nelson Bottling Works Hornell, N. Y. Nelson Glove Co Gloversville, N. Y. Nestle's Food Co New York City. New Bedford Cotton Manufacturers' Association New Bedford, Mass. New Departure Manufacturing Co Bristol, Conn. New England Manufacturing Jewelers and Silver- smiths' Association Providence, R. I. New Fabric Cloth Mills (Inc. ) Oswego, N . Y. New- Hampshire Manufacturers' Association New Haven Clock Co New Haven, Conn. New York Store Greensburg, Pa. Newark Wire Cloth Co Newark, X. J. Newcomb, F. J., Manufacturing Co New York City. Niagara Steel Finishing Co. (Inc.) Niagara Falls, N. Y. North & Judd Manufacturing Co New Britain, Conn. North American Lace Co Philadelphia, Pa. North East Electric Co Rochester, N. Y. Notaseme Hosiery Co Philadelphia, Pa. Novelty Cutlery Co Canton, Ohio. Noyes, Thomas, & Co Charleston, W. Va. O. M. Glove Corporation. . . Waterford, N . Y. O'Connor, L. M .- Hornell, N. Y. Oconto Mills Oconto, Wis. Ohio Manufacturers' Association Oklahoma Employers' Association Oliver Manufacturing Co Oakland, Calif. Oneida Knitting Co De Pere, Wis. Onondaga Pottery Co Syracuse, N. Y. Ontario Knife Co Frankville, N. Y. Ornstein. S., & Sons New York City. Ostrauder, W. R., & Co New York City. Oswald Lever Co Philadelphia, Pa. Owen China Co Minerva, Ohio. Pacific Coast Glass Works San Francisco, Calif. Packard Electric Co Warren, Ohio. Page Steel & Wire Co Bridgeport, Conn. Paine, Sidney B Boston, Mass. Palern, Mrs. Bovina Walden, N. Y. Paragon Electric Co Chicago, 111. Paramount Knitting Co Chicago, 111. Parker Bros Salem, Mass. Parker Clock Co... Meriden, Conn. DIGEST OF TARIFF HEARINGS. H. R. 7456. 31 Parker Gun Meriden, Conn. Parker, R. H Minneapolis, Minn. Parker Wire Goods Co Worcester, Mass. Pass & Seymour New York City. Paterson Parchment Paper Co Passaic, N. Y. Peck Motor Sales Co. (Inc.) Hornell, N. Y. Peck, Stow & Wilcox Co Cleveland, Ohio. Peerless Knitting Co Milwaukee, Wis. Peerless Tube Co Bloomfield, N. Y. Peltz & Biderman New York City. Pelzer Manufacturing Co Pelzer, S. C. Penn Glass Sand Co Lewiston, Pa. Penn Lawn Mower Works Philadelphia. Pa. Penn Worsted Co Philadelphia, Pa. Pennsylvania Manufacturers' Association Peoples' Bank Johnstown. N. Y. Pequanoe Rubber Co Butler, N. Y. Perkins. B. F.. & Son (Inc.) Holyoke. Mass. Pevny. Emil r Oswego. N. Y. Philadelphia Board of Trade Philadelphia, Pa. Philadelphia Tapestry Mills Philadelphia, Pa. Philippi Blanket Mills (Inc.) Philippi, W. Va. Phoenix Chamber of Commerce Phoenix, Ariz. Phoenix Glass Co Pittsburgh, Pa. Pictorial Paper Package Co Aurora, 111. Filer. S. H Seattle, Wash. Pioneer Broom Co Amsterdam, N. Y. Piqua Handle & Manufacturing Co Piqua, Ohio. Pittsburgh Carbon Brush Co Pittsburgh, Pa. Pittsburgh Chamber of Commerce Pittsburgh. Pa. Pittsburgh Forge & Iron Co Pittsburgh. Pa. Plumb. Fayette R. (Inc.) Philadelphia, Pa. Pond. A. L Milwaukee. Wis. Pond. Ashley Santa Fe. X. Mex. Pool. M. A Memphis, Tenn. Pope, Grosser China Co Coshocton, Ohio. Potters Cooperative Co , .East Liverpool, Ohio Pratt & Whitney Co Hartford, Conn. Prest Glove Leather Tanners' Association Gloversville, N. Y. Prest-Yost Electric Manufacturing Co Toledo, Ohio. Priscilla Worsted Mills Thornton, R. I. Progressive Handkerchief Manufacturing Co Passaic, N. J. Pyroxlin Plastics Manufacturers' Association New York City. Quackenbrush. H. M Herkimer, N. Y. Quality Silk Mills (Inc.) New York City. Radclfffe Bros Derby, Conn. Randall, H. D Denver, Colo. Ranson & Randolph Co Toledo. Ohio. Raub. H. F.. Silk Co Bangor, Pa. Read & Lovett Manufacturing Co New York City. Reading Steel Casting Co Bridgeport. Conn. Reed-Prentice Co Worcester, Mass. Rees'. Hans, Sons Asheville, N. C. Reliable Knitting Works Milwaukee, Wis. Reliance Electric & Engineering Co Cleveland. Ohio. Republican State Committee Trenton, X. J. Rhode Island Textile Association Providence, R.I. Rice, Richard II West Lynn. Mass. Rich, Knitting Mills Co Richmond Malleable Castings Co Richmond, Ind. Rimmon Eyelet Co Seymour. Conn. Ripple, Wa'rren South Bend, Ind. Ritchie. W. C.. & Co Chicago, 111. Ritter Dental Manufacturing Co. (Inc.) ' Rochester, N. Y. Robbins & Meyers Co Springfield. Ohio. Roberts. R. R'. Houston, Tex. Robeson Cutlery Co Rochester, N. Y 32 DIGEST OF TARIFF HEARINGS, H. R. 7456. Rochester Stamping Co Rochester, N. Y. Rockford Electric Co Rockford, 111. Rockford Mitten & Hosiery Co Rockford, 111. Rockwood Mannfacturing Co Indianapolis, Ind. Roebling, J. A., Sons Co Trenton, N. J. Rogers, E Springfield, Mass. Rogers, John B Warwick, N. Y. Rohn & Haas Co Philadelphia, Pa. Rome Brass & Copper Co Rome, N. Y. Rome Wire Co '. Rome, N. Y. Roosevelt Worsted Mills Philadelphia. Pa. Rose, C. W., Glove Co Glovereville, N. Y. Rose, Hemingway Cantrell, Loughborough Little Rock, Ark. Rotary Club of New Britain, Conn Royaf Knitting Mills Co Chicago, 111. Royal, Thos. M., & Co Bryn Mawr, Pa. Rubin Bros., Millinery (Inc.) Brooklyn, N. Y. Russell, John, Cutlery Co Greenfield, Mass. Rutenber Electric Co , . Marion, Ind. Saco Lowell Shops Boston, Mass. St. Louis Label Works St. Louis, Mo. Salem China Co Salem, Ohio. Salts Textile Manufacturing Co New York City. Sand Knitting Mills Chicago, 111. Sanford Mills Boston, Mass. Sanitax Brush Co Chicago, 111. Sanitary Potters' Association Trenton, N. J. Saxon China Co. and employees Sebring, Ohio. Schand & Roosa Co Hornell, N. Y. Schatt & Morgan Cutlery Co Titusville, Pa. Schlesinger, Leo, & Co New York City. Schmitt & Ault Paper Co York, Pa. Schoenhut, A., Co Philadelphia, Pa. Schrader Cutlery Co Welden, N. Y. Schwelmis, John M. , Sons Germantown, Pa. Sebring, E. H., China Co Sebring, Ohio. Sebring Pottery Co Sebring, Ohio. Sessions Clock Co Forestville, Conn. Sessions, F. W. , Millinery Co Utica, N. Y. Shannon, Elizabeth Amsterdam, N. Y. Sharp, O. S Minerva, Ohio. Sheboygan Chair Co Sheboygan, Wis. Shelton Tool & Machine Co Derby, Conn. Sherrill, J. L., & Co Mayfield, Ky. Sherwin-Williams Co Cleveland, Ohio. Sherwood Bros. Manufacturing Co. (Inc.) Canastota, N. Y. Shoemaker, A. Brock Tullytown, Pa. Shreve . E . San Francisco, Calif. Sicard, D. C Walden, N. Y. 1, Rotheschild & Co Baltimore, Md. Silver Plate Cutlery Co Derby, Conn. Silvernail Mosher Co Gloversville, N. Y. Simmonds Manufacturing Co Fitchburg, Mass. Skerrett, H. H., & Co Philadelphia, Pa. Skerry, A. T., & Co New York City. Smith & Dove Manufacturing Co Andover, Mass. Smith, Lee S., & Sons Manufacturing Co Pittsburgh, Pa. Smith, Pearl I Dillon, Mont. Smith, W. &T.,Co Genoa, N. Y. Southern Extract Co Knoxville, Tenn. Southern Ferro Alloys Co Chattanooga, Tenn. Southern Tariff Association Washington, D. C. Southwest General Electric Co El Paso, Tex. Speer Carbon Co I St. Marys, Pa. Spellmire, W. B Pittsburgh, Pa. Spencer Kellogg & Sons (Inc.) Buffalo, N. Y. Spinke, H. C., Clay Co Newport, Ky. DIGEST OF TARIFF HEARINGS, H. R. 7456. 33 Sprague, G. T. S Warwick, N. Y. Standard Knitting Co Cleveland, Ohio. Standard Plate Glass Co Butler, Pa. Standard Tool Co Cleveland, Ohio. Standard Ultramarine Co Huntington, W. Va. Standard Ultramarine Co. employees Huntington, W. Va. Standard Underground Cable Co Pittsburgh, Pa. Star & Crescent Co Philadelphia, Pa. Star Knitting Co La Crosse, Wis. Star Pin Co Derby, Conn. Star Worsted Co Fitchburg, Mass. State Valley Fabric Co Bangor, Pa. Starbuck, D. K Youngstown, Pa. Stead & Miller Co Philadelphia, Pa. Sterling Engine Co Buffalo, N. Y. Stevens & Co .- New York City. Stewart, Mrs. L Walden, N. Y. Still, Edwin F -. Goshen, N. Y. Stiseles, Ralph Walden, N. Y. Stoll, D. H., Co. (Inc.) Buffalo, N. Y. Stoppard, William, & Sons Providence, R. I. Stover, C. J Philadelphia, Pa. Strange, John, Paper Co Menasha, Wis. Stratford Cookson Co Philadelphia, Pa. Stromberg-Carlson Telephone Manufacturing Co Rochester, N. Y. Superior Steel Corporation Pittsburgh, Pa. Swayne, J. B Kennett Square, Pa. Swiss Novelty Embroidery Co West New York Symington, T. H., Co Rochester, N. Y. Synthetic Chemical Manufacturers' Association New York City. Syracuse Twist Drill Co Syracuse, N. Y. Tafnir Bearing Co New Britain, Conn. Tamarack & Custer Consolidated Mining Co Wallace, Idaho. Tap & Die Institute New York City. Taylor, E . M Walden, N . Y. Taylor Instrument Co Rochester, N. Y. Tennessee Manufacturers' Association Texas Employers' Association Thompson, C. C., Pottery Co East Liverpool, Ohio. Thompson, J. H., & Sons Kennett Square, Pa. Todd Protectograph Co Rochester, N. Y. Tolwell Bros. & Co ,. Philadelphia, Pa. Torrance Window Glass Co Los Angeles, Calif. Toy, H. K., & Henley Skate Co Richmond, Ind. Toy Manufacturers of the United States (Inc.) Atlantic City. Toy Manufacturers of the United States (Inc.) New York City. Trant & Hire Manufacturing Co New Britain, Conn. Travis Carter Co Seymour, Ind. Triangle Conduit Co Trust Co. of Fulton County, N. Y Gloversville, N. Y. Turner, John C., Co Dayton, Ohio. Ulster Knife Co Ellenville, N. Y. Umbrella Manufacturers' Association New York City. Ungerer & Co New York City. Union Electric Light & Power Co St. Louis, Mo. Union Knitting Mills Schuylkill Haven, Pa. Union League Club Chicago, 111. Union Mills Paper Manufacturing Co New Hope, Pa. Union Pin Co Winsted, Conn. Union Trust Co Cleveland, Ohio. Union Twist Drill Co Athol, Mass. . United Associated Industries United Chemical Works Corona, Calif. United Light & Railway Co Grand Rapids, Mich. United Manufacturing Co New York City. United Potters' Association Salineville, Ohio. United States Ball Bearing Manufacturing Co Chicago, 111. 34 DIGEST OF TARIFF HEARINGS, H. R. 7456. United States Glass Co Pittsburgh, Pa. United States Lace Curtain Mills New York City. United States National Bank Portland, Oreg. United States Potters' Association East Liverpool, Ohio. United States Kubber Co Bristol R. I. United Textile Workers of America Philadelphia, Pa. United Upholstery Manufacturers' Association Philadelphia. Pa. Universal Steel Co Bridgeville. Pa. Urdach, W. M., Electric Manufacturing Co St. Louis, Mo. Utica Cutlery Co v Utica, N. Y. Utica Drop Forge & Tool Co Utica, N. Y. Utica Novelty & Mill Specialty Co Utica, N. Y. Utica Steam & Mohawk Valley Cotton Mills Utica. N. Y. Valley Forge Cutlery Co Newark, N. J. Valley Woolen Mill." Cherry Valley, Mass. Vanadium-Alloys Steel Co 1 Latrobe, Pa. Van Doren & Button Co Cleveland, Ohio. Van Doren Electric Tool Co Cleveland. Ohio. Vanity Fair Silk Mills Reading, Pa. Van Vleet Glove Co Gloversville. N. Y. Victor Knitting Mills Milwaukee, Wis. Victory Glass Co Jeannette, Pa. Vineland Flint Glass Works Vineland, N. J. Virginia Association for the Common Good Vogt. Walter J..' Brooklyn, N. Y. Wagner. Edward Wheeling, W. Va. Waitzfelder Braid Co Brooklyn, N. Y. Wakeman. W. F New York City. Walden Chamber of Commerce Walden, N. Y. Walden Knife Co Walden, N . Y. Wallace Barnes Co Bristol, Conn. Wallace, H. F Boston, Mass. Waltham Watch Co Waltham. Mass. Ward. H. C Rochester, N. Y. Ward-Stilson Co Anderson, Ind. Ware, A. W.. & Co. . . New York City. Warwick China Co Wheeling. W. Va. Warwick Cooperative Association Wheeling, W. Va. Warwick Knife Co Warwick, N. Y. Warwick Savings Bank Warwick, N. Y. Warwick, Town of Warwick, N. Y. Washburn Wire Works Providence, R. I. Washington Camp No. 4, Patriotic Order Sons of New Walden, N. Y.- York State. Waterbury Clock Co Watertmry, Conn. Waterbury Steel Ball Co 'Waterbury, Conn. Webbing Manufacturers' Exchange New York City. Weber Knitting Mills Appleton, Wis. Weed en Manufacturing Co New Bedford Mass Weeper. W. J., Co Fonda, N. Y. Welch. C. J Conneaut, Ohio. Welsbach Co Gloucester, N. Y. West End Thread Co Boston, Mass. West Leechburg Steel Co Pittsburgh, Pa. West Virginia Manufacturers' Association Westfield Manufacturing Co Westfield, Pa. Westinghouse Electric & Manufacturing Co New York City. Westinghouse Union Battery Co Swissvale, Pa. Westmoreland Chemical & Color Co Philadelphia, Pa. Weston Dodson & Co. (Inc.) Bethlehem, Pa. Wheel & Wood Bending Co Bridgeport, Conn. Wheeling Steel Corporation Wheeling, W. Va. Whitin Machine Works WTiitinsville, Mass.. Whiting, John L Boston, Mass. Whitman & Barnes Manufacturing Co Akron, Ohio. Wieruni, H. F Valley, Wash. DIGEST OF TARIFF HEARINGS, H. R. 7456. 35 Wilder Pike Thermometer Co Troy, N. Y. Wileker Co. , Martin New York City. Wilkinson, H. S New York City. Willamette Iron & Steel Works Portland, Oreg. Willard, B New Orleans, La. Willard Storage Battery Co % . Cleveland, Ohio. Williams, C. K., & Co.' . . .Easton, Pa. Williams White Co Moline, 111. Wilson James E Pittsfield, Mass. Winchester Repeating Arms Co New Haven, Conn. Winter Bros. Co Wrentham, Mass. Wirt, Charles '. Germantown, Pa. Wirt & Knox Manufacturing Co Philadelphia, Pa. Wolcott, V. A Butte, Mont. Wolf Doll Co New York City. Wolf Son Bros. Umbrella Co New York City. Wollensack Optical Co Rochester, N. Y. Wolsten Holme, Charles, Bros. Co Philadelphia, Pa. Wolstenholme, Alfred, Sons Co Philadelphia, Pa. Wolvering Paper Co Otsego, Mich. Wood & Hyde Co Gloversville, N. Y. Wood Shovel & Tool Co Piqua, Ohio. Wood bury, M. F ..Hornell, N. Y. Woodruff & Woodruff Greeley, Colo. Woonsocket Brush Co Woonsocket, R. I. Worcester Lawn Mower Co Worcester, Mass. Worth Steel Co Clayton, Del. Worumbo Co New York City. Wright, B. O., & Co New York City. Wyllie, H. R., China Co Huntington, W. Va. Yale Novelty Co Leominster, Mass. Yates, Eugene Milwaukee, Wis. Yates, P. B., Machine Co Beloit, Wis. Yawman & Erbe Manufacturing Co Rochester, N. Y. Zimmer, W. U., & Sons Gloversville, N. Y. Zinsser & Co Hastings on the Hudson. LIST B. Alphabetical list of firms and individuals opposing the American valuation plan, uho have submitted their views, by letters or telegrams, to the Senate Committee on Finance '. Allen & Bayne Kansas City, Kans. American Exporters & Importers' Association New York City. American Spice Trade Association New York Citv. American Street Lighting Co Baltimore, Mxf. Associated Importers of Food Products New York City. Associated Retailers of Sioux City Sioux City, Iowa. Associated Terminals Co San Francisco, Calif. Athletic Knitting Mills Chicago, 111. Ayres, L. S., & Co Indianapolis, Ind. Baker Bowers Warehouse San Francisco, Calif. Baker, H., & Co. (Inc.) New York City. Bayersdorfes, H., & Co Philadelphia, Pa. Beach, B. A. and L. F Joliet, 111. Beck, Will II., Co Sioux City, Iowa. Beehler, Williams Baltimore, Md . Bemis Bros. Bag Co Boston, Mass. Bell & Caldwell New York City. Bergner, R. A., & Co Peoria, 111. Besore Dry Goods Co. (Inc.) Waynesboro, Pa. Block& KuhlCo Peoria, 111. Blum, Emil, Co San Antonio, Tex. Bon Marche Seattle, Wash. Boston See Goods Co Fort Smith, Okla. Boston Store Cairo, 111. Branch, G. B., & Co Coldwater, Mich. 36 DIGEST OF TARIFF HEARINGS, H. R. 7456. Brandies, G. L., & Sons Omaha, Nebr. Brown, Charles, & Sons San Francisco, Calif. Brown & Sharpe Manufacturing Co Providence, R. I. Caille Perfection Motor Co Detroit, Mich. Cain Sloan Co Nashville, Tenn. California Packing Corporation * San Francisco, Calif. Campbell, Charles H Detroit, Mich. Campbell, P. D Pittsburgh, Pa. Canton, W. E., Co Detroit, Mich. Central Dry Plate Co St. Louis, Mo. Chambon. F. S McDonald, Pa. Chester, Jacob N New York City. Chicago Association of Commerce Chicago, 111. Christensen, W. T Seattle, Wash. Cities Illuminating Co. (Inc.) New York City. Claflin, Geo. L., Co Providence, R. I. Claflins (Inc.) New York City. Cleveland Chamber of Commerce Cleveland, Ohio. Colgate & Co ". New York City. Consumers' Committee Opposed to American Valua- tion New York City. Continental Pipe Manufacturing Co Seattle, Wash. Cooley, R. C Pittsfield, Mass. Crowley Bros Detroit, Mich. Crowley, C. H New York City. Crowley, Milner & Co Detroit, Mich. Daigger, A. , & Co Chicago, 111. Dannemora Steels Co New York City. Davidson Bros Sioux City, Iowa. Davis, D. L., & Co Ashtabula, Ohio. Davis, J. B. F., & Son San Francisco, Calif. Denver Dry Goods Co Denver, Colo. Derenthal, H. A New Rochelle, X. Y. Dickerson & Co Detroit, Mich. Dill Coppage (Inc.) San Francisco, Calif. Dinkelspiel, L., & Co San Francisco, Calif. Dixie Furniture Co San Antonio, Tex. Dollar, Robert, Co San Francisco, Calif. Doyle, J. J Latrobe, Pa. Eagle Furniture Co San Antonio, Tex. Ebeling & Reuss Philadelphia, Pa. Edgerly, J. W., & Co Ottumwa, Iowa. Edwin Harrox (Inc. ) New York City. Ely, Charles S Millville, Pa. Emporium, The San Francisco, Calif. Exporters & Importers' Club Detroit, Mich. Fair Tariff League New York City. Federal Tool & Alloy Steel Corporation New York City. Felt & Farraut Manufacturing Co Chicago, 111. Ferry, D. W., & Co Detroit, Mich. Field Co., L. H Jackson, Mich. Fisher, Bruce & Co Philadelphia, Pa. Franco-American Board of Commerce & Industry New York City. Frank Bros ' San Antonio, Tex. Fraser Dry Goods Co Brockton, Mass. Fraser Patterson Co Seattle, Wash. Frederick & Nelson Seattle, Wash. Fredonia Seed Co Fredonia, N. Y. Friedlander, Will W Chicago, 111. Fuleihan Bros New York City. Gable, William F., Co Altoona, Pa. Garfield Trading Co Garfield, Wash. Gasser & Chase Pocatello, Fla. Gates, T. B. M New York City. Gaut, T. L Pensacola, Fla. General Steamship Corporation San Francisco, Calif. Gillespie Bros. (Inc.) '. Pittsburgh, Pa. DIGEST OF TARIFF HEARINGS, H. R. 7456. 37 Gillette Safety Razor Co Boston, Mass. Goebel, J., & Co New York City. Graham, J. S. (Inc.) Seattle, Wash." Grey, Geo., & Co Detroit, Mich. Griffin Cutlery Works New York City. Grinnell Bros Detroit, Mich. Grump, S. & G. Co San Francisco, Calif. Guarantee Furniture Co San Antonio, Tex . Hager & Bros Lancaster, Pa. Halle Bros. Co Cleveland, Ohio. Halliburton, Albert, Co Tulsa, Okla. Hammer & Co San Francisco, Calif. Hartz, C. F., Co Detroit, Mich. Haslett Warehouse Co San Francisco, Calif. Hedet Co Baltimore, Md. Henckels, J. A New York City. Hermance, Nicholas New York City. Heyman, Marcus A New York City. Hill , Harold Newlin Philadelphia, "Pa. Hind Rolphy & Co San Francisco, Calif. Hobbs, Taft"& Co Boston, Mass. Hobson, Hauajhton & Co Si. George, N. Y. Hochschild, Kohn & Co. (Inc.) Baltimore, Md. Hopkins, James R St. Joseph, Mo. Hudson, J. L., and Co : Detroit, Mich. Hull Bros. Umbrella Co Toledo, Ohio. Hupp Motor Car Corporation Detroit, Mich. Ingram, Fred F., Co Detroit, Mich. Jahraus-Braun Co Buffalo, N. Y. Jandrey, E. E., Co Neenah, Wis. Johnson & Faulkner New York City. Jones, B. M., & Co. (Inc.) New York City. Jones, S. L., & Co San Francisco, Calif. Jordan Marsh Co ; Boston, Mass. Joske Bros. Co San Antonio, Tex. Katy Furniture Co San Antonio, Tex. Kemble, C., & Son Tidioute, Pa. Kern Commercial Co New York City. King Furniture Co...- San Antonio, Tex. Kirk, James & Co Chicago, 111. Klass, Max, Corporation New York City. Klein, Sol Chicago, 111. Kreiser, James R. (Inc.) New York City. Kresge, S. S., Co. Detroit, Mich." Kroiik, A., & Co Detroit, Mich. Lambert, William J Washington, D. C. Leatherbury, Rebote & Co Onancock, Va. Lincoln Knitting Co Merrill, Wis. Lining Merchants' Association of America New York City. Lugg, A. W., & Co Knoxville, Pa. Mac Williams Department Store Wilkes-Barre, Pa. McAllister & Co San Francisco, Calif. McAllister, W. M., Co Syracuse, N. Y. McCormick & Co Baltimore, Md. Maison Blanche Co New Orleans, La. Mandel, Loeb & Yankamer New York City. Mandrill, G. W. , & Co GloversviHe, N. Y. Mangin, I., & Co San Francisco, Calif. Manne & Weill New York City. Marshall Field & Co Chicago, 111. Martin, T. S., & Co Sioux City, Iowa. Matson Navigation Co San Francisco, Calif. Merchants' Dinner Club Battle Creek, Mich. Merchants' Exchange Seattle, Wash. Merchants & Manufacturers' Association Baltimore, Md. Mills Dry Goods Co Lansing, Mich. Moore Clothing Co Sioux City, Iowa. 7713422 4 38 DIGEST OF TARIFF HEARINGS,, H. R. 7456. Murphy, O. E Washington, Pa. Nathan, M., & Bros. (Inc.) Johnstown, Pa. National Retail Dry Goods Association New York City. Neuberger & Co New York City. Newcomb Endicott Co Detroit, Mich. Newhall, H. M., & Co San Francisco, Calif New York Tribune New York City. Northrup Glove Manufacturing Co Johnstown, N. Y. Norwegian American Cha'mber of Commerce. New York City. O'Connor Harrison & Co San Francisco, Calif. O'Connor, Moffatt & Co San Francisco, Calif. Oriental Trading Co Winona, Minn. Osborne, H. F., Co Detroit, Mich. Palace Hardware House , Erie, Pa. Park Davis & Co Detroit, Mich. Parrott & Co San Francisco, Calif. Peabody, Henry W., & Co New York City. Pellettic Stores Topeka, Kans. Pennock, Edward Philadelphia, Pa. Penny, J. 0., Co Crookston, Minn. Penny, J. C. , Co Phoenix, Ariz. Peoria Merchants' Association Peoria, 111. Philadelphia Drug Exchange .Philadelphia, Pa. Pincus, B. F., & Co Philadelphia, Pa. Pitcairn, William S., Corporation New York City. Poldi Steel Corporation of America New York City. Prager Co New York City. Prange, H. C., & Co Sheboygan, Wis. Putman, A. E., Co Washington, Iowa. Rafter, John R New York City. Ranshoffs San Francisco, Calif. Retail Merchants' Association San Francisco, Calif. Retail Merchants' Bureau Denver, Colo. Rhodes Co Seattle, Wash. Regtel, W. H., Sons Co Ogden, Utah. Rogers, Edwin A., & Co Boston, Mass. Rudd, Paul E Milwaukee, Wis. St. Louis Chamber of Commerce St. Louis, Mo. Schollenberger, T. M Chicago, 111. Schmidt, A. A New Rochelle, N. Y. Seattle Chamber of Commerce Seattle, Wash. Selchow & Righter Co ' New York City. Sherman & Sons Co New York City. Sherwood, Geo. H., & Sons Philadelphia, Pa. Slesinger, L., & Sons Baltimore, Md. Small, William, & Co Leavenworth, Kans. Spice Grinders' Section Boston, Mass. Sterchie Furniture Co San Antonio, Tex. Stern, L. A New York City. Stowen, G. A., Furniture Co San Antonio, Tex. Strauss, Levi & Co San Francisco, Calif. Sullivan, Sullivan and Theo J. Roche San Francisco, Calif. Taylor, Wm., Sons & Co Cleveland, Ohio. Teichert, Ralph H Passaic, N. J. Texas Retail Dry Goods Association Dallas, Tex. Texas Sales Co San Antonio, Tex. Thanhauser, S Philadelphia, Pa. Three Rivers Exchange Club Three Rivers, Mich. Tilden-Thurber Corporation Providence, R. I. Tophen Co New York City. Tottle, J. W. , Five and Ten Cent Stores Baltimore, Md. linger & Co New York City. Union Ribbon & Carbon Co Philadelphia, Pa. United Laundry (Inc.) New Orleans, La. Vasquez, J. A., & Co Habana, Cuba. Wainwright, H. R Pittsburgh, Pa. Warren Ax & Tool Co Warren, Pa. DIGEST OF TARIFF HEARINGS, H. R. 7456. 39 Washer Bros. Co San Antonio, Tex. Watt & Shand Lancaster, Pa. Weill, Raphael & Co San Francisco, Calif. Wells, J. B., & Sons Co Utica, N. Y. Welsbach Street Lighting Co. of America Philadelphia, Pa. Werner, Chas. H., & Sons Detroit, Mich. Weslow, A Anderson, Ind. Wessel, Henry, Co Baltimore, Md. Western Furniture Co San Antonio, Tex. Western Washington Wholesale Grocers' Association. .Seattle, Wash. Whitney, Arthur Newark, N. J. Whittaker, Clarke New York City. Williams, A., Co Reading, Pa. Wohl , Smith & Co New York City. Wolff, Marx., Co San Antonio, Tex. Wolfson, Saul, Dry Goods Co San Antonio, Tex. Woodcock, Henry New York City. William Wright Co Detroit, Mich. Wyckoff , A. B , Stroudsburg, Pa. Younkey Bros. (Inc.) Des Moines, Iowa. SCHEDULE 1. CHEMICALS, OILS, AND PAINTS. ACIDS AND ACID ANHYDRIDES. PARAGRAPH 1. ACETIC ACID. WITNESS, AND INTERESTS REPRESENTED. FAVORING LOWER DUTIES : Mr. V. G. Bartram, representing the Shawinigan Products Co. and the New York Products Corporation, New York City. Hearings: Pages 801-809. Rates suggested. Acetic acid to be placed on the free list. Remarks. The proposed duty of 2 cents per pound on acetic acid would exclude Canadian competition. Acetic acid is produced by this Canadian company synthetically and is obtained in the first stages 100 per cent pure. This pure acid is especially adapted for the manufacture of acetic anhydride and acetone and other pharma- ceutical chemicals. There are no producers of synthetic acetic acid in the United States. PARAGRAPH 1. ARSENIC ACID, ARSENIOUS ACID OR WHITE ARSENIC. WITNESS. FAVORING LOWER DUTIES : Tyson Bros. (Inc.), Flora Dale, Pa. (Brief; no appearance at hearings.) Rates suggested. The brief is a protest against the proposed duty of 25 per cent on white arsenic and arsenic acid. Remarks. If the duty proposed in H. R. 7456 goes into effect, fruit and vegetable growers will be compelled to pay high prices for arse- nate of lead and other arsenical spray materials. Arsenic is produced as a by-product from copper smelters, and producers are trying to hold the price up to 9 to 10 cents per pound, when they should be will- ing to sell at 3 or 4 cents per pound. PARAGRAPHS 1, 46, 54, AND 1604. CITRIC ACID, CITRATE OP LIME, LEMON AND ORANGE OILS, LEMON, LIME, AND SOUR ORANGE JUICES. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. G. Harold Powell, representing the California Citrus League, also the California Fruit Growers' Exchange, the Exchange By-Products Co., and the United Chemical Co., Los Angeles, Calif. Mr. George M. Hamilton, representing the Upland Lemon Growers' Asso- ciation, Mountain View Fruit Association, of Upland, and the College Heights Orange and Lemon Association of Claremont, Calif. Hearings : Pages 813-822. Witness: Mr. G. H. Powell, representing the California Citrus League and others. 40 DIGEST OF TAEIFF HEARINGS, H. E. 7456. 41 Costs and selling prices. The American and the foreign costs of production on citrate of lime are 20.2 cents and 5.1 cents, respectively. On citric acid the labor cost in the United States and Italy is 35.6 cents and 8.9 cents ; on oil of lemon, 44 cents per pound and 11 cents, respectively. The American wage scale is four times that of Italy. Rates suggested. Twenty cents per pound on citric acid ; 12 cents per pound on citrate of lime ; 40 per cent ad valorem on lemon and orange oil. By the desired removal of citrus juices from the free list they would* automatically come under paragraph 806, which pro- vides for a duty of 70 cents per gallon on fruit juices, n. s. p. f. This would terminate the importation of concentrated juices, in which form citric acid would enter free. Hearings : Pages 822-835. Witness: Mr. G. N. Hamilton, representing the Upland Lemon Growers' Association and others. Costs and selling prices. Details on growing and manufacturing costs were given, the differential in favor of Italy being 85.2 cents per pound on citric acid, 50.1 cents per pound on citrate of lime, and 91 cents per pound on lemon oil. The United States wage scale is four times that of Italy. The California Citrus League reports that the excess labor cost in the United States oyer that of Italy is known to be 26.7 cents per pound of citric acid produced, 15.1 cents per pound of citrate of lime, and 33 cents per pound of oil of lemon. In 1914 lemons sold for $2.20 a box laid down in New York. At pres- ent California lemons can be laid down in New York at $4.58*' a box: this figure allows no profit or interest. Last week California lemons sold for $3.19 a box at auction, and imported lemons were selling for $3.45. Size of industry. The Upland Lemon Growers Association has 213 members, owning 1.300 acres. Has erected a $200.000 plant for pro- duction of by-products, and has about $125,000,000 invested in groves and equipment. The association estimates that 12,500 men and their families depend on fruit growing. In 1920 the total area of bearing lemon trees was 33,059 acres; during the same year 3,615,000 boxes of lemons were shipped by California. About one-third of the citric acid consumed in the United States is produced in the California plants. Rates suggested. Seventy cents per pound on citric acid ; 40 cents per pound on citrate of lime ; 50 per cent ad valorem on oil of lemon ; $2.10 per gallon on lemon, lime, and sour orange and dried lemon juices. On all other products of the lemon, n. s. p. f., 70 cents per pound on the citric content thereof. PARAGRAPH 1. OXALIC AND FORMIC ACIDS. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. August Kochs, representing the Victor Chemical Works, Chicago, 111. The American Alkali and Acid Co., Bradford, Pa. (Brief.) Hearings: Pages 797-801. Witness: Mr. August Kochs. Costs and selling prices. Average wage in domestic factory. 55 cents ; minimum, 37| cents per hour. In October, 1919, the company's 42 DIGEST OF TARIFF HEARINGS, H. R. 7456. productive cost of oxalic was 24 cents per pound, the lowest up to that time. Then importations resulted in a cut of market price to 15 cents per pound. In June the plant accomplished a cost of 17 cents per pound made up of direct labor, 6.4 cents per pound ; raw mate- rials, 7 cents; factory operation, 1.1 cents; transportation, warehous- ing, administration, 2.5 cents per pound. It costs 18.28 cents per pound to make formic acid. German labor costs one-tenth of this, with wages of 40 marks per day. On July 16, 1921, German reports quote oxalic acid at 13f marks, or 7.62 cents per pound. Size of industry. Nine chemists and four to five chemical engineers employed; the plant is equipped to produce at the rate of 5,000,000 pounds per year: $600,000 capital in oxalic acid business. Rates suggested. Oxalic acid, 25 per cent ad valorem plus 5 cents per pound ; formic acid, 25 per cent ad valorem plus 5 cents per pound ; or 50 per cent ad valorem or 10 cents per pound specific. Witness : The American Alkali & Acid Co., Bradford, Pa. (Brief ; no appearance at hearing.) Costs and selling prices. Costs to the company were 9.8 cents in 1914, 30.9 cents in 1920, and are estimated at 16.5 cents for 1921. An itemized cost statement is included in the brief. The difference between German and United States labor costs is 9 cents per pound, in favor of Germany. German oxalic acid is being offered at 11 cents, c. i. f . New York. Size of industry. The company produces about 2,000,000 pounds a year and can produce 5,000,000 pounds if necessary. Rates suggested. Oxalic acid, 25 per cent ad valorem and 3 cents per pound if American valuation is retained; 10 cents per pound specific if American valuation is eliminated. PARAGRAPH 1. TANNIC ACID. WITNESS, AND INTERESTS KEPEESENTED. REQUESTING RECLASSIFICATION : Dr. Frederick W. Russe^ representing the Powers-Weightrnan-Rosengarten Co., Philadelphia, Pa., and the Mallinckrodt Chemical Works, St. Louis, Mo. Zinsser & Co., Hastings-on-Hudson, N. Y. Hearings : Pages 236-240. Witness : Dr. Frederick W. Eusse. Rates suggested. That paragraph 1 be amended to read : " Tannic acid, tannin, and extracts or decoctions of nutgalls, containing by weight of tannic acid less than 40 per cent, 4 cents per pound ; 40 per cent or more and less than 60 per cent, 10 cents per pound ; and 60 per cent or more, 20 cents per pound." Remarks. The witness desires a change in the limits of the groups specified for tannic acid because of the difficulty in analysis and be cause U. S. P. tannin, the highest and most expensive grade, is likely to fall in the middle group, although intended to come within the higher (above 80 per cent) at 20 cents per pound. In an amending brief, dated January 5, 1922, Dr. Eusse states : Rates suggested. In view of advices from the United States Tariff Commis- sion, that they have given thorough consideration to the analysis of tannic DIGEST OF TARIFF HEARINGS, H. R. 7456. 43 acid, and recognize the points raised in a previous brief, the Mallinckrodt Co. now suggests the following classification and rates of duty for tannic acid : " Tannic acid, tannin, and extracts or decoctions of nutgalls, containing by weight of tannic acid less than 50 per cent, 6 cents per pound; 50 per cent or more and not medicinal, 15 cents per pound ; 50 per cent or more and medicinal, 20 cents per pound." Witness: Zinsser & Co., Hastings-on- Hudson, N. Y. (Brief; no appearance at hearings.) Rates suggested. This paragraph to be changed to read as follows : Tannic acid less than 40 per centum, 4 cents per pound; more than 40 per centum and less than 55 per centum, 10 cents per pound ; and 55 per centum and over, 20 cents per pound. Remarks. This change is desired because there is no reliable method for the determination of tannin, and the percentage limits specified in the bill would probably throw U. S. P. tannin in the middle class, although intended to fall within the higher group. PARAGRAPHS 1 AND 9. TARTARIC ACID, CREAM OF TARTAR, AND TAR- TRATE MATERIALS. WITNESSES. FAVORING PROPOSED OK HIGHER DUTIES : The Tartar Chemical Works, New York City. Charles Pfizer & Co. (Inc.), New York City. Witness: The Tartar Chemical Works. (Brief; no apearance at hearings.) Rates suggested. The duty on tartaric acid to be increased from 6 cents per pound to 6 cents plus 10 per cent ad valorem; the duty on cream of tartar (par. 9) to be increased from 5 cents per pound to 5 cents plus 10 per cent ad valorem. Witness: Chas. Pfizer & Co. (Inc.). (Brief; no appearance at hearings. ) Rates suggested. Six cents per pound and 10 per cent ad valorem on tartaric acid, and 5 cents per pound and 10 per cent ad valorem on argols, tartar, and wine lees containing more than 90 per cent of potassium bitartrate, cream of tartar, Eochelle salts, or potassium sodium tartrate. Remarks. Since H. R. 7456 was framed, competition from Ger- many has increased so that the company's business has been practi- cally cut in half. PARAGRAPH 2. ACETALDEHYDE AND PARACETALDEHYDE. WITNESSES, AND INTERESTS REPRESENTED. FAVORING LOWER DUTIES : Mr. Ellwood B. Spear, representing the Goodyear Rubber Co., Akron, Ohio. Mr. Mathew Adgate, representing the Naugatuck Chemical Co., Naugatuck, Conn. Hearings : Page 809. Witness : Mr. E. B. Spear, representing the Goodyear Rubber Co. Rates suggested. That these products come in duty free or at a very low rate. 44 DIGEST OF TARIFF HEARINGS, H. R. 7456. Remarks. If the duty is made very high it will mean that witness's company will have to abandon the use of these products in competi- tion with other rubber companies in other substances. Hearings: Pages 810-812. Witness : Mr. M. Adgate, representing the Naugatuck Chemical Co. Rates suggested. A protest against high duties on acetaldehyde and paracetaldehyde. The present 15 per cent ad valorem rate is ample, as the entire foreign competition will be with Canada and not with Europe. PARAGRAPH 2. ACETALDEHYDE, PARACETALDEHYDE, ALDOL, OR ACETALDOL, AND ALDEHYDE AMMONIA. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. L. H. Davis, representing the Carbide & Carbon-Chemicals Corporation, New York City. FAVORING LOWER DUTIES : Mr. M. V. Bartram, representing the Shawinigan Products Co. and rht> New York Products Corporation. Hearings: Pages 812-813. Witness: Mr. L. H. Davis, representing the Carbide & Carbon- Chemicals Corporation. Costs and selling prices. The cost of production is not the same in the United States and Canada, because of lower cost of power in Canada ; the large-scale plants built under the stimulus of war re- quirements are cheaper to operate than smaller plants to supply home markets: the Canadian plants were built on war-time contracts, with provision for amortizing the entire capital cost in one year's output. Size of industry. This company, with its associated companies, has been actively engaged in the development of synthetic processes for the commercial manufacture of many chemical derivatives of acetylene, including all those above given, since the year 1914. It has produced and sold substantial quantities of such products commer- cially and is prepared to engage more extensively in such business provided it receives protection in the new tariff law. Hearings: Pages 801-809. Witness : Mr. V. G. Bartram, representing the Shawinigan Prod- ucts Co., etc. Rates suggested. That commercial grades of these products be allowed to enter the United States duty free. Remarks. These products are not manufactured at the present time on a commercial scale in this country. Acetaldehyde and para- cetaldehyde have been developed as accelerators in the vulcanization of rubber, in the manufacture of synthetic tanning extracts, dyes,, synthetic perfumes, and many other products. Aldol is being de- veloped for use in the flotation process in concentrating copper ores* DIGEST OF TARIFF HEARINGS, H. R. 7456. 45 PARAGRAPH 4. BUTYL ALCOHOL AND FUSEL OIL. WITNESSES, AND INTERESTS REPRESENTED. r FAVORING PROPOSED OR HIGHER DUTIES : Mr. H. B. Warner, jr., representing the Commercial Solvents Corporation, Washington, D. C. FAVORING LOWER DUTIES : The Norwich Chemical Manufacturing Co., East Smethport, Pa. (Brief.) The Anderson Chemical Co., Wallington, X. J. (Brief.) The Van Schaack Bros. Chemical Works, Chicago, 111. (Brief.) The National Wood Chemical Association, Susquehanna, Pa. (Brief.) Hearings : Pages 839-843. Witness : Mr. H. B. Warner, jr. Costs and selling prices. Butyl alcohol to-day can be sold in this country for 23 cents a pound. The average domestic price of fusel alcohol before the war was 21 cents per pound. The cost of freight and packing on fusel alcohol from European markets to New York amounts to 3^ cents to 4 cents per pound. Imported fusel oil is offered at 17 cents per pound. A brief subsequently filed by the wit- ness (pp. 841-843) includes a table showing production cost for June, 1921, as 16.62 cents per pound of combined solvents, sold at 17.12 cents. Combined solvents consist of butyl alcohol 56 per cent,' acetone 32 per cent, and ethyl alcohol 12 per cent. Size of industry. The Terre Haute plants of the corporation have an annual capacity of 5,000,000 gallons of combined solvents, only 3,000.000 gallons of which is butanol. Rates suggested. A duty of 20 cents per -pound on butanol, amyl alcohol and fusel oil, as amyl alcohol and fusel oil come into direct competition with butyl alcohol. Witness : The Norwich Chemical Manufacturing Co. (Brief ; no appearance at hearings.) Rates suggested. The brief protests against the increase in duty on fusel oil from one-fourth cent per pound (act of 1913) to 6 cents per pound (H. R. 7456). Remarks. The company understands that the proposed increase is requested by the Commercial Solvents Corporation, manufactur- ers of butyl alcohol, a substitute for fusel oil. Such increase would work an injury to the users of fusel oil. It would bar imports and increase the market for butyl alcohol, and thus produce a greater supply of acetone, which is marketed as a by-product of butyl al- cohol. It would be ruinous to the wood chemical industry, previ- ously the sole source of acetone produced from acetate of lime, one of the principal products of that industry. Eighty per cent of the fusel oil consumed in the United States is imported. Witness: The Anderson Chemical Co. (Brief; no appearance at hearings.) Rates suggested. The brief protests against the increase on crude fusel oil. It is believed that it would be unfair and unwise to place a duty on fusel oil in excess of 1 cent per pound, which would give ample protection to the one concern manufacturing butyl alcohol. Prior to the war, about four times as much fusel oil was imported as was produced in this country. It is the only known substitute 46 DIGEST OF TARIFF HEARINGS, H. R. 7456. for butyl alcohol and is limited in its application. A duty of 6 Cents per pound would have the effect of making butyl alcohol a monopoly, as patent restrictions confine the manufacture of this product to a single corporation. Witness: The Van Schaack Bros. Chemical Works. (Brief; no appearance at hearings.) Costs and selling prices. The firm is paying $1.25 per gallon for fusel oil at the present time. A duty of 6 cents per pound would add 42 cents per gallon, a tremendous increase when added to the present cost. Rates suggested. The rate on fusel oil should remain at one-fourth cent, or should not be increased beyond 1 cent per pound at most. Remarks. The increased duty would scarcely yield more than $150,000 a year. The Commercial Solvents Corporation, of Terre Haute, Ind., is the only producer of butyl alcohol: this product is used, in some instances, as a substitute for fusel oil. Inasmuch as the corporation has an entire monopoly on butyl alcohol, the proposed duty would favor the corporation to the great disadvantage of the Van Schaack firm. Witness : The National Wood Chemical Association, Susquehanna, Pa. (Brief ; no appearance at hearings.) Size of industry. Fusel oil is a by-product of the manufacture of ethyl alcohol. The domestic production from this source has been less than 20 per cent of the requirements of American industry. Rates suggested. The brief protests against the proposed increase in duty on fusel oil. Remarks. The Commercial Solvents Corporation, of Terre Haute, Ind., purchased the plants, processes, and patents used by the United States and British Governments for the manufacture of acetone and butyl alcohol. Acetone produced by this process competes directly with that made from acetate of lime, a product of the wood chemical industry. The Commercial Solvents Corporation has requested a duty of 20 cents per gallon, equivalent to 140 per cent on the present price of crude fusel oil. The duty in the House bill of 6 cents per pound is approximately 40 per cent of the present value of fusel oil. The proposed duty would increase the cost of fusel oil to consumers, now dependent upon Europe for 80 per cent of their requirements, would enhance the selling price of butyl alcohol, and enable the Com- mercial Solvents Corporation to dump by-product acetone on the market at less than the cost of production by wood distillation. PARAGRAPH 5. AMMONIUM ICHTHYOLATE. WITNESS, AND INTEREST BEPBESENTED. FAVORING PBOPOSED OB HIGHEB DUTIES : Mr. John Kuesel, representing the Meadows Oil & Chemical Co., Tenafly. N. J. Hearings: Pages 844-847. Costs and selling prices. The manufacturing costs of this medici- nal article exceed $2.70 per pound, while foreign synthetics are being dumped on the market as low as 35 cents per pound. DIGEST OF TARIFF HEARIXGS, H. R. 7456. 47 Size of industry. Eight or nine men in the plant; the company has made about 10.000 pounds of ammonium ichthyolate from fossil- iferous marine deposits located in Texas. Rates suggested. A duty of $2 a pound as a counter charge on any- thing sold as a substitute. Remarks. This product is used as a remedy for infectious skin diseases and in hair tonics and ointment. PARAGRAPH 5. SUGAR or MILK. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Charles Holman, representing the Associated Dairymen of California. (Brief; no appearance at hearings). Costs and selling prices. During 1920 the average cost of produc- ing sugar of milk in California was 20^ cents per pound. Size of industry. From March 1, 1920, to February 28, 1921, the Milk Producers' Association of Central California, at Modesto, pro- duced 940.680 pounds of sugar of milk. The cost of the by-products plants which were idle on account of low selling prices is at least $75,000. Rates suggested. Four and a half cents per pound. Remarks. Central Californian sugar of milk was sold at a net loss of $55.35 during 1920, and factories have been closed since Sep- tember, 1921. Unless adequate protection is afforded, there appears to be little hope for this industry in the immediate future. PARAGRAPH 7. AMMONIUM SULPHATE. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. C. G. Atwater, representing committee of by-products coke producers and manufacturers, New York City. FAVORING LOWER DUTIES : Mr. R. F. Bower, representing the American Farm Bureau Federation. Hearings : Pages 848-855. Witness: Mr. C. G. Atwater, representing committee of by-prod- ucts coke producers and manufacturers. Size of industry. The producing capacity in the United States more than equals the home demand. Rates suggested. The rate of $12 per ton in the bill to be retained. Remarks. Submits (on page 850) a table of production and con- sumption of nitrogenous materials in Germany, showing a German surplus available for export amounting to 1,490,000 tons. A similar table shows that in 1920 production in the United States exceeded consumption by 60.000 tons. Hearings : Pages 855-860. Witness: Mr. R. F. Bower, representing the American Farm Bu- reau Federation. Rates suggested. That ammonium sulphate be left on the free list. Remarks. Ammonium sulphate is one of the two chief sources of nitrogen fertilizer in the United States; the other is sodium nitrate 48 DIGEST OF TARIFF HEARINGS, H. R. 7456. from Chile. In the case of the latter, the domestic producer is protected by an export duty of $11.85 per ton, benefiting the Chilean treasury. The witness points out that the Barrett Co. is agent for all large by-product coke-oven industries in the sale of ammonium sulphate. PARAGRAPH 7. AMMONIUM NITRATE. FAVORING LOWER DUTIES: The Hercules Powder Co., Wilmington, Del. (Brief; no appearance at hear- ings.) Costs and selling prices. The present prevailing price of ammo- nium nitrate is 6 cents per pound; therefore the duty of 25 per cent ad valorem amounts to 1| cents per pound. Rates suggested. On the basic rate of three-fifths of 1 cent per pound on ammonium sulphate, as provided in H. R. 7456, the rate on ammonium nitrate in proportion to the ammonia content would not exceed one-half cent per pound. It is desired that this rate be sub- stituted for the ad valorem rate. Remarks. In time of peace nitrate of ammonia is used practi- cally only in the manufacture of dynamite. The proposed rate would impose an excessive burden on the mining industry, without ^giving a corresponding benefit to producers of ammonia gas. PARAGRAPH 7. AMMONIUM PERCHLORATE. FAVORING LOWER DUTIES : The Atlas Powder Co., Wilmington, Del. (Brief; no appearance at hear- ings.) Size of industry. The company uses approximately 4.000.000 tons of this material yearly. At the present time there are no plants in the country producing or equipped to produce ammonium perchlo- rate. Rates suggested. Ammonium perchlorate to be included in the- free list. Remarks. A duty will not give protection to any manufacturer : will only increase cost of explosives to the extent that the company would have to give up the manufacture of the improved nonfreezing grades. As far as is known, it is impossible to substitute any other chemical for ammonium perchlorate in this class of explosives- PARAGRAPH 7. LIQUID ANHYDROUS AMMONIA. WITNESSES. FAVORING PROPOSED OR HIGHER DUTIES : The National Ammonia Co. (Inc.), St. Louis, Mo. (Brief.) The Henry Bower Chemical Manufacturing Co., Philadelphia, Pa-. (Brief.) Witness: The National Ammonia Co. (Inc.). (Brief; no appear- ance at hearings.) Rates suggested. The duty on liquid anhydrous ammonia to be in- creased from 2^ to 5 cents per'pound. Ammonia sulphate regulates the DIGEST OF TARIFF HEARINGS, H. R. 7456. 49 price of other ammonium compounds. H. R. 7456 provides a rate of three-fifths of 1 cent per pound on ammonia sulphate. As about 4.4 pounds of sulphate are required to produce 1 pound of anhydrous am- monia, the duty of three-fifths of 1 cent per pound on ammonium sul- phate is equivalent to 2.64 cents per pound calculated on the anhydrous ammonia that it will produce. This gives a differential of one- fourth cent per pound against liquid anhydrous ammonia. Witness: The Henry Bower Chemical Manufacturing Co. (Brief; no appearance at hearings.) Kates suggested. A duty of 5 cents per pound to be placed on liquid anhydrous ammonia, equivalent to 16 per cent ad valorem, American valuation. Remarks. The duty on liquid anhydrous ammonia is not equitable, calculated on the duties that may be levied on ammoniacal liquor and the duty proposed on ammonium sulphate, the raw materials for anhydrous ammonia. PARAGRAPH 7. AMMONIACAL LIQUOR. WITNl REQUESTING RECLASSIFICATION : The Michigan Ammonia Works, Detroit, Mich. The National Ammonia Co., St. Louis, Mo. The Granby Consolidated Mining, Smelting & Power Co. (Ltd.), 25 Broad Street, New York City. (Briefs; no appearance at hearings.) Rates suggested. Ammoniacal liquor is not mentioned specifically in the Fordney bill. The briefs request classification at a rate not exceeding 10 per cent ad valorem, as now provided for in the act of 1913. Remarks. This is an important raw material in the manufacture of other ammonium compounds. PARAGRAPH 7. AMMONIUM CARBONATE AND AMMONIUM BICAR- BONATE. FAVORING PROPOSED OR HIGHER DUTIES : The Michigan Ammonia Works, Detroit, Mich. (Brief; no appearance at hearings.) Costs and. selling prices. In a brief dated August 8, 1921, dealing with ammonium carbonate, the company notes the largely increased importations from Europe at prices with which the American in- dustry is unable to compete. As a result, the company, after having materially reduced production, has now discontinued the manufac- ture, hoping for better conditions. Labor forms a large item in the cost of production, a condition affording foreign competitors a great advantage. Rates suggested. A duty of 4 cents per pound on ammonium car- bonate and of 5 cents per pound if packed in cans, boxes, kegs, or containers other than casks or barrels. This differential duty is called for by the amount of ammonium carbonate reaching this country 50 DIGEST OF TARIFF HEARINGS, H. R. 7456. from abroad in the containers mentioned. Domestic purchases are largely in packages most convenient for immediate consumption. Remarks. This product is mainly used by bakers in the produc- tion of sweet goods. Less than a pound is required for 200 pounds of flour, producing about 300 pounds of such goods. In a supplementary brief, dated January 18, 1922, the company asks for the inclusion of ammonium bicarbonate with ammonium car- bonate. Large quantities' of the bicarbonate are now being imported as a substitute for the carbonate, and the interests of the two are practically identical. The same rates of duty are therefore ap- plicable and requested. PARAGRAPH 8. ANTIMONY OXIDE. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. R. L. Hoget, representing the Antimony Compounds Co., Piscatawav, N. J. FAVORING LOWER DUTIES : The True-Tagg Paint Co.. Memphis, Tenn. (Brief.) Hearings: Pages 860-866. Witness: Mr. R. L. Hoget. Costs and selling prices. American production cost is 8 cents a pound for antimony oxide ; the Chinese about 2.5 cents. Prewar cost of production in China, f. o. b. Shanghai, was 3 cents to 3^ cents per pound. Chinese wages run from 5 to 40 cents per day, the effi- ciency of the Chinese 12-hour coolie being approximately 35 to 50 per cent of the American laborer, whose wages are $3 to $4 for 8 hours' work. Prices have varied from 7.8 and 9 cents to 25 cents per pound during the war. Even in the opening years of the present century the last-named price was obtained. Size of industry. The prewar production of the metal and the oxide was about 10,000 tons, of which American manufacturers pro- duced 2,000 or 2,500 tons. Rates suggested. A duty of 4 cents per pound on oxide and metal. Witness: The True-Tagg Paint Co. (Brief; no appearance at hearings.) Rates suggested. That " Timonox," a paint pigment composed of antimony oxide, be specially provided for at 1 cent per pound. An increase in the rate of duty is requested because the Italian Govern- ment, since the bill H. R. 7456 passed the House of Representatives, increased the export duty on tartrate materials from lire 2.20 gold to lire 6 gold- per 100 kilograms. This increase on raw materials will add about 1 cent per pound to the finished product. During the last nine months large quantities of cream of tartar and tartaric acid have been thrown on this market, and American manufacturers have operated at about 40 per cent of production. Remarks. A process has been perfected in England which makes antimony oxide suitable for paint and varnish making. It does not compete with the ordinary grades of antimony oxide. DIGEST OF TARIFF HEARINGS, H. R. 7456. 51 PARAGRAPH 8. ANTIMONY COMPOUNDS. WITNESS. AND INTEREST REPRESENTED. FAVORING LOWER DUTIES : Mr. G. C. Riddell (statement and brief), representing the Wan Chang Trading Corporation. Hearings : Pages 867-870. Rates suggested. Antimony or needle or liquated antimony to be transferred to paragraph 376 and made dutiable at 1 cent per pound, compensatory with the rate on the metal, which is H cents per pound. Remarks. If the provisions of H. R. 7456 were to make liquated or needle antimony the article of commerce instead of antimony metal or antimony oxide the crude antimony would be shipped here from China and converted into metal or oxide in this country. This would cause a complete change in the Chinese industrial position on antimony, as the plants would have to be rearranged to a basis of producing crude instead of metal. PARAGRAPH 8. TARTAR EMETIC OR POTASSIUM AMMONIUM TARTRATE. FAVORING PROPOSED OR HIGHER DUTIES: Rohm & Haas Co., Philadelphia, Pa. (Brief; no appearance at hearings.) Costs and selling prices. The minimum selling price found by the company is 31 cents per pound. The proposed specific duty of 5 cents per pound would be lower than the ad valorem rate of 25 per cent now in force. Rates suggested. A specific duty of 15 cents per pound or an ad valorem rate of 50 per cent. BARIUM CHEMICALS. PARAGRAPHS 11 AND 64. BARIUM DIOXIDE, NITRATE, CARBONATE, AND CHLORIDE. BARYTES, AND BLANC FIXE. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. J. G. Timolat (statement and brief), representing the Oakland Chemical Co., New York. Mr. Maximilian Toch, representing barium manufacturers in the United States ; address, New York City. The Chicago Copper and Chemical Co., Chicago, 111. (Brief.) The J. H. R. Products Co., Willoughby, Ohio. (Brief.) FAVORING LOWER DUTIES : The American Face Brick Association, Chicago. 111. (Brief.) John Bene & Sons (Inc.), Brooklyn, N. Y. (Brief.) Hearings : Pages 870-874. Witness : Mr. J. G. Timolat. Costs and selling prices. In 1890-1898, barium peroxide cost 12 to 18 cents per pound to produce. In 1898 the English imported peroxide sold at 10 cents per pound. In 1918 the imported German 52 DIGEST OF TARIFF HEARINGS, H. R. 7456. barium sold at 6| cents per pound. The domestic cost in 1919 was 19.7 cents; labor being about one-third of the total. In 1919 barium carbonate had a cost value of 3.16 cents per pound : barium chloride, 5.39 cents per pound, and blanc fixe. 2.94 cents per pound. Eastern and western production and freight costs of barytes were given. In 1912-13, labor in the German chemical industry on the Rhine re- ceived 3 marks (72 cents at par value) per 10-hour day. In domestic plants $2 was being paid for 9 hours' work. Rates suggested. The duty on crude barytes should not exceed $2 per ton; on barium peroxide', 4 cents per pound: barium carbonate. 1 cent per pound; barium chloride, l| cents per pound: blanc fixe, 1 cent per pound: barium sulphide, i cent per pound: barium nitrate, 2 cents per pound. Hearings : Pages 883-885. Witness: Mr. Maximilian Toch. Costs and selling prices. Barium chloride costs $106 per ton and barium carbonate $62 to manufacture in the United States. Barium chloride was selling in January, 1921, at $70 per ton, duty paid. To-day Germany offers it at $43 per ton of 2,240 pounds, or small lots at $53 per ton of 2,000 pounds. Barium carbonate is now being delivered from Germany in Xew York, free of duty, at less than $45 per ton. Rates suggested. On barium carbonate and barium sulphate (arti- ficial), 2 cents per pound; barium chloride and sodium sulphide (con- centrated), 2| cents per pound; barium sulphide, H cents per pound: barium nitrate, 5 cents per pound; sodium sulphide (crystals), \\ cents per pound ; barium peroxide, 8 cents per pound ; and witherite, 1 cent per pound. Other barium compounds, etc., 25 per cent ad valorem, to be taken in every case as 25 per cent of the American value or. in case of American valuation, there should be a flat duty of 50 per cent on all barium chemicals and barium products. These rates are based on protection of the American producer against im-' ported German barium chemicals. Witness: The Chicago Copper and Chemical Co. (Brief; no ap- pearance at hearings.) Costs and selling prices. Foreign barium carbonate, barium chloride and barium hydrate are offered at 2 cents per pound below the lowest price the company could possibly make. Rates suggested. Higher duties on barium compounds than called for in H. R. 7456 ; barium hydrate to be mentioned specifically. Remarks. The company's plant has been practically closed down for the last 8 months, not on account of general stagnation of business, but because German products are coming in at so much below the company's actual cost. Witness: The J. H. R. Products Co. (Brief; no appearance at hearings.) Costs and selling prices. The cost of producing barium peroxide in the United States in 1919 was 19.7 cents per pound; to-day the cost is at least 16 cents. The foreign product is being offered at be- tween 8 and 15 cents per pound, c. i. f . New York. DIGEST OF TARIFF HEARINGS, H. R, 7456. 53 Rates suggested. An embargo until currency exchange becomes normal ; thereafter a duty of not less than 8 cents per pound. Witness: The American Face Brick Association. (Brief; no appearance at hearings.) Costs and selling prices. The prewar price of barium carbonate was between $25 and $30 per ton, f. o. b. New York. The price f . o. b. Xew York has been as high as $80 to $90 per ton within the past two years, and is now about $45 per ton. Rates suggested. The brief protests against a duty of 1 cent per pound on precipitated barium carbonate. Remarks. Barium carbonate is used by more than one-half of the face-brick manufacturers for the purpose of keeping their brick free from efflorescence, or "whitewash." As from 5 to 15 pounds are used per 1,000 brick, the proposed duty of 1 cent per pound would add from 4 to 12f cents per 1,000 to the cost. Hearings: Page 5121. Witness: John Bene & Sons (Inc.), Brooklyn, New York. (Brief.) Costs and selling prices. A high-grade quality English barium dioxide can be imported at present, duty paid, for 16 cents per pound. A lower-grade German barium dioxide can be imported for 12| cents per pound, duty paid. The domestic production can be sold (quoting from a letter) '" at a price to meet the lowest reputable firm in Germany." Rates suggested. Free. Remarks. Testimony is presented to show that there is vir- tually a monopoly of barium dioxide in this country and that if the proposed duty of 2^ cents per pound goes into effect advantage would be taken to increase the price accordingly. PARAGRAPH 14. CAFFEINE AND TEA WASTE. WITNESS, AND INTEREST REPRESENTED. FAVORING LOWER DUTIES : Mr. John F. Quceny, representing the Monsanto Chemical Works, St. Louis. Mo. Hearings: Pages 885-901. Size of industry. The company is not a war concern ; it has been in business over 20 years and built up quite a big business. Rates suggested. The company asks that impure tea, tea waste, and tea siftings (raw materials for caffeine) be transferred to the free list and that the rate of $1.50 per pound on caffeine be retained. Salts or compounds of caffeine should carry the same rate of duty as caffeine itself, because they contain about 75 per cent of the pure article. Remarks. The present duty 1 cent per pound on tea waste is equivalent to 45 cents per pound on the extractable caffeine. Since 1914 freight rates on tea have increased from 65 cents to $1.90 per 100 pounds, an increase of $1.25 per 100 pounds. This means an in- crease of 55 cents per pound in the cost of caffeine in the tea, so that duty and freight amount to $1.30 per pound on the contained caffeine. 7713422 5 54 DIGEST OF TARIFF HEARINGS, H. R. 7456. PARAGRAPH 15. CALCIUM CARBIDE. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : The National Carbide Corporation, Bluefleld, W. Va. (Brief.) FAVORING LOWER DUTIES : Mr. Don B. McCloud, representing the Gas Products Association, Chicago, 111. Mr. L. F. Loutrel, representing the Shawinigan Products Corporation, New York City. Mr. It. A. Witherspoon, representing the Canada Carbide Co., Montreal, Quebec. Mr. C. C. Pusey, representing the Alexander Milburn Co., Baltimore, Md. (Brief.) The Paschall Oxygen Co., Philadelphia, Pa. (Brief.) The United States Welding Co., Minneapolis, Minn. (Brief.) The Nickel Fabricating Co. (Inc.), Philipsburg, Pa. (Brief.) The Iron & Ore Corporation of America, New York City. (Brief.) Hearings : Pages 934-938. Witness : Mr. Don B. McCloud, representing the Gas Products Association. Costs and selling prices. Domestic carbide sold for $98 per ton in January, 1920, and for $112 a ton in September, 1920. The German product is inferior to the American, yielding 3.7 cubic feet per pound on lump carbide as against 4.5 cubic feet per pound for American. Rates suggested. The testimony is a protest against a duty on calcium carbide. In conjunction with oxygen the product is used for welding and cutting metals. Remarks. Details are given in regard to the organization and ac- tivities of the Union Carbide Co., a Virginia corporation, and other companies. Statements under this head have evoked written com- ment from that company, summarized on page 55. These are followed by an abstract of a brief submitted by the National Carbide Corporation. Hearings: Pages 901-904. Witness: Mr. L. F. Loutrel, representing the Shawinigan Prod- ucts Corporation. Costs and selling prices. Best price quoted above firm, $65 per ton, f. o. b. Hamburg, on what are called large sizes. The crushed (smaller) sizes command $5 per ton more. The United States prod- uct sells in the neighborhood of $100 per ton, delivered at consuming points. The witness claims that the German product is incorrectly sized and packed for marketing in the United States. Size of industry. Witness estimates the domestic production at 90,000 tons, of which 80,000 tons is produced by the Union Carbide Co. and the remainder by four other producers in the United States. Comparability. German carbide yields from 3.3 to 3.9 cubic feet per pound, whereas the American and the Canadian products run from 4.5 to 4.6 cubic feet, Rates suggested. That carbide be placed on the free list. Remarks. Warehousing for the proper distribution of carbide is, in the witness's opinion, a large factor. The Union Carbide Co. oper- ates 170 warehouses, the Canadian Carbide Co. 38, and the other four United States producers about 30. The witness submitted several let- ters from domestic firms protesting against a duty on carbide and a DIGEST OF TARIFF HEARINGS, H. R. 74,56. 55 lengthy brief containing references to the Union Carbide Co. See below. Hearings : Pages 904-934. Witness: Mr. E. A. Witherspoon, representing the Canada Car- bide Co. L 'osts and selling prices. The cost of carbide to the company last year on a total of 33,326 tons, of which 13,146 tons went into the United States, was $81.91 per ton. The price received, $83.18 per ton, left a profit of $1.27 per ton. The power used in the manufac- ture of carbide represents slightly under 15 per cent ; steel sheets, 28.75 per cent ; coke, 14 per cent ; lime from the United States, about 10.5 per cent, and electrodes, 8.67 per cent of the total production cost. 8-ize of industry. The company has a 5 per cent bond issue of $2,000,000 and is paying $35,000 of preferred stock interest. Remarks. It is claimed that the company's advantage on power is more than offset by the freight haul to Quebec on raw materials bought in the United States, and the corresponding long haul on carbide from Shawinigan to United States markets. Summary ' of comment referred to above. The testimony and briefs of the Shawinigan and allied interests are critically reviewed by the Union Carbide Co. in a letter dated New York, November 2, 1921, to the Senate Committee on Finance, of which the following is an abstract: Exception is taken to the ignoring of the production of car- bide, in large quantities, in Norway, -Sweden. Switzerland, and other European countries, at extremely low costs, from abundant hydro-electric power. Objection is also offered to the allegation that the German product is much inferior to that from American and other sources on the basis of certain tests made in London and which are not regarded as representative by the Union Car- bide Co. In support of this attitude the company submits letters and an affidavit showdng that German carbide is fully equal or higher than the American standard, both as regards gas content and proper sizing and, further, that analysis was made from samples actually taken from German carbide now being sold in the United States. As regards the necessity of a duty on this material sup- ported by the company and denied by the Shawinigan inter- ests the letter refers to recent importations of calcium carbide. It notes, also, definite quotations for such German material at a price below the Canada Carbide Co.'s affirmed cost of pro- duction and precluding that company from placing its product on the market. Among evidence of that tendency is a letter from an Amsterdam firm, dated September 5, 1921, acting as the sole sale concessionaires for a number of the principal Euro- pean carbide plants, in which, after referring to the advantage conferred by the exchange situation, .the statement is made : " We intend coming into your market." Coming to the assertion that United States production capac- ity is inadequate for the country's needs, it is affirmed that the Union Carbide Co. alone, without regard to the capacity of the 56 DIGEST OF TARIFF HEARINGS, H. R. 7456. other manufacturers in the United States, has sufficient facili- ties and power to meet the entire demand. The company repels the charge of unfairness to prospective customers and alludes to statements of the Canada Co. that the placing of a United States duty on importations would lead to the establishment of a plant on the American side of the line by the Canada Co. As matters now stand, the company asserts that more than 40,000 tons of calcium carbide, valued at $3,500,000, were imported into the United States from Canada in 1920. Part of this was pro- duced in the Union Carbide Co.'s subsidiary plant on Canadian soil, erected in consequence of the placing of calcium carbide on the free list under the Underwood Act. The company's total outlay on this plant and on a similar plant in Norway amounts to $10,000,000. In the absence of a protective duty, the company will be forced to rely on these two plants, operated at extremely low costs, for their entire supply to the United States, thereby depriving thousands of American operatives of employment. On the other hand, the proposed duty of 1 cent per pound would lead to the utilization of the Norway plant for other purposes, such as electric smelting of pig iron, the product to be disposed of in other parts of the world. The Union Carbide Co. strongly favors the protective tariff policy and states definitely that, if the proposed duty is adopted, no increase in its prices will follow. In a supplementary communication, dated December 2. 1921, the Union Carbide Co. directs* attention to a bulletin of the New York News Bureau Association, dated December 1, 1921, in which the Canada Carbide Co. is reported as having joined with the British Cellulose Corporation in an application to have carbide declared a key industry under the British safeguarding of industries act, 1921. The effect of such declaration would be to give Canada, as a unit of the British Empire, free entry of calcium carbide into Great Brit- ain, as compared with a duty of 33^ per cent levied on that product manufactured in the United States and other countries. It is also noted that acetic acid, largely produced from calcium carbide, is already included as a key-industry product under the act, with cor- responding results. The Union Carbide Co. regards the efforts of Canadian manufac- turers in this direction as highly inconsistent with their action in opposing the duty on calcium carbide -proposed in the bill. In a brief, dated August 31, 1921, the National Carbide Corpora- tion, of Bluefield, W. Va. (pp. 938-947) , deals at length with state- ments made before the committee. The arguments are summarized below : The corporation, although believing that a higher duty of H cents per pound on calcium carbide is justifiable under present conditions, including foreign-exchange rates, is content to ac- cept the 1-cent rate provided in the House bill. Referring to the opposition to the duty, the brief combats the claim that the duty would tend to create a monopoly for the Union Carbide Co/ The corporation believes that the normal re- quirements of the United States are overstated by the opponents DIGEST OF TARIFF HEARINGS, H. R. 7456. 57 of the duty at 150.000 tons, just as they have underestimated the country's productive capacity. An annual demand of 120.000 tons is much nearer the mark, while there are American plants capable of producing, in the aggregate, from 123,000 to 168,000 tons, of which 80.000 to 125.000 tons are due to the Union Car- bide Co/s plant. The brief goes on to state that there is equally little fear of a monopoly bein) There is practically no pure domestic oil produced, as Ameri- can fishermen do not separate the cod livers from those of the other fish which constitute the average catch, and therefore the so-called domestic cod oil is rarely, if ever, a pure cod-liver oil. Only a liver oil is suitable for tanning purposes, and therefore the leather manu- facturers insist upon pure Newfoundland oil only. Rates suggested. Cod oil should be retained on the free list. Remarks. Only about 20 per cent of cod and cod-liver oils are used for medicinal purposes ; the bulk of the oil imported or produced is for industrial uses. Witness: Reiff & Co., Philadelphia, Pa. (Brief; no appearance at hearings.) Remarks. American cod oil is inferior to Newfoundland cod oil. The proposed tax will result in higher prices for inferior shoes, harness, etc. VEGETABLE OILS. PARAGRAPH 50. sCocoNUT AND LINSEED OIL. WITNESS, AND INTEREST REPRESENTED. FAVORING LOWER DUTIES : Mr. John F. Conway, representing E. F. Drew Co. (Inc.), New York City. Hearings : Pages 1194-1197. Costs and selling prices. Coconut oil is selling around 8^ to 8| cents, about the same as in 1914. In 1919 the price was 18 or 19 cents. A duty of 2 cents per pound on the raw material would mean more than that on the finished product. Size of industry. Two refining plants, with a capacity of about 900,000 pounds a week when running full. Rates suggested. That coconut oil be put on the free list rather than listed at 2 cents per pound as in paragraph 50. That the duty on linseed oil be not increased over 10 cents a gallon. Reasons : To enable domestic refiners to import and refine oil at a profit. XOTE. See also pages 1161-1174, testimony of Mr. W. M. Hutchinson. PARAGRAPH 50. OLIVE OIL. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Walter V. Vick, representing the Olive Oil Association of America, New York City. FAVORING LOWER DUTIES : The American Chamber of Commerce, Paris, France. (Brief.) REQUESTING Mr. R. U. Delaphena, representing R. U. Delaphena & Co. (Inc.) and La Manna, Azema & Farnan, New York City. Mr. Nathan Musher, president, representing Musher & Co., Baltimore, Md. Hearings : Pages 1235-1239. Witness: Mr. W. V. Vick f representing the Olive Oil Association of America. 78 DIGEST OF TARIFF HEARINGS, H. R. 7456. Size of industry. To-day, $2,500,000 is invested in olive-oil pack- ing: plants. Rates suggested. The association recommends a duty of 20 cents per gallon in bulk and a differential of 10 cents on packed, in order to favor the packing of oil in this country. NOTE. See also pages 1161-1174, testimony of Mr. W. M. Hutchinson. Witness: The American Chamber of Commerce, Paris, France. (Brief; no appearance at hearings.) Rates suggested. Thirty cents per gallon for 5-gallon packages or over; 40 cents per gallon for less than 5-gallon packages. Remarks. The increased duty proposed is for the protection of the California producers, whose output is insignificant compared with domestic needs, and of edible cottonseed and peanut oil dealers, whose product can not compare, either in nutritive value or pharmaceutical properties, with olive oil. . . Hearings : Pages 1228-1231. Witness: Mr. R. U. Delaphena, representing R. U. Delaphena & Co. and others. Costs and selling prices. The cost of 1 gallon of olive oil, packed in the United States, is $2.50, without profit. Owing to a surplus of tin plate, cans are made in Italy and France for one-fourth the price in this country. Latest cabled quotations are $2.25 per gallon, duty paid. Size of industry. One thousand persons work in olive-oil packing factories. Business in 1919 amounted to nearly $2.000,000. Rates suggested. No request as to rates, "but there should be a difference of at least 1^ cents per pound between olive oil imported in bulk and olive oil imported in packages weighing less than 44 pounds. Hearings: Pages 1231-1235. Witness : Mr. N. Musher, representing Musher & Co. Costs and selling prices. Tins, cases, and labor in 1920 cost 80 cents per gallon of oil ; in 1919, 70 cents. Prewar price, $4 a gallon on gallon tins, $2 on half-gallon tins, $1 on quart tins, 50 cents on pint tins, and 25 cents on half-pint tins. Size of industry. The firm imports 1.000,000 gallons a year and has at least $1,000,000 invested in plant and equipment. Rates suggested. A duty of 5^ cents per gallon in bulk, 7i cents in package a differential of 2^ cents between bulk and packed oil. NOTE. See also pages 1161-1174, testimony of Mr. W. M. Hutchinson. PARAGRAPH 50. LINSEED OIL. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. William O. Goodrich, representing the William O. Goolrich Co., Milwaukee, Wis. Hearings : Pages 1223-1227. Costs and setting prices. Table submitted, showing comparative rates of wages in the linseed-oil crushing industrv in the United States, England, Holland, and Germany. A comparison of costs in DIGEST OF TARIFF HEARINGS, H. R. 7456. 79 the larger and better equipped mills in the United States shows an average total cost of 50 cents per bushel of seed crushed. Rates suggested. A rate of 25 cents per gallon on linseed oil, if 30 cents per bushel on foreign seed be maintained. Remarks. A bushel of flaxseed (56 pounds) yields 19 pounds of linseed oil and 37 pounds of linseed-oil cake. PARAGRAPH 50. COTTONSEED OIL. WITNESS, AND INTEREST REPBESENTED. FAVORING LOWER DUTIES : Mr. W. B. Chittenden (statement and brief), representing the Peet Bros. Manufacturing Co.. Kansas City, Kans. Hearings : Pages 1218-1223. Costs and setting prices. The prewar price of cottonseed oil ranged around 4.5 to 6.5 cents per pound. This normal price has prevailed during the greater part of this season 1921. It would appear that a duty of 2 cents per pound on the inferior imported cottonseed oil would put a stop to imports. PARAGRAPH 50. CASTOR OIL. WITNESS, AND INTEREST REPRESENTED. FAVORING LOWER DUTIES : Mr. B. E. Renter, consulting engineer, representing the Bureau of Raw Materials of the Animal and Vegetable Fat Oil Industry ; address, Phila- delphia, Pa. Hearings: Pages 1215-1218. Costs and selling prices. Prior to 1915 the average price of medici- nal castor oil ranged between 8 and 10 cents per pound. At an aver- age of 9 cents the duty of 4| cents in H. R. 7456 would be equal to an ad valorem duty of 50 per cent. Considering the lower value of No. 2 and No. 3 grades of castor oil, this duty can be calculated to run as high as 75 per cent ad valorem. Rates suggested. That castor oil be admitted free of duty or car- ried at the same rate provided in the act of 1913. If the duty of one- half cent per pound on castor beans be retained, the duty of 4J cents per pound on castor oil should be revised to a rate not^higher than 2.} cents per pound. Remarks. The duty on castor beans, H. R. 7456, is 25 cents per bushel and equivalent to 1^ cents per pound on the castor-oil content. The duty of 4^ cents per pound on castor oil gives a differential of 3^ cents per pound in favor of the American crusher. PARAGRAPH 50. EDIBLE OILS. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. A. M. Loomis (statement and brief), representing the National Dairy Union ; address, Washington. D. C. Mr. Frank O'Hara, representing the American Farm Bureau Federation ; address, Washington, D. C. 80 DIGEST OF TARIFF HEARINGS, H. R. 7456. FAVORING PROPOSED OR HIGHER DUTIES Continued. Mr. W. M. Hutchinson (statement and brief), representing the crude cotton- seed-oil tariff committee. Mr. Charles W. Holman, representing the National Milk Producers' Federa- tion and the National Board of Farm Organizations. Public and Private Garbage Reduction Plants, Cleveland, Ohio. (Brief.) FAVORING LOWER DUTIES : Mr. C. Rogers Brown (statement and brief), representing the Bureau of Raw Materials for American Vegetable Oils and Fats Industries; ad- dress, Seattle, Wash. Mr. S. W. Eckmau, representing B. T. Babbitt. Mr. Gilbert Colgate, representing Colgate & Co., New York City. The Port of Seattle, Wash. (Brief.) The N. K. Fairbanks Co., Milwaukee, Wis. (Brief.) Hearings: Pages 1174-1183 Witness: Mr. A. M. Loomis, representing the National Dairy Union. Rates suggested. A duty of 10 cents per pound on this group of edible oils, namely, coconut, cottonseed, soya-bean, and peanut oils. The union asks for a tariff on edible oils equal to that which the com- mittee may decide to put on butter, but is willing to agree to a draw- back for denatured oils and for oils of which it can be shown, to the satisfaction of administering officials, that they are not used for food. Remarks. To allow foreign vegetable oils to continue to enter at the rate of duty provided in paragraph 50 of the present bill would imperil the continuance of a domestic industry which the union thinks indispensible to health and the continuance of agriculture. There is submitted a comparative table of weekly average prices covering butter fat and coconut oil between May 14 arid August 6, 1921. NOTE. See, also, pages 1161-1174, testimony of Mr. W. M. Hutchinson. Hearings : Pages 1183-1186. Witness: Mr. Frank O'Hara, representing the American Farm Bureau Federation. Rates suggested. The federation is in favor of the proposal to levy protective duties on imported vegetable oils competing with American dairy and lard and domestic vegetable oil industries. It recommends a duty of 10 cents per pound on oils used for food and 5 cents per pound for those used for industrial purposes. Hearings: Pages 1161-1174. Witness : Mr. W. M. fiutchinson, representing the Crude Cotton- seed Oil Tariff Committee. Costs and selling prices. The present market price of crude cotton- seed oil is 5-| cents per pound, f. o. b. producing points. Soya-bean oil is the leading competitor and, with cottonseed oil, may be pur- chased on the Pacific coast at 4| cents per pound. ,A table submitted shows domestic production, imports, and exports of the various vege- table oils. Size of industry. There are now more than 800 oil mills, repre- senting an investment of approximately $180.000,000. The average annual production of cotton seed, 1912^918, was about 1,462,000,000 pounds. DIGEST OF TARIFF HEARINGS, H. R. 7456. 81 Rates suggested. A brief submitted by the witness in behalf of oil interests includes the following, all under paragraph 50 : Cents per pound. On coconut oil , 5 On crude peanut oil 5 On refined peanut oil 6 On edible olive oil 5 On nonedible olive oil 4 On crude cottonseed oil 5 On refined cottonseed oil 6 On crude soya-bean oil 5 On refined soya-bean oil 6 On sesame oil : 5 The same interests desire the following duties on the respective oil-bearing materials, otherwise coming into competition with domes- tic cottonseed oil : Cents per pound. On shelled peanuts (par. 757) 4 On unshelled peanuts (par. 757) On palm kernels, nuts, and fruits (par. 757) 3 Remarks. From 75 to 80 per cent of the crude cottonseed oil is used in making lard substitutes and about 5 per cent in the manu- facture of oleomargarine; approximately one-half the remainder is exported, and the balance is absorbed by soap makers for minor uses. Hearings: Pages 5143-5162. Witness : Mr. Charles W. Holman, representing the National Milk Producers' Federation and the National Board of Farm Organiza- tions. Rates suggested. Four cents per pound on cottonseed, coconut, and soya-bean oils and 4 cents per pound on peanut oil. Remarks. It has been brought out by other witnesses that pro- tection is desired against the increasing amounts of oils imported in the past from the Orient, as shown in exhaustive statistical tables appended to the witness's brief. Witness: Public and private garbage-reduction plants, Cleveland, Ohio. (Brief; no appearance at hearings.) Costs and setting prices. The best price now obtainable for gar- bage grease is 1 to 2 cents per pound, as against an average price, for 10 years prior to the war. of 4 cents. Size of industry. Twenty-four plants dispose of city garbage only, and of these 14 are municipally owned and operated. There are sev- eral hundred small privately owned plants. Rates suggested. Two and one-half cents per pound on coconut oil, peanut oil, cottonseed oil, soya-bean oil, nonedible fish oil, and wool grease. Remarks. Unless protection is afforded, garbage-reduction plants will be forced to go out of business because of the influx of foreign vegetable oils ; valuable material will go to waste. Hearings : Pages 1127-1151. Witness : Mr. C. R. Brown, representing the Bureau of Raw Mate- rials, etc. Size of industry. Most of the cottonseed oil from the South is re- fined; an average of 1,130,000,000 pounds passing through refining industry plants is converted into vegetable lard. About 168,000,000 82 DIGEST OF TARIFF HEARINGS, H. R. 7456. pounds goes directly into the soap kettle. The domestic production of pure animal lard is 1,117,000,000 pounds a year, of which 635,000,000 pounds is exported, chiefly to Europe. It is only on account of the vegetable lard that this quantity of the pure article can be exported. Exports of domestic production are as follows : Seap _ $15, 000, 000 Animal lard $150, (KK), 000 Vegetable oils $12, 000, 000 Refined cottonseed oil $37,000,000 Oleomargarine _pounds__ 15, 000. 000 Soya-bean oil * do 47, 000, 000 Paint $25, 000, 000 Rates suggested. The bureau is opposed to a duty on vegetable oils; even 2 cents per pound would be prohibitive. Remarks. If these oils are barred from the United States, there is only one thing that can happen ; instead of coming from Asia into the United States the oils will create competition that can not be eliminated. Hearings : Pages 1272-1279. Witness: Mr. S. W. Eckman, representing B. T. Babbitt. Rates suggested. Soap manufacturers are opposed to the imposi- tion of a tariff on the raw materials of the industry. Remarks. Soap manufacturers do not ask for protection on the finished product, being able to look out for themselves in that respect if raw materials remain on the free list. Hearings : Pages 1279, 1280. Witness : Mr. G. Colgate, representing Colgate & Co. Rates suggested. The witness indorses the testimony of Mr. Eck- man in regard to free vegetable oil and duties on soap. Witness: The Port of Seattle, Seattle, Washington. (Brief; no appearance at hearings.) Remarks. Millions of dollars have been invested in terminal fa- cilities, tanks, etc. at Seattle, to handle oriental vegetable oils; this industry is threatened by 'the proposed tariff on these oils. Witness: The N. K. Fairbanks Co., Milwaukee, Wis. (Brief; no appearance at hearings.) Remarks. As brought out by various witnesses in previous testi- mony, coconut oil is not substitutable for cottonseed oil, and the latter is substitutable, to a limited extent only, for soya bean oil. Other points previously brought out are also substantiated. PARAGRAPH 50. COCONUT OIL. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Barry Mohun, representing the Eldorado Oil Works; address, Wash- ington, D. C. FAVORING LOWER DUTIES: Mr. Louis H. Waltke, representing Win. Waltke & Co., soap manufacturers, St. Louis, Mo. Mr. Vincente Villamin, representing Santa Anna Oil Mills. Manila, P. I. Mr. Francis M. Turner, representing the American Nut & Seed Oil Cor- poration. Mr. F. N. Barnes (statement and brief), representing Procter & Gamble Co., Cincinnati, Ohio. DIGEST OF TARIFF HEARINGS, H. R. 7456. 83 REQUESTING RECLASSIFICATION : Mr. George T. Pierie, president (statement and brief), representing the Gorgas-Pierie Co., Philadelphia, Pa. ; C. F. Simonin's Sons, Philadelphia, Pa. ; the Oil Seeds Co., New York City. Hearings: Pages 1186-1194. Witness : Mr. B. Mohun, representing the Eldorado Oil Works. Size of industry. The company has an investment of more than $1,000,000 and is engaged in the coconut-oil industry; on the Pacific coast, 30 concerns, with a total capital of $10,000,000. Rates suggested. That after the words " coconut oil," appearing in line 15, page 17 (H. R. 7456), the words "including coconut oil imported from the Philippine Islands " be added. Hearings : Page 1208. Witness : Mr. L. H. Waltke, representing Wm. Waltke & Co. Rates suggested. The firm produces so-called cold-process toilet soap, calling for a high grade of coconut oil. As the oils produced in the Philippines and this country are not suitable for the purpose, the witness objects to a duty of 2 cents a pound on the fine material imported from Java, Cochin, and Ceylon. Hearings: Pages 1208-1211. Witness: Mr. v. Villamin, representing Santa Anna Oil Mills. Rates suggested. That coconut oil be retained on the free list. Remarks. The witness points out that, in 1919. 75 per cent of the coconut oil consumed in the United States came from the Philippine Islands. Hearings : Pages 1211-1214. Witness : Mr. F. M. Turner, representing the American Nut & Seed Oil Corporation. Size of industry. The company -employs about 150 men in its crushing plant. Rates suggested. Is in favor of allowing things to remain as they are and does not object to the Philippine oils coming in duty free. Remarks. Soap manufacturers use Manila or Philippine coconut oil and though the proportion in the soap varies with each manufac- turer it is very small. Philippine oil would come in free under the present bill.' Hearings: Pages 1197-1208. Witness : Mr. F. N. Barnes, representing Procter & Gamble Co. Costs and selling prices. The cost of raw materials entering into the production of soap is a much more important item than the cost of labor, unskilled to a large extent. According to the latest data available from the Bureau of Census, the establishments engaged in the manufacture of soap paid during the year 1914 the sum of $88,- 866,786 for the raw materials required in the manufacture of soap, while they paid for both salaries and wages the sum of $14,779,629, or a ratio of 6 to 1. Rates suggested. That coconut oil be retained on the free list. Remarks. The witness thinks his company has the largest copra- crushing plant in the United States and does not feel the need of pro- tection. An increase of 2 cents per pound in the price of any oil used in the manufacture of soap would increase the cost of soap to the consumer by one-half cent per pound for ordinary laundry soap. 84 DIGEST OF TARIFF HEARINGS, H. R. 7456. From one-half to two-thirds of the importations of coconut oil is used by soap manufacturers. A table presented shows the percentage of various vegetable oils consumed by the soap industry, 1912-1917. Another gives the consumption of coconut oil by industries, showing that more than one-half of the coconut oil consumed in 1918 went into the manufacture of soaps. Hearings: 1261-1272. Witness : Mr. G. T. Pierie, representing the Gorgas-Pierie Co. and others. Costs and selling prices: It costs the American miller $8 to crush one ton of 2,240 pounds of copra. In Java and the Philippines the cost of crushing is $3. Freight on oil from Java and the Philippines to the Atlantic ports is $9 a ton, and on copra $16.80 per ton. Size of industry. Upward of $15,000,000 invested in buildings and equipment, the total investment being $30,000,000 to $35,000,000. Total crushing capacity at least 400,000 tons of copra and palm ker- nels per annum. Rates suggested. That coconut oil be retained dutiable at 2 cents per pound and that palm-kernel oil be transferred from paragraph 1626, free list, to paragraph 50 in order to maintain the oil-crushing industry in the United States. It is further requested that the same duty be applied to coconut oil from the Philippines or, at least, that a limit be put on duty-free importations from the Philippines or, alternatively, that an export duty be levied in the Philippines. It is also requested that copra and palm kernels be maintained on the free list under paragraph 1620. See also pages 1161-1174, testimony of Mr. W. H. Hutchinson and the following summary of letter from Lightfoot Co. Remarks. In a letter dated August 26, 1921, addressed to the chairman of the Senate Finance Committee, the Lightfoot Schultz Co., manufacturers of shaving and toilet soaps, 1412-1424 Park Ave- nue, Hoboken, N. J., takes exception to certain testimony given at these hearings. Objection is expressed to statements made by Mr. George T. Pierie on August 16, imputing selfish motives to representatives of foreign oil crushers and others in opposing duties on oils while acquiescing in duties on soap, margarine, paint, and varnish. The letter points out that soap makers voluntarily recommended, before the Committee on Ways and Means, that no increase in the present 5 per cent duty on soap be made, providing no duty were placed on the raw materials. The position of the protesting company has been, and still is, based on the ground that the industry depends on free raw materials. The company deprecates any attempt to minimize the importance of that principle to American soap manufacturers. PARAGRAPH 50. PEANUT OIL,. WITNESSES, AND INTERESTS EEPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. M. M. Osborne (statement and brief), representing the United Peanut Association, Suffolk, Va. FAVORING LOWER DUTIES : Mr. John B. Gordon, representing the Bureau of Raw Materials (users of oils, etc.). . DIGEST OF TARIFF HEARINGS, H. R. 1456. 85 Hearings: Pages 1249-1260. Witness : Mr. M. M. Osborne, representing the United Peanut As- sociation. Costs and selling prices. The emergency tariff bill has increased the price of peanut oil to 7^ to 8 cents per pound, an increase of from 1 to 1 cents. Mills are now paying farmers about $60 a ton for pea- nuts for crushing. Size of industry. A total of 1,200,000 acres of land is devoted to the growing of peanuts. At $70 per acre, this represents a land value of $88,362,000. The number of persons employed in mills, in shelling, cleaning, and pressing, is 10,500, and the value of equip- ment of peanut mills (crushing machinery, etc.) amounts to $11,- 500,000. Rates suggested. A duty of 5 cents per pound on crude peanut oil and 6 cents on the refined, and inasmuch as cottonseed oil and other vegetable oils, such as soya-bean oil, come in competition with peanut oil, the same duties on those products. Remarks. Tables submitted show production, imports, and ex- ports of peanut oil, and capital invested in the various branches of the industry. NOTE. See also pages 1161-1174, testimony of Mr. W. M. Hutchinson. Hearings : Pages 1239-1249. Witness: Mr. J. B. Gordon, representing the Bureau of Raw Materials. Costs and selling prices. Cost of crushing peanuts is between 6 and 7 per cent of the total cost of oil, of which 75 to 80 gallons are obtained from a ton of peanuts. A table submitted shows cost of transporting oriental peanut oil from Tsing Tau, China, to the Cincinnati district, as $2.46 per 100 pounds, as against 31 cents for transportation of domestic oil from southern points to the same dis- trict. The price of domestic peanut oil, f. o. b. mills, decreased from 7.34 cents per pound in January, 1921, to 5.62 cents in April and rose to 6.65 cents per pound in July of that year. During the same- period, prices of oriental peanut oil, c. i. f. Seattle, decreased from 7.92 per pound in January to 6.48 in April and then rose to 7.90 cents per pound in June and July. Rates suggested. Opposes duty on peanut oil; requests at least a reduction of duty from 6 to 3 cents per gallon or 40 cents per 100 pounds. Remarks. The domestic production of peanuts increased simul- taneously with prices of both grades of peanuts, a matter of 100 per cent, showing that importations of foreign peanut oil had no inhibi- tive effect upon the domestic peanut-oil business. The bulk of the domestic crop was sold to the nut trade during the war. The dif- ferential between peanut and cottonseed oils is rarely more than one-eighth or one-fourth cent per pound. NOTE. see also pages 1161-1172, testimony of Mr. W. M. Hutchinson. PARAGRAPH 50. RAPESEED OIL. WITNESS. FAVOEING LOWER DUTIES : The Vacuum Oil Co., 61 Broadway, New York City. (Brief; no appearance at hearings.) 7713422 7 86 DIGEST OF TARIFF HEARINGS, H. R. 7456. Size of industry. The annual domestic consumption of rapesqed oil is about 22,000,000 pounds, of which only 137,000 pounds, or from | to 1 per cent, is produced in the United States. This is of inferior quality, unsuitable for lubricating oils. The Vacuum Oil Co. uses from one-third to one-half of all rapeseed oil used in the United States as a raw material in compounding lubricating oils. Rates suggested. Not to exceed 6 cents per gallon. Remarks. The proposed duty of 1 cents per pound represents 111 to 114 cents per gallon, or an increase of 87 to 90 per cent over the act of 1913. Under the low rates of the latter act, both imports and revenue increased as compared with those under the Payne- Aldrich Act. PARAGRAPH 51. ALJZARIN ASSISTANT. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Frank C. Marsh (by letter), representing the Baker Castor Oil Co., New York City. The 'Providence Drysalters Co., Providence, R. I. (Brief.) REQUESTING RECLASSIFICATION : Mr. C. P. Gulick (statement and brief), representing the National Oil Prod- ucts Co. and others ; address, Newark, N. J. Hearings : Page 1260. Witness : Mr. F. C. Marsh, representing the Baker Castor Oil Co. Rates suggested. That the, duty on alizarin assistant be increased from 25 to 50 per cent ad valorem. Remarks. This duty is requested in order to harmonize with the duty on castor oil. The usual grades of alizarin assistant imported contain from 50 to 75 per cent of castor oil, which is proposed to be made dutiable at 4 cents per pound, equivalent to a protection of 33 per cent on the present ratio of the castor oil abroad, as against a duty of 25 per cent proposed on the finished product alizarin assistant. Witness: The Providence Drysalters Co., Providence, R. I. (Brief; no appearance at hearings.) Rates suggested. Fifty per cent ad valorem on sulphonated castor oils containing 50 per cent of castor oil ; 75 per cent ad valorem on sulphonated oils containing more than 50 per cent of castor oil. Remarks. The above rate on sulphonated oils is desired to equalize the duty on the castor oil contained therein with the proposed 4| cent per pound duty on raw castor oil, and thus enable manufacturers to compete with imported sulphonated oils made from duty-free castor oil. Hearings : Pages 1151-1161. Witness : Mr. C. P. Gulick, representing the National Oil Products Co. and others. Rates suggested. The witness calls attention to the discrepancy between the duty of 25 per cent on alizarin assistant and 4J cents per pound on raw castor oil. Quoting market values for the past 10 or 15 years, with the exception of a short interval during the war, the nor- mal value of castor oil was shown to be about 9 cents per pound, so that DIGEST OF TARIFF HEARINGS, H. R. 7456. 87 4J cents per pound is equivalent to 50 per cent of its value. If the tariff on castor oil (par. 50) were proportionate to the duty on castor beans, the 25 per cent ad valorem now applied to sulphonated castor oil (alizarin assistant) would be ample, because the duty on castor oil would then not be more than 1J or 2 cents per pound. PARAGRAPH 54. LEMON, ORANGE, LIME, AND GRAPEFRUIT OILS. (See also par. 1, p. 40.) WITNESSES. FAVORING LOWEB DUTIES : Ungerer & Co., New York. (Brief.) Foote & Jenks. Jackson, Mich. (Brief.) The Flavoring Extract Manufacturers of the United States, Baltimore, Md. (Brief.) Witness: Ungerer & Co., New York City. (Brief; no appearance at hearings.) Remarks. The domestic production of orange and lemon oils is imaginary ; a 20 per cent duty would be a burdensome imposition on the American consumer. Rather protect oils, such as ylang-ylang, produced in quantity in the United States and its dependencies against foreign competition. Witness : Foote & Jenks, Jackson, Mich. (Brief : No appearance at hearings.) Rates suggested. Ten per cent ad valorem on all citrus oils, and not more than 5 per cent additional on all other essential or dis- tilled oils not specially provided for. Remarks. The above oils all fall into one class and should there- fore receive uniform tariff treatment. They are all citrus oils needed in the country's industries, and all, of necessity, imported. Witness: The Flavoring Extract Manufacturers of the United States, Baltimore. Md. (Brief; no appearance at hearings.) Rates suggested. Not more than 10 per cent ad valorem on all citrus oils (lemon, orange, lime, grapefruit). Remarks. These articles are all noncompetitive with American products except, to a limited extent, oil of lemon and oil of orange. The extract manufacturers have also to pay an internal revenue tax of $2.20 per gallon, amounting to from 40 per cent to 90 per cent by volume of the finished product. PARAGRAPH 55. COCAINE. WITNESS, AND INTERESTS REPRESENTED. REQUESTING RECLASSIFICATION : Dr. Frederick W. Russe, representing the Powers-Weightman-Rosengarten Co. and the Mallinckrodt Chemical Works, Philadelphia, Pa. Hearings : Pages 835-838. Rates suggested. That the internal tax be eliminated or the duty on cocaine increased from $2 to $3.50 per pound. Remarks. Under the present adjustment of rates between coca leaves, the raw material, and cocaine extracted therefrom, the rate is 88 DIGEST OF TARIFF HEARINGS, H. R. 7456. higher on the raw material than on the finished product. It requires 10 pounds of coca leaves to make 1 ounce of cocaine ; the duty at 10 cents per pound on 10 pounds of coca leaves amounts to $1, while the internal-revenue tax of 1 cent per ounce on 10 pounds of imported coca leaves amounts to $1.60, making a total duty of $2.60 ; per ounce of cocaine which can be obtained. No coca leaves are grown in the United States. PARAGRAPH 56. SAFROL. WITNESS, AND INTEREST REPRESENTED. FAVORING LOWER DUTIES: Mr. John F. Queeny, representing the Monsanto Chemical Works, St. Louis, Mo. Hearings: Pages 885-901. Rates suggested. Safrol to be placed on the free list, as it is the raw material required in the manufacture of heliotropine, largely used by perfumers. PARAGRAPH 56. PERFUME MATERIAL. WITNESS. FAVORING LOWER DUTIES : Ungerer & Co., New York City. (Brief; no appearance at hearings.) Remarks. While the duties in paragraph 57, on finished perfumes, remain the same, the duties in paragraph 56 on unmixed perfume materials have been raised from 20 per cent to 35 per cent ad valorem, and on mixed perfume materials from 20 per cent to 40 cents per pound and 40 per cent ad valorem ; finished perfumes in paragraph 57 retain the same rate of duty. This results in increasing the cost of many important perfume materials without giving compensatory duty on competition from finished perfumes. Adjustment of this in- consistency is desired. PARAGRAPH 56. ARTIFICIAL OIL OF MUSTARD. WITNESS. FAVORING PROPOSED OR HIGHER DUTIES : The Central Specialty Co., Kansas City, Mo. (Brief; no appearance at hearings.) Costs and selling prices. When we began to manufacture we sold the product at $26 per pound ; the price on the market to-day is $4 to $4.25 per pound. Size of the industry. Our output is 150 pounds per day and we can increase this 50 per cent if occasion require. We have now a reserve supply of 3,500 pounds. The annual consumption in the United States is less than 20,000 pounds. Rates suggested. That a provision be inserted in paragraph 56, covering artificial oil of mustard, chemically known as " allylisothio- cyanate," and other compounds of allyl at a duty of $3 per pound. DIGEST OF TARIFF HEARINGS, H. R. 7456. 89 PARAGRAPH 59. PARIS GREEN. WITNESS, AND INTERESTS BEPBESENTED. REQUESTING RECXASSIFICATION : Mr. A. S. Somers, representing dry-color manufacturers ; address 100 Wil- liam Street, New York. Hearings: Pages 1011-1019. Rates suggested. The discrepancy between the rate of 25 per cent on arsenic (par. 1) and 15 per cent on Paris green should be adjusted. ttetnarks. Mr. Somers stated before the Ways and Means Com- mittee that 15 per cent (American valuation) on Paris green would be satisfactory, but this was predicated on the theory that arsenic, its chief component material, would remain on the free list. (About 75 per cent of arsenic in Paris green.) PARAGRAPH 60. PHOSPHORUS. WITNESS, AND INTEBEST BEPBESENTED. FAVOBING PROPOSED OB HIGHEB DUTIES : Mr. Charles W. Asbury, representing the American Phosphorus Co., Phila- delphia, Pa. Hearings : Pages 1283-1286. Costs and selling prices. The firm's average cost of production is 38 cents per pound. Yellow phosphorus costs about 31 cents and the red about 40 cents per pound; sesquisulphide of phosphorus costs about 35 cents per pound. Size of industry. The American consumption in peace time is a little more than 1,000,000 pounds a year. The firm makes about 400,000 pounds when running, but the plant has been closed down entirely since November, 1920. Rates suggested. The duty should be not less than 15 cents per pound. PARAGRAPHS 60 AND 75. PHOSPHORUS AND CHLORATE or POTASH. WITNESS, AND INTEBEST BEPBESENTED. FAVORING LOWER DUTIES : Mr. W. A. Becker, representing the Diamond Match Co., New York City. Hearings : Pages 1280-1283. Costs and selling prices. The firm has found that phosphorus can be made for 20 cents a pound. It " is probably selling as high as 30 to 35 cents a pound." Rates suggested. That duty on phosphorus be cut down from 10 to at most 5 cents per pound and that the duty on chlorate of pot- ash be reduced. Reason: To assist domestic match manufacturers in meeting the competition of foreign matches. PARAGRAPH 62. ARTISTS' COLORS. WITNESSES. FAVORING PROPOSED OR HIGHEB DUTIES : The Devoe & Reynolds Co., New York City. The Milton Bradley Co., Springfield, Mass. The Kroma Color Co., Sandusky, Ohio. (Joint brief; no appearance at hearings.) 90 DIGEST OF TARIFF HEARINGS, H. R. 7456. Costs and selling prices. Imported colors are now selling for less than the American manufacturer has to pay for empty boxes and tubes. Size of industry. Capital directly employed about $1,000,000; in- directly, several millions. Number of employees affected, directly, 500 to 700; indirectly, 1,500 to 2,000. Prior to the war, Germany, England, and France had a monopoly on artists' color sales in this country. The domestic industry has since been developed and should be protected. Rates suggested. Sixty per cent ad valorem. PARAGRAPH 64. BARYTES AND BARIUM. (See also par. 11, p. 51.) WITNESS, AND INTEREST EEPEESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Hon. M. E. Rhodes, Congressman from Missouri, representing barytes miners of Missouri. FAVORING LOWER DUTIES : L. A. Salomon & Bro., New York City. (Brief.) Hearings : Pages 874-882. Witness: Hon. M. E. Ehodes. Costs and selling prices. The cost of producing this ore and load- ing it on the car runs from $8 to $11; adding freight of from $8 to $10 necessitates a price of from $20 to $21 per ton at the Atlantic seaboard market. The German importer i selling to-day for $9 or less per ton. Size of industry. The American production of crude ore, prior to the war, was from 30,000 to 89.000 tons annually, with an annual im- portation of from 10,000 to 35,000 tons. Tons. 1916, domestic production 221,952 1917, domestic production 207, 888 1918, domestic production 155, 368 Rates suggested. A specific duty of one-half cent per pound on barytes ore, instead of $4 per ton, and three-fourths cent per pound on manufactured or ground barytes, instead of $7.50 per ton. Blanc fixe should be transferred from paragraph 64 to paragraph 11 at a duty of 2 cents per pound, and lithopone from paragraph 74 to para- graph 11 at a duty of 2-| cents per pound. These rates are requested in order to enable producers to compete with German importers. Witness: L. A. Salomon & Bro., New York City. (Brief; no ap- pearance at hearings.) Rates suggested. Crude barytes, $2.50 per ton; manufactured or powdered barytes, $5 per ton. Remarks. Imports of German barytes have not been large. The production of domestic barytes has been increasing and the indus- try is able to take care of itself, especially since the opening of mines in the Southern States, nearer the consuming market. DIGEST OF TARIFF HEARINGS, H. R. 7456. 91 PARAGRAPH 66. BONE BLACK, DECOLORIZING AND DEODORIZING CHARS. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. John Bernard Kreider, representing the Delaware River Chemical Works. (Brief.) The Darco Corporation, Wilmington, Del. (Brief.) FAVORING LOWER DUTIES : Mr. Charles B. Grimes (statement and brief), representing Pomeroy & Fisher, New York City. Hearings : Pages 1288, 1289. Witness : Mr. J. B. Kreider, representing the Delaware River Chemical Works. Rates suggested. In addition to the rate of 20 per cent ad valorem provided in H. R. 7456, it is urged that a remedy be devised and ap- plied to prevent the abnormally low rates of international exchange, although if the rate be based on American valuation this exchange difference would be appreciably offset. Remarks. Bone black and bone char, used in refining cane sugar, are found to add only an infinitesimal expense to the refining cost; that is to say, nineteen thousandths of 1 cent per pound of refined sugar. Witness: The Darco Corporation, Wilmington, Del. (Brief; no appearance at hearings.) Costs and selling prices. Imported decolorizing carbons are now being sold at $600 to $800 per ton, and bone black and bone char at about $200 per ton. S-ize of industry. This concern has recently spent about $300,000 in development work and contemplates the expenditure of $1,000,000 on a new plant. Rates suggested. A special paragraph placing a duty of 5 cents per pound on decolorizing, refining, and gas absorbing carbons. Hearings : Pages 1290-1295. Witness : Mr. C. B. Grimes, representing Pomeroy & Fisher. Costs and selling prices. While the market is now 6 cents, quota- tions from abroad indicate that, with the 20 per cent. proposed, it would cost from $155 to $160 to land a ton of material, against the English price of $120. The firm is now selling around $75 a ton. At the end of the war domestic prices were 14 cents a pound or $280 a ton. Rates suggested. Bone black or bone char, used for decolorizing purposes, to be put on the free list. It is now dutiable at 20 per cent under paragraph 66. PARAGRAPH 68. LAMPBLACK. WITNESS. FAVORING PROPOSED OR HIGHER DUTIES : The Wilckes-Martin-Wilckes Co., New York City. (Brief; no appearance at hearings.) Costs and selling prices. German lampblack is now being sold in New York for 2 cents per pound, including container. 92 DIGEST OF TARIFF HEARINGS, H. R. 7456. Rates suggested. Sixty per cent ad valorem. Remarks. Cheap German imports make it absolutely impossible to manufacture lampblack at a profit. PARAGRAPH 70. IRON OXIDE PIGMENTS. WITNESSES, AND INTERESTS REPRESENTED. REQUESTING RECLASSIFICATION : Mr. C. K. Williams, representing C. K. Williams & Co., Easton, Pa. FAVORING LOWER DUTIES : Reichard-Coulston (Inc.), New York City. (Brief.) Hearings : Pages 1286-1288. Witness: Mr. C. K. Williams. Costs and selling prices. Umbers and siennas cost around three- fourths of 1 cent a pound and the domestic labor cost is three times that in Italy. Rates suggested. Oxide of iron, a pigment, is under paragraph 70. Would have it transferred from paragraph 70 to paragraph 63 or change the rate from 20 to 25 per cent under paragraph 70. Would reduce rate on " ochers, siennas, and umbers, crude or not ground," from one-fourth of 1 cent to one-eighth of 1 cent per pound, so as to reestablish a differential of one-fourth of 1 cent between the manu- factured and the crude. Witness: Reichard-Coulston (Inc.), New York City. (Brief; no appearance at hearings.) Costs and selling prices. Domestic umber sells at | to 1 cent per pound cheaper than the imported material , and domestic sienna sells at 3 to 10 cents cheaper. Rates suggested. Crude umbers and siennas, free. Remarks. As the production of these articles in the United States is small, and the quality of an inferior character, there is no competition with imported goods. Free crude materials are desired to give the American crusher an opportunity to compete against the European crusher. The Italians at present bring in about 90 per cent of the imported powdered umber. PARAGRAPHS 74 AND 88 ; ALSO PARAGRAPHS 390 AND 391 OF SCHEDULE 3. ZINC OXIDE. (See also par. 390, p. 242.) WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Stephen S. Tuthill, secretary, representing the American Zinc Institute, embracing 95 per cent of the United States zinc industry'; address, New York City. Hearings : Pages 1295-1297. Costs and selling prices. The process and cost of making zinc oxide are the same as in the case of slab zinc. Rates suggested. Rates on zinc compounds to be higher than the rates on zinc and zinc oxide, and zinc oxide to have the same duty as slab zinc, at least 2 cents a pound. The witness pointed out that the zinc schedule is not carried out on the same basis as the lead DIGEST OF TARIFF HEARINGS, H. R. 7456. 93 schedule ; in the latter, lead compounds are dutiable at a higher rate on the manufactured products than on the ore itself. Remarks, It was stated that oxide of zinc had been previously classified under Schedule A, but that it would properly come under Schedule C. PARAGRAPH 75. POTASSIUM CHLORATE. (See also par. 60, p. 89.) WITNESS, AND INTEREST REPRESENTED. FAVORING LOWER DUTIES : Mr. Frank Kidde, representing the Monmouth Chemical Co., Paterson, N. J. Hearings: Pages 1297-1311. Costs and selling pri.ces. The price of the German product is about 7 cents per pound, as against 8 cents for the domestic product. Size of industry. Forty employees ; producing 10 per cent of the total domestic output. There are two other domestic manufacturers the North American Chemical Co., at Bay City, Mich., and the National Electrolytic Co., at Niagara Falls, N. Y. Rates suggested The duty should not be more than 1 cent per pound. Remarks. The witness stated that, prior to the war. an inter- national agreement existed in regard to the sale of potassium chlo- rate ; also that the other two American manufacturers sell to a com- mon agency, J. L. and D. S. Riker, of New York City, and' that the United Alkali Co., of England, owns the North American Chemical Co. PARAGRAPH 75 CAUSTIC POTASH. FAVORING PROPOSED OR HIGHER DUTIES : The Niagara Alkali Co., Niagara Falls, N. Y. (Brief; no appearance at hearings.) Costs and selling prices. Present quotations for German caustic potash are 5 cents per pound and for domestic 12 cents per pound. Rates suggested. Five cents per pound plus twice the duty on muriate of potash. Remarks. It requires two pounds of muriate to make one pound of caustic potash. The rate on caustic potash, proposed in H. R. 7456, is not enough to compensate for the duty on muriate of potash. As present prices show, the domestic industry can not continue with- out increased protection. PARAGRAPH 77. SOAP. WITNESS, AND INTEREST REPRESENTED. FAVORING LOWER DUTIES : Mr. S. W. Eckman, representing B. T. Babbitt. Hearings : Pages 1272-1277. Rates suggested That vegetable oils be put on the free list. If this recommendation be adopted, would suggest that the duty on 94 DIGEST OF TARIFF HEARINGS, H. R. 7456. laundry soap, soap powder, and other kinds of soap, n. s. p. f., be reduced to 5 per cent, the rate provided in the act of 1913. PARAGRAPH 78. SALT. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Edward W. Brown, representing the Sterling Salt Co., New York City. Mr. W. T. Chisholm, representing the International Salt Co., Scranton, Pa. Mr. F. W. Boyer, representing the Wadsworth Salt Co., Wadsworth, Ohio. FAVORING LOWER DUTIES : Charles Kurz & Co. (Inc.), Philadelphia, Pa. (Brief.) Hearings : Pages 1324-1330. Witness : Mr. E. W. Brown, representing the Sterling Salt Co. Costs and selling prices. The wages paid in the company's salt mines are 40 to 50 cents per hour (average underground labor $5 a day), against 75 cents a day in Germany. Five hundred men are employed in this domestic industry. Rock salt costs approximately $3 a ton to produce, and an American salt mine costs about $2,000,000 to equip. German rock salt is offered at $6 a ton at Atlantic ports, one quota- tion being made at $5.40. The American selling price in single car- load lots is about $11 a ton. Large buyers on contract pay about $3 a ton less, or $8 a ton. Salt from Avery Island via New Orleans to New York costs $6.40 a ton in New York. Rates suggested. Twenty-five cents per 100 pounds is necessary, or would suggest a specific rate of 15 'cents per 100 pounds plus an ad valorem of 20 per cent, American valuation basis. Hearings : Pages 1311-1324. Witness : Mr. W. T. Chisholm, representing the International Salt Co. and salt producers of the United States. Costs and selling prices. Foreign rock salt, nonedible, is offered in bulk at Atlantic ports at 29 cents per 100 pounds; in 100-pound bags at 50 cents. Rates suggested. Twenty-five cents per 100 pounds, with a pro- viso that the coverings, i. e., the bag, sack, barrel, package, or other container, pay the same rate of duty as if imported separately; as an alternative, an import duty of 25 cents per 100 pounds on coarse or rock salt, coming in bulk or in large containers, in 100 or 200 pound bags, and 35 cents per 100 pounds on fine, ground, pulverized or refined salt in similar containers. Hearings: Pages 1330-1332. Witness : Mr. F. W. Boyer, representing the Wadsworth Salt Co. Costs and selling prices. Including freight, etc., $16.60 per ton. German salt, delivered at the same point, $8.15 per ton a difference of $8.45 per ton. A German salt maker has proposed to an American salt maker to deliver his product at the ports along the Atlantic coast, the latter to designate the names of the ports, at practically the cost of transportation from the central territory to those ports. Letter produced. Rates suggested. A duty so high that this arrangement could not be carried out. DIGEST OF TARIFF HEARINGS, H. R. 7456. 95 Witness: Charles Kurz & Co. (Inc.), Philadelphia, Pa. (Brief; no appearance at hearings.) Rates suggested. Free. Remarks. It is practically impossible to find a domestic market for imported salt outside of the Atlantic seaports. With the risk of exchange and ocean freight fluctuations, and the necessity for the importer to have storage facilities in this country, foreign salt can not come into competition with the domestic product where an in- terior freight haul is necessary. PARAGRAPH 78 SODIUM BICARBONATE. WITNESS. FAVORING LOWER DUTIES : The Jacques Manufacturing Co., Chicago, 111. (Brief; no appearance at hearings. ) Costs and selling prices. The prewar selling price was less than 1 cent per pound. Size of industry. In 1920 the domestic production was 188,906 tons, of which 10.321 tons were exported. The average imports for the last 10 years have been only 42 tons. The price has doubled since 1916. Rates suggested. One-fourth of 1 cent per pound. Remarks. Soda ash, made by heating bicarbonate of soda, is to be dutiable under H. R. 7456 at only one-foiirth cent per pound, and its price is about the same as bicarbonate. Caustic soda, made from soda ash, is to be dutiable at one-half cent per pound, and its value is about double that of bicarbonate. It is obvious, therefore, that the duty on bicarbonate is disproportionately high, and should be lowered. As the low rate of the act of 1913 encouraged scarcely any imports of bicarbonate, a continuation of these rates is not likely to bring about any considerable increase. PARAGRAPH 78. NITRITE OF SODA. FAVORING PROPOSED OR HIGHER DUTIES: Hon. Wesley L. Jones, Senator from Washington. Hearings: Pages 5176-5178. Costs and selling prices. The prewar annual consumption was about 3,000 tons, valued at $120 per ton. The demand increased rap- idly during the war and present annual needs are estimated at about 6,000 tons. The maximum price reached was 60 cents per pound. At present, German sodium nitrite is selling in New York for 6 cents per pound spot. Rates suggested. Five cents per pound. Remarks. Unless adequate protection is afforded, the American Nitrogen Products Co., of Seattle, Wash., operating a nitrogen fixa- tion plant, will not be^ able to continue, nor will it be able to expand the industry by utilizing cheap western electric power in the manu- facture of other nitrogen fixation products. 96 DIGEST OF TARIFF HEARINGS, H. R. 7456. PARAGRAPH 79. HYDROSULPHITES AND SULPHOXYLATES. WITNESS. * FAVORING PROPOSED OR HIGHER DUTIES : The Rohm & Haas Co. (Inc.), Philadelphia, Pa. (Brief; no appearance at hearings.) Costs and selling prices. This concern, the pioneer manufacturer in the United States when European imports were cut off, has re- duced its selling price from $1.50 to 40 cents per pound, but each re- duction has been met by a greater one on the imported product. Kates suggested. Same as in H. R. 7456. Remarks. These products are essential in the textile industry, and for the manufacture of salvarsan. (NOTE. See also hearings before Ways and Means Committee, pp. 103-105.) PARAGRAPH 80. WHEAT STARCH. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. G. J. Jenks, representing the Huron Milling Co., Harbor Beach, Mich. Hearings : Pages 1334-1337. Costs and selling prices. During the war the Japanese began the manufacture of wheat starch, and their price this year has been 2 cents per pound below the domestic. Susuki & Co., of New York, quoted wheat starch at $5.85 per 100 pounds; the company's price at that time was $7.25 per 100, and the cost, roughly, $8.75 per 100 pounds. Rates suggested. A duty of 1 cents per pound, the same as on potato starch. PARAGRAPH 84. THORIUM, CERIUM SALTS, GAS MANTLE SCRAP. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Joseph M. Sherburne, representing Lindsay Light Co., Chicago, 111. Mr. Sidney Mason, representing the Welsbach Co., Gloucester City, N. J. (Brief; no appearance at hearings.) Hearings : Pages 1341-1344. Witness : Mr. Joseph M. Sherburne. Costs and selling prices. The present price of imported thorium nitrate is $2.73 per pound, duty paid, f. o. b. New York, and the present market price of thorium nitrate made in the United States is $3.75 per pound. This represents a decrease in selling price during the last five years of more than 53 per cent and an increase over the importer's 1914 price, which was $3.30 per pound, of less than 14 per cent. Rates suggested. Fifty per cent ad valorem on American valua- tion. Witness : Mr. Sidney Mason, representing the Welsbach Co. Costs and selling prices. The price of thorium, the basic material of the gas-mantle industry, is $3.75 per pound, which is 10 per cent DIGEST OF TARIFF HEARINGS, H. R. 7456. 97 above the prewar price established in this market by the German trust. The German price is $2 plus the 25 per cent duty, or $2.50 duty paid, New York. That is 33^ per cent below the American price. The proposed duty, 25 per cent on American valuation, would make a duty of 94 cents and raise the price to $2.94, which is still 22 per cent below the American price. The present entry price of German thorium is equivalent to 400 marks as against 8 marks prewar. With this difference, it is clear that the Germans can sell in the American market below their present selling price. In granting 45 per cent, owing to the reduction on free sand and to the probable reduction on other material costs, the American manufacturer may sell at $3.50 per pound. The German product would then enter at $3.575. The difference between the price of $3.50 and the present German price of $2.73 would be equiva- lent to about one-fourth of a cent on each gas mantle. Size of industry. There are three manufacturers of thorium in the United States. One factory is totally closed, one is cleaning up, and one claims to be working on a 25 per cent basis. Rates suggested. Forty-five per cent ad valorem. Remarks. The commercial source of thorium is monazite sand. The latter is on the free list, but under the act of 1913 it was dutiable at 25 per cent. The proposed change to the free list would reduce the manufacturing cost of nitrate of thorium 9^ to 10 cents per pound, or one-thirtieth of 1 cent of the cost of thorium in gas mantles. PARAGRAPH 85. TIN CHLORIDES. In a letter addressed to the chairman of the Senate Committee on Finance, on July 28, 1921, the Metal & Thermit Corporation, 120 Broadway, New York City, directs attention to the proposed 20 per cent ad valorem duty on tin chlorides. As large manufacturers of these products, the company regards that duty as insufficient to meet the competition of foreign manufacturers and believes that a duty of at least 40 per cent is necessary. Confining present observations to tetrachloride of tin, as typical of conditions, it is pointed out that here, as abroad, all tin chlorides are produced by the action of chlorine gas on tin-plate scrap or clippings, 81 pounds of gas being required to produce 100 pounds of tetrachloride. The present cost of this chlorine gas is something over 4 cents per pound, or $3.25 for 81 pounds. Adding labor costs, amounting to $4.37, the American production cost of 100 pounds of tetrachloride of tin is shown to be $7.62. As contrasted with these figures, it is stated that the cost of the chlorine gas to German manufacturers is only 96 cents, taking the mark at 1.3 cents. Adding labor costs, $1.06, the total German cost is $2.02, as against the American company's $7.62, cited above. In other words, German manufacturers can produce at a cost of at least 5| cents per pound cheaper than is possible here. The proposed 20 per cent duty would amount to only 3.6 cents per pound, so that a duty of 40 per cent would appear to be necessary if adequate pro- tection is to be afforded. Stress is laid upon the importance of tetrachloride of tin in peace and in war in the former case in silk dyeing, and in the latter for the manufacture of poisonous gases, and for other uses. 98 DIGEST OF TARIFF HEARINGS, H. R. 7456. In a further letter, dated August 13, 1921. the company states that the price of tin and chlorides is no longer 50 to 100 per cent above prewar prices, as stated in " Tariff Information Surveys," but is now considerably lower than prewar rates. Tin is now selling at 26 to 27 cents per pound, as compared with 40 to 45 cents the average price for a number of years before the war. PARAGRAPH 86. TITANIUM POTASSIUM OXALATE. WITNESS. FAVORING PROPOSED OR HIGHER DUTIES : The Rohm & Haas Co. (Inc.), Philadelphia, Pa. (Brief; no appearance at hearings.) Costs and selling prices. The price of this article was reduced by this concern from $1.80 to 60 cents per pound in January, 1921. The imported material is being offered to jobbers at 25 cents, and to users at 35 cents per pound. Kates suggested. Sixty per cent ad valorem ?i or 10 cents per pound and 25 per cent ad valorem. Remarks. This article is important as a mordant in the leather and textile industries. The protection needed is obvious. (See also hearings before Ways and Means Committee, p. 106.) PARAGRAPH 88. ZINC CHLORIDE. FAVORING LOWER DUTIES : The Diamond State Fiber Co., Bridgeport, Pa. (Brief; no appearance at hearings. ) Costs and selling prices. The price of zinc and hydrochloric acid, the raw materials used in the manufacture of zinc chloride, has reached pre-war levels, yet domestic manufacturers of zinc chloride are asking 8 cents per pound for the latter, while the imported product can be laid down at the company's plant for 7 cents per pound, duty paid, indicating that domestic manufacturers are not justified in asking for additional tariff protection. SCHEDULE 2. EARTHS, EARTHENWARE, AND GLASSWARE. PARAGRAPH 201. FIRE BRICK. WITNESS. FAVORING PROPOSED OR HIGHER DUTIES : F. T. Crowe & Co., Seattle, Wash. (Brief; no appearance at hearings.) Kates suggested. A specific duty on fire brick is requested instead of an ad valorem rate. Under the act of 1909 the duty was $1 per ton on the standard 9-inch brick, weighing approximately 7,000 pounds to the thousand. The protection given to American manufacturers would be $3.50. On a specific rate, English, Scotch, and Chinese brick would pay the same duty per thousand as the Canadian brick, which is produced at much higher cost on account of the wages and fuel cost being even higher than in this country. DIGEST OF TARIFF HEARINGS, H. R. 7456. 99 Remarks. There are some hardships under the foreign valuation plan, owing to the fact that prices of Canadian brick in the home market are considerably higher than English and Scotch prices in the United Kingdom. On Canadian brick the railroad freight rate from the plant at Clayburn, British Columbia, only 10 miles over the border, is 21 cents per hundredweight to Tacoma and 17 cents to Seattle. Ocean freight on English and Scotch brick has been as low as 20 shillings per long ton. PARAGRAPH 202. TIUES. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OK HIGHER DUTIES: Mr. D. A. Cable, representing United States Roofing Tile Co., Parkersburg, W. Va. Mr. F. S. Williamson, representing Williamson & Messinger, Philadelphia, Pa. FAVORING LOWER DUTIES : Mr. W. A. Revis, importer, representing importers and users of Adamantine tiles, New York. Mr. Adolph Grant, representing Adolph Grant & Co., New York. REQUESTING RECLASSIFICATION : The United States Roofing Tile Co., the Murray Roofing Tile Co. (Joint brief.) Hearings: Pages 1352-1354. Witness : Mr. D. A. Cable, representing United States Roofing Tile Co. Size of industry. Quarry tiles, which have been made in Europe for many years, were not manufactured in the United States to any extent before the war, but there are now seven small plants in opera- tion. The United States Roofing Tile Co. is the only one engaged exclusively in the production of these tiles. It began operations in 1914, but made no profits until 1918. In the fiscal year 1920 importa- tions of quarry tiles were twice the value of all other imports of tiles. Rates suggested. Quarry tiles, red or brown in color, 5 cents per square foot, but not less than 25 per cent ad valorem, the latter being, under American valuation, practically equivalent to 45 per cent, the rate provided under the Payne- Aldrich Act. The witness further requested that the word " so-called " occurring before " quarry tile n be stricken out. These rates are requested because the industry is a new one in the United States, and the rates proposed will act as a stabilizer and assist the new plants to survive competition. Hearings: Pages 1345-1349. Witness: Mr. F. S. Williamson, representing Williamson & Mes- singer. Costs and selling prices. The average foreign market price of the cheapest grade of red unglazed floor tile, known as Plastora, is IT cents per square foot in England. The nearest comparable tile of American manufacture is a much better tile, valued at about 40 cents per square foot. White glazed wall tiles are divided into three quali- ties, selling in the United States for 50, 40, and 25 cents per square foot, respectively. The practice of marketing inferior German tiles in this country as the best quality product should be stopped. 100 DIGEST OF TARIFF HEARINGS, H. R. 1456. t Size of industry. The domestic industry is more than sufficient to supply all demands. Its products are now valued at from $5,000,000 to $7,000,000, while imports are about $100,000 per annum. Imports of tile, especially white glazed wall tile, during the past two years were due to the fact that domestic manufacturers could not make de- liveries and contractors were forced to import tile at any price, re- gardless of quality. Many of the inferior tiles imported are now in warehouses and can not be sold. Rates suggested, The witness argued that the proposed duty of 8 cents per square foot, or 35 per cent of the 40 cents (the price of the American article), is prohibitive when applied to the cheap English tile selling abroad for 17 cents per square foot, being 80 per cent of the foreign selling value. He objected for this reason to the ad valorem minimum proposed, pointing out that it is out of proportion to the 3 cents per square foot and not less than 20 per cent ad valorem assessed on far better quarry tiles. He would assess the rate* of 4 cents per square foot on all unglazed tile, with no limiting ad valorem value, and would have white glazed tiles made dutiable at a rate be- tween 5 and 8 cents per square foot, also without mention of an ad valorem equivalent. This stand was taken by the witness because American manufacturers can and do supply the entire consumption of tiles of all kinds. Hearings: Page 1354. Witness: Mr. W. A. Revis, importer, representing importers and users of Adamantine tiles. Costs and selling prices. The red, unglazed tiles known as Ada- mantine tiles are made in Wales and cost at Atlantic seaboard ports to-day 26 cents per square foot. Comparable domestic tiles sell for 44 cents. Rates suggested. All reference to color should be deleted from that part of paragraph 202 relating to quarry tiles, these being made in blue, buff, and gray, as well as in red and brown. Witness states that having regard to the selling prices outlined under " Costs and selling prices" the duty on Adamantine tiles will be increased from 5 cents (Underwood) to 16f cents, or to 225 per cent. This would bring their cost to 43| cents per square foot and prohibit further im- portations. Hearings : Pages 1349-1351. Witness : Mr. Adolph Grant, representing Adolph Grant & Co. Costs and selling prices. There are three grades of white glazed wall tiles, selling respectively for 50, 40, and 25 cents per square foot. Comparability. American manufacturers produce a high-grade glazed wall tile which competes directly with the imported. A dull, egg-shell glazed tile produced in England is not produced, in the United States. An excessive duty on the latter product protects no American industry, but handicaps the building contractor in the United States. Rates suggested. At least 10 cents per square foot for bright glazed wall tile and 8 cents per square foot on English dull-glaze tile, with no ad valorem minimum or maximum. A proviso should be added to the effect that no foreign manufacturer be permitted to bring into this country any tile at a lesser price than the best price DIGEST OF TARIFF HEARINGS, H. R. 7456. 101 for the best quality of goods prevailing in his own country at the time the shipment is made. This would obviate the possibility of dumping inferior goods in this market. Remarks. The testimony of Mr. Williamson is, in part, the sub- ject of a letter addressed, on September 10, 1921, to the chairman of the Senate Committee on Finance, in which Mr. F. W. Walker, representing the Associated Tile Manufacturers, offers criticisms summarized below: Mr. Walker asserts that if the Plastora tile was imported under the specific rates of the Underwood and Payne-Aldrich tariffs 5 cents and 8 cents per square foot, respectively it was incorrectly classified. This tile, if so imported, would kill the manufacture of similar tile in the United States. As regards white glazed wall tile, much poor quality German tile was offered and sold in the United States at very low prices in 1920, but this was a dumping transaction, soon found" incapable of repeti- tion in view of the American demand for very much better quality. A quality is now being offered by German manufacturers at a price which bids fair to command the market. A similar condition applies to tile exports which, including Canada, have never amounted to $200,000. It seems probable that Germany will soon command all export markets through her low cost of manufacture. Referring to the testimony of Mr. Adolph Grant, Mr. Walker classes it with Mr. Williamson's as " ingeniously made for the pur- pose of covering up facts and enabling the importation of certain tiles for their use." Every class or kind of tile mentioned in para- graph 202 is manufactured in the United States. Differences in prices of white glazed tile are accounted for by their assortment into three grades on account of surface blemishes, one grade being neces- sarily sold below cost of manufacture. Mr. W. A. Revis's statement in regard to "quarries" evokes the remark that these are now used the same as tile and should be so classified. The inclusion of other colors than red or brown with quarries would lead to the importation of tiles under quarry classi- fication, within which the Adamantine tile falls. The testimony of Mr. D. A. Cable leads to the explanation that the qualification "so-called" was originally used to prevent con- fusion between terms. With the same object, Mr. Walker suggests the need of proper classification, the retention of the words " red or brown in color " and the reinstatement of the words " inch or over in thickness." The letter concludes with an expression of approval of paragraph 202. although the measure of protection from German tile, made under cheap conditions, is not as the tile interests would like. On the other hand, while regarding Japanese conditions as likely to offer a very serious problem at no late date, they refrain from more than that allusion at this time. Witness: The United States Roofing Tile Co., the Murray Roofing Tile Co. (Joint brief; no appearance at hearings.) The brief asks that no exception be made of pill tiles, quarries, or quarry tiles. Remarks. It is argued that quarry tiles are both glazed tiles and vitrified tiles and that an equal amount of labor is needed for their 7713422 8 102 DIGEST OF TARIFF HEARINGS, H. R. 7456. production. The labor engaged in manufacturing quarry tiles is entitled to the same protection as that used in the manufacture of unglazed and vitrified tiles. The discrimination originated in 1908, when practically no quarry tiles were made in this country, has been carried into subsequent tariff bills. Quarry tiles are made in various colors, including ivory, gray, and red, whereas paragraph 202 places a duty on red and brown, only. This color restriction should be eliminated. PARAGRAPH 203. HYDRAULIC CEMENT. WITNESSES, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DTTTIES : Mr. William .T. O'Brien, representing 83 cement manufacturers ; address, Baltimore, Md. Mr. Hal H. Smith, representing the Huron Portland Cement Co. Hearings : Pages 1354-1367. Witness: Mr. William J. O'Brien, representing 83 cement manu- facturers. Costs and selling prices. The average factory price of cement in the year 1920 was $2.02. Cost of production in that year was $2.019 a barrel, which includes a 6 per cent charge for profit, as in 1920. The price to the consumer sometimes reached $8 a barrel during the war. Size of industry. The Portland cement industry in the United States has 115 plants with a 1920 production of 100,302,000 barrels. Shipments in the same year aggregated 96,329,000 barrels; there was, therefore, an overproduction of approximately 4.000,000 barrels. The rated capacity of the plants totals about 149,000,000 barrels. The capital invested is substantially $130,000,000, and the industry employs 36,500 men in and about the mills. The yearly pay roll amounts to $61,500,000, or nearly $1,700 per man. Of the domestic plants several are on the Pacific coast, 31 near the Canadian border, 10 along the Mexican border, and a large number adjacent to the Atlantic seaboard. In 1920 there were imported 502,785 barrels, valued at $1,230,000, the major part coming from Canada. Exports during 1920 amounted to 2,985,810 barrels, valued at $10,055,369. Of these, 31,486 barrels went to Canada and the rest were shipped mainly to South America and the West Indies ; none to Europe. Rates suggested. The witness requested a rate on Portland ce- ment equivalent, on American valuation, to the 8 cents per 100 pounds under the Payne-Aldrich schedule. This is necessary, be- cause Canadian productive capacity is increasing very rapidly, while favorable geographical location and freight rates permit Canadian manufacturers to cut below the prices of American manufacturers in the northern border States, especially Michigan. Remarks. Canada imposes a tariff of 8 cents per 100 pounds on cement, equivalent to 30.4 cents per barrel. There is a 20 per cent ad valorem duty on the sacks and a 2 per cent sales tax covering the cement and container, making in all a duty of 56.4 cents per barrel. In addition, there is an antidumping duty not to exceed 15 per cent. A brief, subsequently submitted, points out that the industry is particularly vulnerable to -foreign competition, Canadian manufac- DIGEST OF TARIFF HEARINGS, H. R. 7456. 103 turers enjoying especially favorable conditions. Roman, Portland, and other hydraulic cement should be subject to a duty of 8 cents per 100 pounds, including weight of barrel or package, and to a duty of 7 cents per 100 pounds in bulk. Hearings: Pages 1367-1369. Witness: Mr. Hal H. Smith, representing the Huron Portland Cement Co. Costs and selling prices. Canadian labor costs in cement plants are 20 to 25 per cent less than in plants on the American side; that is to say, common labor is 25 cents in Canada as compared with Michigan labor of 40 cents. American raw material is located at some distance from the manufacturing plants, and Canadian mills possess an advantage in this respect. Canadian plants are located in close proximity to the ports of Buffalo, Cleveland, and Detroit, and freight rates from Canadian plants to these centers are in some cases as low as 10 cents a barrel, or one-third of the domestic rate to the same center. A large part of the Michigan cement production is sold direct to the consumer. Prices in Michigan to-day are $1.70 per barrel net. There has been at times a small discount as between the dealer or jobber and the consumer. Size of industry. There are 12 cement plants in the Michigan district. The 1920 production was 5,000,000 barrels, with a capacity of 7,000.000 barrels. The invested capital amounted to $16,000,000, and the industry employs 3,000 men, receiving yearly wages of $4,500,000. Rates suggested. A rate of 8 cents per 100 pounds, including weight of barrel and package, as in the Payne- Aldrich schedule, would neutralize to some extent the advantage possessed by the Canadian plants in the way of cost. It would tend to bring cement duties into line with those of similar products, such as clay and lime- stone (raw materials in the manufacture of cement), which are assessed 5 cents per 100 pounds. PARAGRAPH 204. LIME. WITNESS, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. William A. Humphrey, representing the National Lime Association and the lime manufacturers of the Pacific coast ; address, Washington, D. C. Hearings : Pages 1370-1377. Costs and selling prizes. The Pacific coast lime manufacturers compete directly with the lime manufacturers located in British Co- lumbia. Labor costs in British Columbia are from one-third to one- half those paid in the United States, largely because Canadian plants use Hindu and Chinese labor, whereas American labor is used in domestic plants. Thus, wages paid in Canada include Chinese coop- ers, 40 cents per hour; Chinese firemen and stokers, $3.85 per day; Chinese mine labor, $2.82 per day ; common labor. 25 cents per hour (Canadian currency). As against these rates wages in the United States are : Coopers, 87 cents to $1.25 an hour ; firemen and stokers, $7 to $9 per day ; miners, $5 to $7 per day ; common labor, 50 to 75 cents an hour. In addition to the above. Canadian plants can utilize 104 DIGEST OF TARIFF HEARINGS, H. R. 7456. cheap foreign shipping in transporting their products to American points of consumption, while domestic plants must use higher-priced American tonnage. The 15 per cent depreciation in Canadian cur- rency is in itself a serious handicap to the American producers. As regards selling prices, it was claimed that Canadian producers had resorted to unfair methods in competing on the United States side of the border. The statement was made that the Pacific Lime Co. has offered to stay out of the American market if American manu- facturers would agree to pay it a tribute. It has published mislead- ing and false advertising and has, in fact, resorted to every known form of commercial piracy. The witness claimed further that a large shipment of lime was placed on the American market with the express purpose of breaking the market when this proceeding ap- peared to be profitable to the Canadian owners. Size of industry. No mention was made of the lime-producing capacity on the Pacific coast of the United States, but the Roach Harbor Lime Co., the largest plant, with a capacity of 450,000 barrels annually, was referred to as now producing only 30,000 barrels per year. Comparability. The Bureau of Standards in Washington has demonstrated by chemical analysis that both Canadian and American lime are the highest quality produced in the world. They are, there- fore, comparable in every way. Rates suggested.- iSftSnSSk Lime in cooperage : _ .gross weight-- 50 Lime in bulk do 30 Hydrated lime do 40 Limestone, broken or crushed, in bulk 15 Ground limestone in bags 7} Ground limestone in bulk 5 The witness estimates that these rates would neutralize the protec- tion now enjoyed by the Canadian producer, but would still leave him the advantage of foreign cheap ships, of exchange, and of cheap Chinese labor. PARAGRAPH 205. KEENE'S CEMENT, GYPSUM, ETC. WITNESSES, AND INTERESTS REPRESENTED. FAVORING LOWER DUTIES: Mr. A. H. Cousins, representing A. H. Cousins (Inc.), 516 West Twenty- fifth Street, New York City. Mr. W. A. Revis, representing W. H. Revis (Inc.), New York City. Mr. William M. Chadbourne, representing importers of Canadian gypsum. Hearings: Pages 1380-1383. Witness: Mr. A. H. Cousins, representing A. H. Cousins (Inc.). Comparability. Witness states that, having experimented with every grade of American Keene's cement, he has been unable to find one which satisfied his requirements. The A. H. Cousins Co., manu- facturing high-grade artificial marble, have found that they must have the highest grade of imported material. Hearings : Pages 1377-1380. Witness: Mr. W. A. Revis, representing W. H. Revis (Inc.). Costs and selling prices. The ocean freight cost of laying down Keene's cement at New York is $9.02, and the total cost varies from DIGEST OF TARIFF HEARINGS, H. R. 7456. 105 $27.32 to $56.43, depending on the grade. This material sells to the consumer at from $40 to $80 per ton. At the present time the net wholesale prices of comparable foreign and domestic grades in New York City are $28.40, $45.58, and $53.17 for the foreign as compared with $24.70, $27.97, and $50.20 for the domestic. Prices for other foreign grades are contained in witness's brief on page 1379. Comparability. The highest grade of Keene's cement imported at high prices and only in small quantities is not comparable to anything manufactured in the United States. The cheaper grades of imported cement, on the other hand, have not been able to survive present conditions and their importation has about ceased. Rates suggested. The proposed rates in H. R. 7456 will amount to almost double those of the Payne- Aldrich bill and to three times the Underwood rate. The witness requests that the duties be made not more than the rates contained in the Payne-Aldrich Act. Ameri- can cement is selling at lower prices than the foreign article, show- ing conclusively that American manufacturers require no more pro- tection than they are receiving at present. Supplementing his oral testimony, Mr. Eevis, in a letter to the committee, dated August 23, 1921, defends his statement that the duties under H. R. 7456 are very materially higher than those under the Payne-Aldrich bill. Although the rate to be applied is specific, the duties are on a sliding scale and if they are adjusted according to the selling price of the comparable American article they will be 200 per cent higher than those under the Payne-Aldrich bill. Even if the value is taken as the actual cost of the imported merchandise, the increase would be fully 100 per cent over the pres- ent duty by reason of the doubly increased cost. Hates suggested. In the light of further consideration, Mr. Kevis suggests that a flat rate of $5 per ton be applied to all grades of Keene's cement that may be imported. This would eliminate the vexed question of value and be otherwise beneficial. Hearings: Pages 1383-1390. Witness : Mr. William M. Chadbourne, representing importers of Canadian gypsum. Costs and selling prices. The value of raw Nova Scotia gypsum is about $1.50 per ton. Size of industry. The normal consumption of raw gypsum in the United States is between 2.500,000 and 3,000,000 tons, 10 per cent of which is imported. From 80 to 85 per cent of the domestic pro- duction is mined west of the Alleghenys and does not reach the Atlantic seaboard in any quantity. East of the Alleghenys, in the United States, are two sources of supply only, one in western New York, near Buffalo, and two small plants in West Virginia. The Virginia plants produce between 100,000 and 150,000 tons a year, and their product is distributed locally and in the south Atlantic seaboard States. About two-thirds of the supply of raw gypsum for the New England industrial region comes from western New York and about one-third from Nova Scotia. The quarries in Nova Scotia are owned by American capital. The material is mined in Nova Scotia and sh'ipped crude to the United States. When it reaches this country, it is converted into the finished product in American mills. Rates suggested. Witness would have raw gypsum restored to the free list, because the duty collectable is not sufficient to pay for 106 DIGEST OF TARIFF HEARINGS, H. R. 7456. the trouble involved and, further, because the cost of collection and handling, incident to measuring for duty purposes, is a considerable handicap to the manufacturers of gypsum in this country. Ameri- can gypsum producers, with the exception of one small company in Virginia, raised no objection to the placing of raw gypsum on the free list. The Southern Gypsum Co., of North Holston, Va., ob- jected on the ground that the 10,000 tons of foreign gypsum entered through Norfolk, Va., competes with the domestic product for fer- tilizing purposes, while the duties naturally increase the cost to the American farmer. PARAGRAPH 206. PUMICE STONE. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Robert Laughlin, representing California pumice-stone miners ; ad- dress, Buffalo, N. Y. FAVORING LOWER DUTIES : Mr. F. L. Goetz, vice president, representing James H. Rhodes & Co. The American Piano Co., New York City. (Brief.) Hearings: Pages 1394-1403. Witness: Mr. Robert Laughlin, representing California pumice- stone miners. Cost and selling prices. The delivered cost of American pumice stone at Atlantic seaboard is $39.94 per ton. Of this cost freight and cartage alone amount to $22.20 per ton, including 3 per cent war tax. This may be compared with foreign raw material at $13.50, ocean freight at $7, and present duty of 65 cents a ton, making a total of $21.15 delivered on Atlantic seaboard. Touching selling prices, there is a wide difference between the price of the ground pumice stone in bulk and the price obtained by the retailer in small lots. Samples of ground pumice were submitted for which witness had paid at the rate of 80 cents and $1.20 per pound, respectively, whereas the production cost was about 3 cents. This was cited to show that the duty on either the raw or the manufactured product would not materially increase the price to the ultimate consumer. Size of industry. The normal consumption of pumice is between 10,000 and 11,000 tons per annum. Present production in the United States is nil, the last mine closing down about January, 1920. Do- mestic production would not be increased to over 4,000 or 5,000 tons a year except as eastern consumption expanded. Comparability. Witness states in his brief that there are some uses for which only the imported pumice is suitable, but that the cost of pumice stone is so small in comparison with the total cost of the manufactured article that the effect of the proposed rate would be negligible. He cited the example of an automobile selling for from $6,000 to $6,500 upon which 1 pound of pumice is used. Rates suggested. Cents per pound. Pumice stone, valued at $15 or less per ton 1 Pumice stone, valued at more than $15 per ton 1. 1 Wholly or partly manufactured 1. 4 Manufactures of pumice stone * 1 1 And 26 per cent ad valorem. DIGEST OF TARIFF HEARINGS, H. R. 7456. 107 Remarks. The " brief " referred to above, and from which much has been taken, is a letter dated July 25, 1921, addressed to the Com- mittee on Finance by Brand & Stevens, New York City, as showing that " the proposed tariff is not adequate to cover the differential be- tween the foreign-shipped product and the American." Hearings : Pages 1391-1394. Witness: Mr. F. L. Goetz, vice president, representing James H. Rhodes & Co. Costs arifi selling prices. Foreign pumice stone cost $7.50 a ton prior to the war and now costs $13.50 per ton in Italy. This is crude material. No data were given on domestic costs. Size of industry. Italy is the largest producer of high-grade pumice stone. Pumice stone is produced in the United States in Kansas and in the Rocky Mountain States. Comparability. American pumice stone is, according to the wit- ness, absolutely unsuitable for use in fine work, such as furniture polishing and technical uses. The American product is largely used in cleansing compounds, such as Dutch Cleanser, but for other uses the imported product is indispensable. Rates suggested. A duty on pumice stone, crude, not exceeding 65 cents per ton, practically the rate of duty paid at present, or 5 per cent of the present value in Italy, namely $13.50. An increased rate of duty would handicap American consumers of ground pumice stone and would not aid American manufacturers in disposing of their product. Remarks. A letter from Mr. Garlow, of Meade, Kans., a former domestic producer of pumice stone, had been introduced in the hear- ings of the Ways and Means Committee (Part 1, pp. 477, 481). Mr. Garlow, who had thought, in 1913, that Italian pumice stone should be kept out, now says that American pumice is not competitive with the- Italian article. Witness: The American Piano Co., New York City. (Brief; no appearance at hearings.) Rates suggested. The company protests against the increase in H. R. 7456 on pumice stone to the extent of 3,000 per cent, assert- ing that no pumice stone that will work at all satisfactorily is pro- duced in the United States. An increase in the duty from 67^ cents per ton to $20 per ton, it is asserted, would make it impossible for American manufacturers to turn out a high-grade finished piano or other high-class furniture. Remarks. The piano industry is a very large consumer of pumice stone, but satisfactory results have been obtained only through the use of American-ground Italian pumice. For a period of about six months during the war, when it was impossible for the company to obtain Italian pumice, southern California pumice stone was used. Although it is understood that in some industries the domes- tic pumice has proved to be 50 per cent efficient, the company's em- ployees stated that they would be obliged to quit unless they could obtain Italian pumice. 108 DIGEST OF TARIFF HEARINGS, H. R. 1456. PARAGRAPH 207. FLUORSPAR, CHINA CLAY, ETC. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OB HIGHEK DUTIES : Mr. A. A. Northern, representing miners of fluorspar ; address, Hopkins- ville, Ky. Mr. Milton A. Edgar, representing the American Clay Producers' Associa- tion and others. FAVORING LOWER DUTIES: Mr. John Richardson, representing himself and other importers and con- sumers of foreign china clay. The Locke Insulator Corporation, Baltimore, Md. (Brief.) The Maine Coated Paper Co., Rumford, Me. (Briet) W. C. Hamilton & Sons, Miquou, Montgomery County, Pa. (Brief.) Hearings : Pages 1419-1425. Witness : Mr. A. A. Northern, representing miners of fluorspar. Costs and selling prices. Development costs in fluorspar mining are an important factor in the total, because the material occurs in isolated blocks and many feet of tunnel must often be driven from one block of ore to another. Mining could be cheaply carried on be- fore the war, because at that time the deposits were on the surface and easily obtainable. During the war these surface deposits were exhausted, and at the present time mining has been carried on to a depth of several hundred feet. The cost of production at the mines in Kentucky during the year 1920 was $20.25 per ton of 2,000 pounds. The selling price at the mines in Canada, January- June, 1921, was $8.75 per ton, and the English cost of production was $2.80 per ton. The average landed cost of foreign fluorspar during the first six months of 1921 was $10.50, exclusive of duty. This includes first cost, transportation, and profit to the foreign producer, as compared with the average cost of $20.25 in this country without profit to the consumer. As against this, English fluorspar is now being delivered at Atlantic ports, duty paid, at a cost of about $10.50 per short ton. Size of industry. The production of fluorspar in the United States in 1917 was 218,000 tons. Imports in 1918 amounted to 12,572 tons. In 1914 the domestic production was 95,000 tons, and in 1918, 263,000 tons. Aggregate tonnage and costs in 1920 are : Tons, 140,393 ; costs, $2,864,442. Rates suggested. Witness requests, as a minimum, a duty of $10 per short ton, this being necessary to neutralize the difference in production costs between the domestic and the foreign article. Hearings : Pages 1415-1419. Witness: Mr. Milton A. Edgar, representing the American Clay Producers' Association and others. Costs and selling prices. The major difference in the cost of American, as compared with English, china clay lies in the freight rates from the mine to the point of consumption. Rates from south- ern producing points to consumption points east of Buffalo and Pittsburgh run $9 a ton. The ocean freight rate to-day is $2.50 a ton almost a ballast rate. Size of industry. The annual consumption of china clay is about 550,000 tons of 2,000 pounds. Of this, 250,000 tons is domestic and 300,000 tons English. All but about 50,000 tons of the domestic pro- duct\on is produced in the South, while the market for it lies almost DIGEST OF TARIFF HEARINGS, H. R. 7456. 109 entirely in the North and West; paper mills take about two-thirds of it. Comparability. No reference is made to comparability beyond an admission that some mills prefer English clay for paper-making purposes. Rates suggested. Six dollars per ton on china clay ; a rate of $4.50 would barely cover cost differences. In a letter dated August 22, 1921, the witness, as requested, informs the committee that, since 1914, the freight rate on domestic clays has been increased 58$ per cent, whereas the freight on English clay, always a ballast rate, is now lower than it was in 1912. In 1912 the ocean freight rate from England was 8 to 9 shillings, or $2 to $2.25 per long ton. In August, 1921, taking exchange at the then rate of exchange, the rate of 10 shillings per long ton amounted to $1.82. Hearings : Pages 1403-1415. Witness: Mr. John Richardson, representing himself and other importers and consumers of china clay. Costs and selling prices. The witness stated that arguments of the domestic producers (typified in Mr. Edgar's testimony) center about the difference in freight costs between domestic points of production in the South and points of consumption in Maine. The ocean freight rate this year is 15 shillings, not 10 shillings per ton, as domestic miners claim; moreover, Maine consumes only 50,000 tons of china clay a year. The freight rate to Maine from Georgia is $9.06, as against an ocean-rail rate of $5.50. Massachusetts con- sumes 50,000 tons a year, with freight rates the same as for Maine. New York and New Jersey consume 50,000 tons. The rate from Georgia is $8.65, the rate from foreign sources being $8.- Pennsyl- vania, Delaware, Maryland, Virginia, and West Virginia take about 85,000 tons; rates from Georgia are $7; from England, $8. Michi- gan consumes 60,000 tons, with a rate from Georgia of $7.65 and for- eign, $10. Ohio consumes 60,000 tons ; the domestic rate is $8 ; for- eign, $10. Wisconsin consumers use domestic china clay exclusively,, the rate being $9, while on the foreign it would be $12. Figures furnished by one of the domestic clay producers placed the present cost of production at from $4.50 to $5 for crude clay and from $6 to $6.50 for washed clay. English china clay production requires more than double the labor that is required in domestic mines and the cost per ton for labor in English clay works is, there- fore, higher than the cost per ton in the American mines. English day labor to-day is paid $15.30 for a 42-hour week. Pieceworkers re- ceive from $19.50 to $24.25 per week. Coal is an important item of expense and fuel costs in England are very high at this time. At the present rate of exchange the cheapest grade of English china clay used for paper making can not be marketed at Atlantic seaboard markets for less than $12 to $14.50 per ton, and to this must be added the inland freight rate. Present prices on domestic clay range from $6 to $7.50 f. o. b. mine on crude clay, and $8 to $10 on washed clay. Domestic pulverized clays, quoted at $12 to $20 f. o. b. mine, are not competitive, since no pulverized clay is imported. Size of industry. British producers have suffered during the past year even more than the domestic. For the first six months of 1920 British exports amounted to 211,633 tons. In 1921, for the same 110 DIGEST OF TARIFF HEARINGS, H. R. 74-56. period, they were only 87,096 tons. Domestic miners testified before the Ways and Means Committee that from 7,000 to 10,000 men were employed in the domestic clay industry at wages from $2.50 to $10 per day. These figures, say 10,000 men at $2.50 per day, working 200 days to a year, give a total yearly wage of $5,000,000. The total production of china clay in 1919* was estimated at $1,648,000, showing a larger expenditure for labor than the total value of the finished product. English miners are receiving 27 cents an hour or practically the same as the $2.50 a day paid in America. Comparability. Domestic clay is satisfactory for use as a filler in cheap paper manufacture and for this use has displaced the foreign article on a price basis. High-grade clay, such as is used for coating paper, is not produced in the United States. For this manufacturers must have English clay. Probably one-half of the supply of Eng- lish clay imported each year consists of what is known as " high-grade filler and high-grade potting clay " ; there are no clays in the United States which can compete on a quality basis. The low-grade filling clay used in the paper manufacturing industry amounts to about one- fourth of the total imports and is the only one with which American clav is in competition. Rates suggested. The present rate of $1.25 per pound on kaolin or china clay should not be advanced, as only a small percentage of the importations are competitive with domestic products. That being so, increased duties would not aid the American miner, since con- sumers must have the foreign clay in any event. Remarks. The witness's testimony was supplemented by a brief, referred to on page 1408, dated August 20, 1921, in behalf of china and earthenware importing interests. Appended to it is a copy of memo- randum of statement made at a hearing before the War Industries Board, March 27, 1918, in behalf of book-paper manufacturers in regard to a proposed embargo on the importation of china clay. The documents are summarized as follows : LBrief.] It was strongly urged upon the committee that the present duty of $1.25 per ton on English china clay should not be increased. The material differs essentially from the American product going by the same name. The latter can not be substituted for the former without injury to the product, whether paper or pottery. The two materials are, in fact, largely noncompetitive. An additional duty would be of small or doubtful value to the relatively small American clay in- dustry, while enhancing prices to consumers. [ Appendix. ] It was admitted that in the lower grades of book and printing paper a considerable percentage of American clay can be safely used, but its use for high grades is injurious. The development of southern (United States) clays is insufficient to provide for the needs of the country, and difficulties in regard to railroad transportation were then increasing. As against this, a large proportion of English clays have been brought into this country practically as ballast. A stoppage of English clay imports would entail a large curtailment of available material, with consequent loss of employment to workers, injury to DIGEST OF TARIFF HEARINGS, H. R. 7456. Ill employers, and hardships to consumers of periodicals and other book papers. Witness : The Locke Insulator Corporation, Baltimore, Md. (Brief ; no appearance at hearings.) Rates suggested. No tariff on English clays until such time as American clay miners are prepared to furnish equivalent material. Remarks. An increase in the tariff at present would cause manu- facturers either to use domestic clays, thereby lowering the quality of their product and jeopardizing the reputation for superiority en- joyed by American electrical porcelain, or require them to maintain the quality at increased cost, with consequent difficulty in continuing the export business taken from German insulator manufacturers. This corporation now uses English china clay exclusively, although it would greatly prefer to use domestic clays and has tested hundreds of samples. It uses as much domestic ball clay as possible, but in all classes of clays domestic miners have been found unwilling to appre- ciate the importance of uniformity in grades. Witness: The Maine Coated Paper Co., Rumford, Me. (Brief; no appearance at hearings.) Rates suggested. The brief is a protest against an increase in the duty on English china clay over the present rate of $1.25 per ton. It is claimed that the duty under H. R. 7456 will not protect any Ameri- can industry, as there is no domestic product that can be used in place of English china clay in the manufacture of coated papers. Witness: W. C. Hamilton & Sons, Miquon, Montgomery County, Pa. (Brief; no appearance at hearings.) Rates suggested. Any added duty on kaolin will prove an added cost to manufacturers of certain products without affording any protection to the domestic mining industry. Remarks. Regardless of the amount of the duty, English clay must be used to a considerable extent in the pottery industry and, except in low-grade papers, exclusively in the paper trade. The characteristics of a good paper clay are absolute cleanliness, free- dom from foreign matter, and plasticity. Dirty clay means dirty paper. The most deleterious foreign substance is mica, which is crushed out when the paper comes through the calender rolls, leav- ing pinholes. English clay producers have through generations of experience learned the art of floating and washing clay far more effectively than can be done in this country. While there are a number of patented fillers (and talc is also used for this purpose), practically all of them tend to dull the edges of the printers' knives. PARAGRAPH 207. CLAY. WITNESS. FAVORING HIGHER DUTIES : The Kentucky Construction & Improvement Co., Mayfield, Ky. (Brief; no appearance at hearings.) Size of industry. It is stated that there are enormous deposits of clays suitable for the manufacture of all kinds of ceramic products in the States of Kentucky, Tennessee, Missouri, Mississippi, Georgia, and North Carolina. According to papers published by the Bureau 112 DIGEST OF TARIFF HEARINGS, H. R. 7456. of Standards, such clays have been successfully used in the produc- tion of various articles. Glass melting pots were manufactured from American clays during the war and met every requirement, includ- ing the production of optical glass. The use of American plastic clay pots and other refractories would rapidly grow into an enor- mous industry if the product were placed on a competitive basis with German raw material. Rates suggested. A duty of 40 per cent to be placed on ball clays, kaolin, and fire clays. Remarks. American ball clays are well suited for steel enamels and are the best that can be had for stoneware glaze. For semiporce- lain and porcelain, including electrical porcelain, dinnerware, sani- tary ware, and other white Tines, American ball clays will meet all requirements, but their production can not go ahead without proper tariff protection. PARAGRAGH 207. DIATOMACEOUS EARTH. WITNESS. FA YOKING PROPOSED OB HIGHEB DUTIES : The Celite Products Co., Los Angeles, Calif. (Brief; no appearance at hearings.) Costs and selling prices. The average cost of production at the point of manufacture is approximately $25 a short ton, whereas the value of the foreign produce, as shown by the import statistics, is only $10 a ton. Size of industry. Prior to 1912 there was in this country only one operating company, producing only 1,000 tons of crude mate- rial, used principally for insulation purposes. The Celite Products Co., which was organized in that year, spent almost $1,000,000 in developing many new uses for the material as a filtering and filling medium in the chemical industries ; new methods of preparation were also discovered which have greatly increased its value as a high- temperature heat insulator. Since 1912 other companies have started up, until there are now about 12 3 located in Washington ; 2 each in. Oregon, California, and Nevada; and 1 each in Maryland, Utah, and New Hampshire. The total value of diatomaceous-earth plants in the United States is estimated to exceed $6,000,000. In 1920 the total consumption was in excess of 60,000 tons, valued at more than $2,000,000. The in- dustry gave employment to about 800 men, consuming supplies and equipment valued at approximately $800,000. Direct labor consti- tutes about 60 per cent of the cost of production of the American product. Rates suggested. The duty on diatomaceous earth should be in- creased to 30 per cent ad valorem based on the American value of the foreign product. Remarks. The production and manufacture of diatomaceous earth in the United States is a new industry. This mineral, a porousj, hydrated silica, is to be found both in the eastern and the western parts of the United States. After quarrying, the crude mineral is processed by exposure to the weather, then reduced and separated in specially designed mills into a fine powder, which is bagged for DIGEST OF TARIFF HEARINGS, H. R. 7456. 113 shipment. Other products are manufactured by cutting the crude material to shape in a sawmill or by pressing the ground material into block or brick molds and burning at a high temperature. Diatomaceous earth, or kieselguhr, is produced chiefly in Ger- many and Canada, but a certain amount comes also from Africa, Japan, Australia, Mexico, and Spain. The German industry is old and well established as regards certain products, but has not as yet been extended into many of the new fields created by the American companies. Government statistics have grouped diatomaceous earth with tripoli, rottenstone, abrasives, etc., although it is used in industries entirely different from any in which they are used. It differs from them in physical and chemical constitution. Other names which might be recognized in the tariff schedule as more or less synonymous are kieselguhr, infusorial earth, tripolite, and fossil flour. PARAGRAPH 207. FULLER'S EARTH. FAVORING PROPOSED OR HIGHER DUTIES : The Floridin Co., Warren, Pa. (Brief; no appearance at hearings.) Costs and selling prices. English fuller's earth is offered at New York as low as $20 per ton f. o. b. dock, and including bags, whereas the average cost to the Floridin Co. for mining and preparing the product last year was $11.86 per ton. Bags cost $1.50 per ton and freight from their mines at Quincy and Jamieson, Florida, to New York, by the cheapest route (rail and water) is $7.07 per ton, a total of $20.43 per ton laid down in New York, or 43 cents less than the selling price of the English product. Rates suggested. An increase in the duty from $1.75 to $3 per ton, in order to induce capital to invest in the industry. As there are no factories erected for grinding imported crude fuller's earth, the amount purchased in the crude state is insignificant. It is there- fore suggested that the duty on the crude earth should equal that on the manufactured product. PARAGRAPH 207. SILICA, CRUDE. WITNESS, AND INTERESTS REPRESENTED. FAVORINIG PROPOSED OR HIGHER DUTIES: Mr. George F. Pettinos, Philadelphia, Pa., representing the Bridgeton Sand Co. and the Crystal Sand Co., Bridgeton, N. J. (Brief; no appearance at hearings.) Costs and selling prices. The sand produced by these companies contains 99.05 per cent silica and is used in the manufacture of glass, silicate of soda, etc. It competes with German sand loaded at Ant- werp at a cost of 80 cents to $1 per 1,000 kilos (36 to 45 cents per ton) and comes to this country as ballast. Arriving in this country, this sand is discharged on lighters and taken to the consumers for from 40 to 50 cents per ton. Shipments of Belgian sand have arrived at Philadelphia, Xew York, Baltimore, and Norfolk, at an average total cost of $1.50 per ton, whereas the freight from the domestic plants 114 DIGEST OF TARIFF HEARINGS, H. R. 1456. to Philadelphia is $1.54, and to New York and vicinity, $2.94 per ton. Rates suggested.- A duty of $2 a ton on washed silica sand. PARAGRAPH 207. GROSS- ALMERODE POT CLAY. WITNESS. FAVOBING LOWER DUTIES : The Ohio Valley Clay Co., Steubenville, Ohio. (Brief; no appearance at hearings. ) Comparability. During the war and until about a year ago, various domestic clays were substituted for the German clay, but glass manu- facturers did not get 40 per cent service out of the pots. As soon as German clays were again offered at a reasonable price, one pot manu- facturer after another started to use German clays ; there is no manu- facturer in the business to-day who does not prefer German to any domestic clay he ever used. Rates suggested. The proposed duties on gross-almerode glass pot clay would work serious financial injury to every glass-pot manu- facturer in the United States using glass melting pots and tank blocks. The provision should be eliminated from the bill. PARAGRAPH 207. BAUXITE. WITNESS. FA YOKING LOWER DUTIES : The Pennsylvania Salt Manufacturing Co.. Philadelphia, Pa. (Brief; no appearance at hearings.) Rates suggested. Protest is made against the proposed duty of $1 per ton on bauxite. Remarks. The plant process of this company was constructed at a heavy expense to use high-grade bauxite, as found in France, Italy, etc., and totally unlike that produced in this country, con- taining as it does 10 to 15 per cent more alumina (the valuable con- stituent) ; 5 to 10 per cent less silica (the objectionable impurity) ; and 20 per cent more iron, which in their case is a desirable con- stituent. During the war exigency the firm attempted to use American bauxite in the production of oxide of alumina for use in the manu- facture of metallic aluminum, fine abrasives, and various iron-free salts. The yield, however, was poor and costs were so high as to demonstrate the impossibility of such substitution. PARAGRAPH 208. MICA. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. W. Vance Brown, representing numerous producers of mica ; address, Asheville, N. C. Mr. J. E. Burleson, representing miners of mica ; address, Spruce Pine, N. C. Mr. B. C. Grindstaff, representing miners, of mica ; address, Asheville, N. C. Mr. James L. Frazee, miner and manufacturer of mica, New York City. DIGEST OF TARIFF HEARINGS, H. R. 7456. 115 FAVORING LOWER DUTIES : Mr. James I. Brereton, representing the Columbia Graphophone Manufac- turing Co. Mr. Marion Dorian, representing the Columbia Graphophone Manufacturing Co., Bridgeport, Conn. The Columbia Graphophone Manufacturing Co. (Brief.) REQUESTING MODIFICATIONS : The Rogers-Pyatt Shellac Co., New York City. REQUESTING RECLASSIFICATION : Mr. Charles P. Storrs, representing the Storrs Mica Co. and other manufac- turers ; address, Oswego, N. Y. Mr. Lewis McCarthy, representing the Mac-alien Co. and 15 other manufac- turers, miners, and dealers in mica. Mr. C. W. Jefferson, representing the Mica Insulator Co., New York City. The Asheville Mica Co., Biltmore, N. C. (Brief.) Fourteen manufacturers, dealers, and miners in mica. (Brief; no appear- ance at hearings.) Hearings : Pages 1451-1455. Witness : Mr. W. Vance Brown, representing numerous producers of mica. Costs and selling pieces. Wages in India range from 3 to 23 cents per day, applying to 65 per cent of the world's production. While users are sometimes prejudiced in favor of the product of one country or another, they are all very similar. The United States production averages more of the low quality than of the finer, because the fine qualities are usually in hard rock or at deeper levels, requiring large capital and more extensive mining. Size of industry. Of the total amount of mica consumed in the United States, imported mica furnishes 65 per cent and the domestic 35 per cent. In 1919 the figures were 75 per cent and 25 per cent. Rat Unmanufactured or rough-trimmed mica and splittings, 25 cents per pound and 50 per cent ad valorem. Cut, stamped, or trimmed and built-up mica, and manufactures of mica, 50 cents per pound and 50 per cent ad valorem. Photographic diaphragms, 10 cents each and 50 per cent ad valorem. Crude, raw, scrap, or refuse, 1 cent per pound and 50 per cent ad valorem. Ground, flake, or dust, 2 cents per pound and 50 per cent ad valorem. Remarks. Mr. Brown's brief includes a letter from the American Mining Congress and the Southern Tariff Association indorsing his claims, also a letter from the American consul at Calcutta giving wages at Indian mica mines. Hearings : Pages 1455-1459. Witness : Mr. J. E. Burleson, representing miners of mica. Costs and selling prices. Wages in the South to-day are about $3 a day, as compared with $1.50 before the war. Size of industry. In addition to the fields developed at present, several counties in Georgia are very rich in mica. Witness had opened up about six mines there. The United States can supply all domestic needs under adequate protection. Rates suggested. Same as requested by Mr. W. Vance Brown. This, the witness stated, " will not protect us, but it will probably put us on our feet so we can operate." In a letter to the committee, dated September 9, 1921, the witness asks for " 10 cents per pound specific on all unmanufactured or rough-trimmed mica and 30 per cent ad valorem." 116 DIGEST OF TARIFF HEARINGS, H. R. 7456. In a letter addressed to the committee, the witness's company (the J. E. Burleson Mica Co.) refers to a letter dated March 8, 1921, from the American consul at Calcutta, India, to the Asheville Mica Co., of Biltmore, N. C. The letter gives the wages paid by one firm in India for mining and preparing mica, exchange being as- sumed at par. Mining : Per day. Carpenters and fitters _____________________________________ $0. 18-$0. 23 Men coolies ______________________________________________ . 09- 12 Women coolies ____________________________________________ . 05- Boy coolies _______________________________________________ . 03- Preparation : Cutters __________________________________________________ . 07- Splitters ------------------------------------------------- . 04- Sorters ___________________________________________________ . 09- In addition to this Indian labor, they employ Anglo-Indians as assistants at the mines, at salaries ranging from 60 to 200 rupees per month. Another firm states that "their labor receives a maximum of 8 annas per day." Hearings : Pages 1459-1460. Witness : Mr. B. C. Grindstaff, representing miners of mica. Remarks. Witness explained that, following a conference between miners and manufacturers, it had been agreed to substitute the rates proposed in a letter of August 19, 1921, on pages 1454-1455. Mica unmanufactured or rough trimmed only, valued at not above 30 cents per pound _______ 10 cents per pound plus 30 per cent ad valorem. Above 30 cents? per pound __.30 per cent ad valorem. Cut, stamped, and punched mica ________________ 20 cents per pound plus 60 per cent ad valorem. Mica splittings _________________________________ 30 per cent. Built-up mica and all manufactures of mica ______ 60 per cent. Mica diaphragms ------------------------------ 10 cents each plus 60 per cent. Crude, raw scrap, and refuse fit only for grinding- 2 cents per pound. Ground, flake, or dust mica _____________________ 4 cents per pound. (Brief signed by T. E. Burleson, Tar Heel Mica Co., D. F. Vance, Asheville Mica Co., B. C. Grindstaff.) Hearings : Pages 1448-1451. Witness : Mr. James L. Frazee, representing miners and manufac- turers of mica. Comparability. American mica is found in all grades, and can be used for all purposes for which the Indian mica is satisfactory. Rates suggested. Mica in sheets, valued at up to 30 cents, iO cents per pound ; all valued above that, 30 per cent ad valorem. Witness bases his argument on the fact that under present condi- tions domestic miners can not afford to trim and grade the product, and thus obtain maximum returns for their work; they are able to receive but little or no return for the small sizes and scrap. A duty as proposed would permit the miner to grade his product and sell it for the maximum returns. Witness produced a specimen of crude North Carolina mica from which he had obtained a large number of parts trimmed to specified sizes and valued all the way from 30 cents to $7 per pound. The crude, unclassified material is valued at 50 cents per pound. DIGEST OF TARIFF HEARINGS, H. R. 7456. 117 Hearings : Pages 1460-1463. Witness : Mr. James I. Brereton, representing the Columbia Graph- ophone Manufacturing Co. ^ Costs and selling prices. Witness quoted from Ways and Means Committee hearings, page 551, Part I, Schedule I, statements of do- mestic mica diaphragm manufacturer's to the effect that diaphragms 2 3 % inches in diameter cost them 20 cents each. The witness's best quotation from foreign manufacturers was 27.8 cents per diaphragm, laid down in Xew r York. No deliveries were made, and the order was canceled. Domestic manufacturers at this time quoted 27 cents, or 0.8 cents per diaphragm below the foreign manufacturer. Size of industry. Witness maintained that the production of high- grade mica in the United States is not and can never be sufficient to supply the domestic demand for this quality of product. Comparability. Domestic mica is variable in quality, and only a very small proportion of the domestic production is suitable for the manufacture of diaphragms ; the balance contains flaws such as bub- bles, waves, etc., which render the material unfit for such use. Where domestic mica is free from these defects it is just as suitable for dia- phragms as the foreign. Witness quotes from the brief of diaphragm manufacturers, page 556 of Ways and Means Committee hearings, to the effect that the output of domestic mines is entirely inadequate for supplying demands of the home industry for diaphragms. Rates suggested. The duty should not be greater than under the Underwood-Simmons Act. The rate proposed by the mica manu- facturers, 10 cents specific duty and 60 per cent ad valorem, would mean an addition of 22 cents to the stated cost of 20 cents, or a pro- tection of 110 per cent. Under duties as high as this the Government would obtain no additional revenue, because the mica would be im- ported in the rough and manufactured here. Domestic manufac- turers would add this duty to the present cost. They are now, as shown, in a position to compete favorably with foreign manufacturers. Hearings: Pages 1463-1468. Witness : Mr. Marion Dorian, representing the Columbia Grapho- phone Manufacturing Co. Size of industry. The witness quoted Mr. Storrs to the effect that domestic mica is entirely unsatisfactory for the manufacture of diaphragms. The raw material is supplied from India. Argentina, and Brazil. Indian is the best. Quoting from the Geological Sur- vey, witness stated that the development of American mica mines had been insignificant even under war conditions ; he quoted further from a statement of Mr. Herbert Smith, of the American Mining Congress, that lack of development may be due to the fact that American miners do not use sufficient care in selecting, grading, and trimming their product. He had never been able to obtain domestic mica in sufficient quantities to meet the demands. Comparability. Witness agrees with Mr. Brereton that domestic mica is entirely unsuitable for use in diaphragms and that the foreign product must be imported to supply the demand. Rates suggested. The rates proposed by the manufacturers and miners are out of all bounds of reason ; the one certain result would be that the Government would get no revenue whatever from this source. 7713422 9 118 DIGEST OF TARIFF HEARINGS, H. R. 7456. Remarks. The -witness was granted the privilege of filing a brief (see page 1468) drawing attention to the purchase by the Columbia Graphophone Manufacturing Co., in 1920, of over 1.000.000 phono- graph diaphragms, made by American manufacturers from imported mica. Hearings : Pages 1465-1468. Witness : The Columbia Graphcphone Manufacturing Co. ( Brief. ) Costs and selling prices. Same as given in testimony by the com- pany's witnesses. Domestic mica sells, grade by grade, at lower prices than the foreign. Size of industry. It is cited that Mr. Storrs. Mr. Smith, of the American Mining Congress, the United States Geological Survey, and diaphragm manufacturers all conceded, when before the House committee, that mica mining was not stimulated to any extent by war prices. Comparability. The brief cites the testimony of Mr. Storrs and Mr. Frazee before the Ways and Means Committee to the effect that domestic mica is not suitable for many purposes. The high duties now requested by these gentlemen are the result of conference with miners, and the consumer is left to shift for himself. Rates suggested. The same : Skilled labor, cost per 100 abroad. Skilled labor, cost per 100 in America. Word?lev, England * $0.46 J1.54 Lemineton, Eneland Edinburgh Scotland (average} .35 42 1.54 1 54 20 1 54 Milan Italv. . . ... . . .28 1.54 One comparatively small company imported 2,000.000 bulbs be- tween March and October, 1921. It is noted that the joint effect of changes in wages and money values is to leave the present wage for skilled bulb workers at about 15 cents per hundred as compared 'with 20 cents a year ago. Thermos bottles were being produced in January, 1921, at a skilled labor cost per 100 inside and outside pints at 46 cents, as compared with $2.44 in America, One Xew York house placed one order for 1,605.000 thermos bottles in Europe. Lamp chimneys costing $2.11 per 100 for skilled labor in America are being produced for 12 cents in Germany and 7 cents in Czecho- slovakia. Corresponding wages are, respectively, $13.75, $1.68, and $0.91 per week. Lamp chimneys are being laid down in Chicago at 30 cents a dozen : the American price is $1.35. Shades (electric), one end finished, absorb 31 cents per 100 for skilled labor in Czechoslovakia and $2.48 in the United States. For the unskilled labor employed the respective figures are $2.59 and $55.90 per week. Glass cutters' wages: "Our investigation justifies the statement that the wages paid to glass cutters are: Belgium, $11.56 per week; Germany. $7.14: Czechoslovakia. $2.44; United States, $30." Materials: Sand costs German and American glass manufacturers, respectively. $0.71 and $5.72 per ton. Coal, in Germany, $2.91 to $4.74 per ton. as against $6.35 in America. Lime, $2.19 per ton in Germany. $20.50 in America. 142 DIGEST OF TARIFF HEARINGS, H. R. 7456. Stress is laid upon the effective compliance, during the war. with United States' Government demands for the creation of plants making chemical glassware, previously imported. This was done, entailing innumerable sacrifices under a pledge that manufacturing interests would be safeguarded after peace had been secured. This can still be done by affording manufacturers and workers the essen- tial protection a step all the more called for in view of the Tariff Commission's testimony to the superiority of the domestic produc':. As regards American exports and imports of glassware, the brief shows that this country has a credit trade balance in the first nine months of 1920 of $16.529.002, reduced to $4,131,300 in the corre- sponding period of 1921. The actual situation is even worse than is thus indicated, as the value of foreign exchange, on which import values are based, has decreased materially in the interim. That American glass workers have done their part by accepting wage reductions in some cases of their own volition is empha- sized in a cited letter from Mr. E. E. Kimble, a prominent, glass manufacturer. There is. on the other hand, no reason to doubt that Germany's national economic council determines and dictates ex- port prices, keeping these just below the cost in the importing coun- tries, a process from which large profits accrue. The brief concludes as follows : Suggestions. The Finance Committee having urged that we offer recom- mendations calculated to minimize the evil confronting the flint-glass industry because of importation, we venture to suggest : First. That the American valuation plan be retained in the tariff bill at all hazards. Second. To avoid a repetition of the misunderstandings that have occurred while paragraphs 217, 218, and 230 of H. R. 7456 have been under consideration by the Finance Committee, and form a basis for a more accurate record as to the class and character of flint glassware that may be imported as well as exported in the future, thereby lending assistance to those who may be called on to legislate in subsequent years, we suggest that flint glassware be classified in the records of our Government under the following headings : (A) Illuminating glassware: This shall include lamps, shades, globes, bowls, balls, reflectors, chimneys, etc., and shall carry a duty of 60 per cent ad valorem on the American valuation plan. (B) All glassware named in Class "A," but consisting of more than one kind of glass and commonly known as "plated" or "cased" glass, produced by several layers of either clear, opaque, or colored glass, and all blown glassware as described in Class "A" that is further ornamented and enhanced in value by engraving, cutting, etching, decorating, printing, silvering, gilding, or by any other process or method embellished or refined, shall carry a duty of 65 per cent ad valorem on the American plan. (C) Incandescent electric light bulbs and lamps, with or without filaments, shall carry a duty of 60 per cent ad valorem on the American plan. (D) Chemical glassware of all kinds, whether used for experimental purposes in hospitals, laboratories, universities, or colleges, shall under no circumstances be admitted for less than a duty of 60 per cent ad valorem on the American plan. (E) Blown or hand made tableware, such as decanters, pitchers, jugs, goblets, wines, tumblers, and kindred ware, whether blown in a mold or made by hand. shall carry a duty of 60 per cent ad valorem on the American plan. (F) All glassware named in Class " E " that is cut, engraved, or decorated in any manner to enhance its value, shall carry a duty of 65 per cent ad valorem on the American plan. (G) All pressed glassware and all other flint glass not enumerated in these specifications shall carry a duty of 60 per cent ad valorem on the American plan. DIGEST OF TARIFF HEARINGS, H. R. 7456. 143 (H) All thermos bottles shall carry a duty of 65 per cent ad valorem on the American plan. A supplementary paragraph (p. 5272) directs attention to the existence, under a Ger- man law, of " The National Economic Council," empowered to regulate export prices. The writers of the brief are convinced that, with the advice of this council; German goods are sold abroad at prices just sufficiently below the cost of corresponding domestic rds to undersell the latter, thus enabling German manufacturers to make large profits, is suggested that United States authorities secure, from their representatives in Berlin a report on the workings of this council. PARAGRAPH 218. ILLUMINATING GLASSWARE. WITNESS, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Nicholas Kopp, representing 26 manufacturers of illuminating glass ; address, Pittsburgh, Pa. FAVORING LOWER DUTIES : Mr. William Friedlaender, representing importers of lighting glassware; address, Brooklyn, N. Y. Hearings: Pages 1570-1577. Costs and selling prices. German and Czechoslovakian manufac- turers, after paying the present 45 per cent duty, can land material in the United States at less than one-half of the American labor cost alone. German laborers are to-day receiving from 20 to 33 per cent less in gold value than in 1914, while the value of their product is on a gold or American dollar basis. Their average wages in the blown-glass industry are about 80 cents per day of 8 hours, as com- pared with American wages of from $8 to $9. German manufacturers figure their finished product sales value as 40 per cent labor, and if it is considered that the American labor cost is eight times that of the German, the American cost on a $1 article would be $3.20. Then, as the American manufacturer figures one-half of his total cost as labor, the article would cost in America $6.40. No definite figures of selling prices of foreign goods in the American market were given by the witness. He stated that foreign goods were selling at lower prices than the domestic, but gave no specific instances. Size of industry. The capital investment in the illuminating-glass- ware industry in the United States is $20,000,000, producing about $25,000,000 worth of glass. Wages amount to $12,500,000 ; material, $5,000,000 ; and coal, $2,500,000, leaving a balance of about 20 per cent for overhead and profit. The product includes shades, globes, re- flectors, bulbs, and similar articles. Comparability. The Germans have no advantage over the Ameri- cans in the matter of machinery. The difference in wages applies chiefly to artistic goods, the bulk of United States products being the cheaper. Rates suggested. First, a special classification for illuminating glassware in Schedule B, and second, a duty equal to the amount of the difference between the cost of labor used in the United States and Europe, Japan, or other countries. Under the present classifi- cation illuminating glassware falling under several paragraph? often does not receive the protection it is legitimately entitled to. A brief subsequently submitted calls for a duty of 60 per cent ad valorem on American valuation on plain and 65 per cent on decorated illuminating glassware. The brief states that the 26 concerns rep- 144 DIGEST OF TARIFF HEARINGS, H. R. 7456. resented have operated their plants at less than 30 per cent capacity since January 1, 1921, and since July 1, 1921, more than 90' per cent of their laborers have been idle. Foreign competition, at low prices which they are unable to meet, is responsible for these conditions. Mr. Kopp, whose testimony is summarized above, addressed a let- ter to the committee on December 16, 1921, as vice president and gen- eral manager of the Pittsburgh Lamp, Brass & Glass Co. This was accompanied by several letters from manufacturers and dealers, set- ting forth the disparity between American costs of production and the prices of German imports. The following examples, typical of the whole, are recorded here as representative of the situation brought to the attention of the committee : The Macbeth-Evans Glass Co., in a letter of October 15, 1921, to the Pittsburgh Co., cited the New York Board of Customs Apprais- ers as having checked up a German consignment of two sorts of glass chimneys billed at 18 marks per dozen, or 14 marks home value, which, at the then rate of exchange, would mean 12 American cents. One of these patterns, known as No. 644A, had been an arti- cle of heavy output by the Macbeth-Evans Co. at $1.35 per dozen, including package, but they had not made a single chimney since June 1, 1921. An " oval duplex chimney," referred to in a letter of the same date, is covered in a foreign quotation of 39 cents per dozen as compared with $1.46 which the Macbeth-Evans Co. found it neces- sary to charge. The company's very large foreign business in this chimney has entirely disappeared. Other letters refer to the company's former export trade, citing a case in which some 30-line Ditman chimneys, offered as low as 40 cents a dozen net after the canceling of an order, were underbid, in Egypt, by an Italian firm at 60 per cent less. Similar conditions are stated to exist in the export trade to Mexico, where chimneys quoted at $1.15 per dozen by the Macbeth-Evans Co. are being sold (November 9, 1921) at 25 cents per dozen. Gauge glasses can be purchased at 35 cents each, or less, for which the company quotes $1.25. The Phoenix Glass Co. refers (November 15, 1921) to a lighting globe for which their price is $9.75 a dozen, while a foreign article is beinff laid down at $6. The Jefferson Glass Co., writing on November 14, 1921, state that they have had to abandon plans for the sale of their products in China, having found that market flooded with German glassware. In other letters, there are references to cancellation of orders on account of " unexplainable " low prices offered for "German and European fixtures." One of these mentions "German goods being offered at such ridiculously low prices" as to threaten the closing down of domestic factories. In another case, a net saving of 50 cents a dozen, laid down in Chicago, is anticipated from buying Ger- man lamp chimneys. Hearings : Pages 1577-1581. Witness: Mr. William Friedlaender, representing importers of lighting glassware. DIGEST OF TARIFF HEARINGS, H. R. 7456. 145 Costs and selling prices. A 16-inch white bowl, used for indirect lighting, is sold in this country by American manufacturers at from $13 to $13.70 per dozen. The cheapest price at which the same bowl can be imported to-day under the present act, taking the foreign valuation, is $14. To this must be added 33^ per cent of the cost or 25 per cent of the selling price (10 per cent for overhead expenses, 10 per cent for selling costs, and 5 per cent for net profit) . The selling price of the bowl costing the importer $14 is, therefore, $18.50 per dozen as compared with the present domestic price of $13 per dozen. Small white electric shades are sold to-day at $1.40 per dozen. After adding importers' expenses and profits the cheapest that this article can be sold by the importer is $2 per dozen. Oil-lamp chimneys are sold to-day at $1.10 a dozen. The importing cost, without any ex- penses other than duty not even carting is $1.16 per dozen. There has been a decrease in prices during the past two years. Thus, green- glass shades for offices were sold prior to the war for $2 to $3 per dozen. During the war domestic prices increased to as high as $15 per dozen. With the first importation the prices dropped to about $7.50 per dozen, and they can be bought for about that price to-day. The value of domestic glassware production is more than double that prior to the war. Imports prior to the war amounted to 6.7 per cent of the value of the domestic product. Importations during the period 1914-15 averaged about $4,000,000. During the first 11 months of 1920 imports amounted to $7,000,000. As foreign prices have doubled and in some cases tripled, the $7,000,000 importation in 1920 corre- sponds to a smaller volume than $4,000,000 worth of importations in 1914. Size of industry. Total glassware manufactures in the United States in 1920 amounted to $267,000,000. Comparability. Foreign manufacturers have some advantage in the sale of glassware containing fine decorations, because foreign decorations are better than those put on here ; the execution is better because men have been doing that kind of work for generations. Rates suggested. Witness would have the duty on blown glass- ware reduced on the basis of the cost figures outlined above. He maintains that 10 per cent under American valuation is equivalent to 40 per cent based on foreign valuation. He is unalterably opposed to the American valuation plan. PARAGRAPH 218. TABLE GLASSWARE. WITNESS. AND INTEREST REPRESENTED. FAVORING LOWER DUTIES : Mr. William P. Graham, representing Graham & Zenger, decorators and importers of glass, New York City. Hearings: Pages 1582-1584. Costs and selling prices. The witness produced two samples of glass goblets, one made in the United States and the other abroad and sold wholesale by the American manufacturer for 81 cents a dozen prior to the war. The importer's price was between 75 and 80 cnts. To-day, the importer's price on goods from Holland is 200 per cent above prewar. American prices vary, leading manufacturers selling at $3 per dozen a more or less mythical valuation up to 146 DIGEST OF TARIFF HEARINGS, H. R. 7456. $4.25 during the war. To-day, some say the article can be obtained for $1.60 but the leading manufacturers ask $3. Under the rates pro- posed in H. E. 7456 the importer would be obliged to pay (on Ameri- can valuation) $1.20 duty per dozen, instead of 45 per cent under the Payne- Aldrich rates. " It would figure out about the same. Rates suggested. A decrease of rate on blown glassware to 15 per cent, on the ground that this is approximately equivalent to the duty of 45 per cent on the foreign valuation imposed by the Payne- Aldrich Act. PARAGRAPH 218 ; ALSO PARAGRAPH 1688 or SCHEDULE 15. ORNA- MENTAL GLASS. (See also Par. 230.) WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Otto W. Heinigke, representing the National Ornamental Glass Manu- facturers' Association of the United States and Canada. Hearings: Pages 5050-5058 of Schedule 15 (free list). Costs and selling prices. The labor cost of ornamental glass almost entirely determines the price of the product. Labor is 70 per cent of the cost. The difference between the prices on windows quoted by German manufacturers and the cost in American factories is $9.46 per square foot. As American manufacturers can not elimi- nate this difference, they would like to have ornamental glass on a specific rather than an ad valorem basis. A table of comparative wage scales follows: Wages i er hour. Germany. United States. Flesh' painter 10.20 $1.50 Draperv painter .16 1.00 Ornament painter... . . . . .14 .80 Glazier .14 .80 Comparing these wage scales, it is not surprising that a window which can be made in Germany and laid down in New York for $3.26 per square foot costs the American manufacturer $12.72 per square foot to produce. This becomes still more clear when it is added that 70 per cent of the total production cost, including over- head, is hand labor, no machine entering into any part of the work, and that 75 per cent of the raw material for the American window must be imported from England or Germany, and pay duty at not less than 35 per cent. Size of industry. The consumption in the industry varied from year to year prior to the war. One year it would total $500,000, in- cluding importations and manufactures, and another year it would go down as low as $200,000. DIGEST OF TARIFF HEARINGS, H. R. 7456. 147 Comparability. Archbishop Mundelem, of Chicago, writing of American-made windows, refers to them as " the richest and most artistic windows in any of our Catholic churches in this country." Rates suggested. The witness requests that, in paragraph 1688 of H. E. 7456, the words " including stained or painted window glass or stained or painted glass windows when imported by houses of wor- ship " be stricken out. The present bill, as reported to the House of Representatives, provided in paragraph 230 a 30 per cent duty on stained or painted glass windows, or parts thereof. This rate is not sufficient to protect the industry from German competition at the present rate of exchange on the mark. The committee is asked to take these churchmen at their word when they state in their brief that if they " were convinced that American manufacturers or Ameri- can workmen would suffer by the free importation of such articles they would not seek to combat the petitions presented to your com- mittee." PARAGRAPH 219. WINDOW GLASS. WITNESSES, AND INTERESTS REPRESENTED. FAVORING LOWER DUTIES : Mr. Otto W. Hammer, representing the Cramer Dry Plate Co., the Hammer Dry Plate Co., the Central Dry Plate Co., St. Louis, Mo. Mr. George A. Cramer, representing the George Cramer Dry Plate Co.. St. Louis. Mo. Hearings: Pages 1584-1588. Witness : Mr. Otto W. Hammer, representing the Cramer Dry Plate Co., the Hammer Dry Plate Co., and the Central Dry Plate Co. Costs and selling prices. Belgian glass can be imported at the present time for $8 per box. including all charges. This pays to-day a duty of 70 cents. Domestic manufacturers charge $9 per box. Size of industry. No data except that a limited amount of window glass suitable for photographic dry plates has been produced in the United States. The quality has not been satisfactory and only one concern is now attempting the manufacture. Comparability. Domestic goods are not equal to Belgian and the percentage of rejects is higher than for the foreign article. Rates suggested. Witness requests that in H. R. 7456 the specific rates on window glass not exceeding 150 square inches be retained at 1 cents per pound ; that the rate of the next bracket be reduced to 1 cents; the third bracket to If cents; the fourth bracket to 2J cents; the fifth bracket to 2| cents: the sixth bracket to 3 cents; all above that to 4 cents. The witness further suggests that a minimum ad valorem duty of 10 per cent be placed upon all goods above 150 square inches and that the proviso specifying that the rates shall not be less than 35 per cent ad valorem be eliminated. The witness compares Belgian glass at $8, less prest f^* T - A J 70 cents, with the domestic article selling for $9. Then, 35 per cent of $9 is $3.15, which, added to the bare cost of the foreign article, would raise the price to $10.25 per box. The duty is 70 cents per box under the Underwood bill. It was $1.05 to $1.10 under the Dingley 148 DIGEST OF TARIFF HEARINGS, H. R. 7456. bill and under the proposed tariff bill there will be an increase of 350 per cent. Remarks. There is no way of differentiating it has been tried between window glass for photographic dry plates and window glass for ordinary glazing. Photographic glass now selling at $9 sold before the war for $4.50 and during the war was as high as $13.25. The sizes used for photographic glass are as follows, in inches : 5 by ? , 6 by 8, 8 by 10, and 10 by 12. A few larger sizes, such as 11 by 14, 18 by 20. and 20 by 24, are used. Hearings: Pages 1588-1592. Witness : Mr. G. A. Cramer, representing the George Cramer Dry Plate Co. Cos-ts mid selling prices. Photographic glass can be obtained, f . o. b. Antwerp, for $6.50 per box, equivalent to $8 duty paid laid down in the United States. Domestic manufacturers are asking $9 for the same article f . o. b. factory. Size of industry. Four companies in the United States are manu- facturing dry plates. The Eastman Kodak Co. is the principal pro- ducer. The other three are the George Cramer Dry Plate Co., the Central Dry Plate Co., and the Hammer Dry Plate Co., of St. Louis, Mo. Comparability. The quality of American glass is not as high as that of the foreign glass. Rates suggested.-* Witness would eliminate the ad valorem mini- mum on all sizes under 150 square inches and reduce the duty to 10 per cent ad valorem on the other brackets. Again, the requirement relating to packing window glass in boxes containing 50 square feet instead of 100 is a hardship, because importations are received in boxes containing 100 square feet, thus saving the manufacturers of dry plates in this country an increase in packing charges and in freight rates. Witness would reduce specific rates to agree with those suggested by Mr. Hammer, of the Hammer Dry Plate Co. PARAGRAPH 223. MIRRORS. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Enos Porter, representing the Shelbyville Mirror Works, Shelbyville, Ind. Hearings : Pages 1592-1594. Costs and selling prices.- Mirrors are manufactured from a spe- cially selected quality of window and plate glass. Owing to a change in furniture styles, about 95 per cent of the mirrors now sold are plain. These are being offered by Belgian and French manufacturers at 11 cents a foot above the price of plate glass, while domestic costs for silvering amount to 22 to 25 cents a foot. Very few such mirrors have come into this country as yet. jSi?e>/ f industry. Witness represents 150 mirror factories in the Uniiecr-ijtates, with an invested capital of $8.000,000 to $10,000,000 and employing 4,000 to 5,000 men in normal times. Rates suggested. A rate of 10 cents per square foot on mirrors in addition to the specific rates provided for on the polished plate glass, unsilvered, provided that none of the foregoing shall pay a less duty than 35 per cent ad valorem. DIGEST OF TARIFF HEARINGS, H. R. 7456. 149 PARAGRAPHS 225, 226, 227, AND 228. OPTICAL GLASS AND INSTRU- MENTS. WITNESSES AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Harvey N. Ott, representing the Spencer Lens Co. Bauson & Lomb Optical Co., Rochester, N. Y. (Brief.) The Libbey Glass Manufacturing Co., Toledo, Ohio. (Brief.) Hearings: Pages 1594-1595. Witness : Mr. Harvey N. Ott. Costs and selling prices. The average cost of manufacturing crude optical glass in witness's plant at the present time is $2.43 per pound. Assuming that the proposed 35 per cent ad valorem duty is enacted on American valuation, foreign dealers could still lay down their material in the United States market for $2.20 per pound. This figure is based on quotations offered to dealers in the United States at the present time. Optical instruments of German manufacture are being sold here at prices considerably higher than those obtained in the German mar- ket. Witness cited the case of a visitor to Berlin obtaining a price on a German instrument at 900 marks, or approximately $12. This in- strument sells here for $36 and the difference goes into the pocket of the German manufacturer. Another instrument, costing in Ger- many $21.75 per dozen retail, is sold for export to America at $52.40 per dozen wholesale. This difference can be decreased or increased at will by combinations of manufacturers to neutralize the effect of tariffs levied here and in other countries. The German instrument workers struck last January to obtain an increase in wages from 7 marks to 8-J marks per hour. They now receive 12 or 13 cents an hour, while skilled workers here receive from 30 to 75 cents. Rates suggested. A duty of 50 per cent ad valorem in place of the proposed rate of 35 per cent on optical glass and 45 per cent ad valorem in place of the 35 per cent on optical instruments. Witness: Bausch & Lomb Optical Co., Rochester, N. Y. (Brief; no appearance at hearings.) Costs and selling prices. In nearly all optical products the pro- portion of material averages approximately 25 per cent, and labor 75 per cent. Comparability. The labor scale in England and Germany com- pared to the United States is in the ratio of at least 1 to 4 in the first instance, and more than 1 to 10 in the second instance. Prices for corresponding commodities were given in a brief presented to the Committee on Ways and Means on January 6, 1921. Comparison of prices shows a very large differential in favor of European makers, which only a tariff based on the American valuation plan can equalize. Attention is directed to paragraph 573 of the act of 1913 permit- ting the duty-free importation of philosophical and scientific ap- paratus for religious, philosophical, educational, scientific, or mili- tary purposes, etc. This is a most vicious blow to American industry. Bad enough before the war when exchange values were normal, it is under present conditions prohibitive, and if permitted to exist will 7713422 11 150 DIGEST OF TARIFF HEARINGS, H. R. 7456. close the shops to American labor. It is asked that this clause be eliminated, and that a duty be provided which will encourage the manufacture and further development of apparatus in this country. NOTE. This feature is provided for in H. R. 7456, paragraph 360, at 40 per cent ad valorem. The brief gives a list of manufacturers of different optical products in England, France, and Germany. Remarks. The brief calls attention to the importance of the in- dustry in the conservation of vision, in the preservation of health, in industrial research, in educational work, and in the preservation of peace. Competition comes principally from Europe : England in the manufacture of glass and optical instruments; France in similar apparatus and lenses for eye use ; and Germany in a general supply of optical products. It is the latter competition that was the most severe prior to the war and is aorain making extreme efforts to re- capture the American market. The manufacture of optical glas? is a key industry, as no optical instruments can be made without this product. Before the war no optical glass was made in this country ; the necessity of war products developed the industry, and without substantial protection it can not be maintained. Witness: The Libbey Glass Manufacturing Co., Toledo, Ohio. (Brief; no appearance at hearings.) Size of industry. Prior to 1914 the market for gauge glass, both high and low pressure, was entirely controlled by imports from Germany, England, and Scotland. German glass was developed be- yond the others, and was conceded to be superior, especially in ten- sile strength and resistance. It was used by the Xavy Department and the leading railroads. Beginning in 1916, when the situation became acute, owing to the shortage of foreiam supplies, the Libbey Co. engaged in extensive experiments, resulting in the development of a glass equal to any on the market. It has passed the tests of the Navy Department. Germany is now making efforts to regain the trade she formerly held, and is selling glasses in this country at prices far below prewar quotations. Rates suggested. It is requested that the gauge glass industry be considered in a class with optical glass, and given protection suffi- cient to allow it to survive" the infant stage. PARAGRAPH 230. STAINED GLASS. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OF HIGHER DUTIES: Mr. Otto Heinigke, representing National Ornamental Glass Manufacturers, New York City. Artists, painters, and lead glaziers engaged in the manufacture of stained glass windows, in Philadelphia. (Brief.) Hearings : Pages 1595-1600. Witness: Mr. Otto Heinigke. Costs and seUing prices. Labor in the United States for the stained-glass window industry averages $1 per hour. Floor painters receive $1.50, as against 20 cents in Germany. The entire manufac- turing operation is handwork, no machinery being used or possible. Labor forms 70 per cent of total cost of production. DIGEST OF TARIFF HEARINGS, H. R. 7456. 151 Siee of industry. In 1914. the production of stained-glass windows in the United States amounted to $212,000. In 1920, owing to the exclusion brought about by the war, the production had increased to $500.000. To-day orders have been placed in Germany to the extent of $800.000 and domestic plants are running at 30 per cent capacity. Comparability. American stained-glass windows are comparable to any produced abroad. Rates suggested. On stained-glass windows, 63 per cent ad valorem and the elimination of the provision of paragraph 1688 per- mitting the importation of stained-glass windows without payment of duty if imported for presentation to houses of worship. The sug- gested ad valorem rate was obtained by a comparison of costs on the same window manufactured in the United States and in a representa- tive German plant, as explained in detail in the Ways and Means Committee hearings, page 1673. Unless paragraph 1688 is amended to exclude glass windows the industry can not survive in this country, because the sale of windows to houses of worship constitutes over 90 per cent of the entire trade, and foreign manufacturers are conse- quently competing on a practically free-trade basis. The same witness filed a brief (Appendix, p. 5296), suggesting that the words " $9.46 per square foot " be included in paragraph 230, line 2. between the words " thereof " and " all." This is based on the difference in the cost per square foot between the German and the United States window of the type almost exclusively* im- ported $3.26 and $12.72, respectively, with the German mark's fig- ured at 2 cents. Cost sheets bearing on this comparison were sub- mitted to the Committee on Ways and Means, as shown on pages 672 and 677, part 1, of hearings. The brief also suggests a change from an ad valorem to a specific duty, a principal reason being the fact that all contracts for church windows include the cost of transportation and erection. The brief records an invitation from a foreign manufacturer to a representa- tive of the witness's association, asking all its members to close their American factories and become selling agents for the German factory. Witness: Artists, painters, and lead glaziers engaged in the manufacture of stained glass windows in Philadelphia. (Brief; no appearance at hearings.) Comparability. The high standard of living in the United States necessitates a higher wage than the lower standards of living in Europe. American manufacturers can not maintain this standard, essential to American life, and at the same time compete with Euro- pean manufacturers. At the present time, there is a great scarcity of orders placed with American manufacturers, as importers are taking orders at such low prices that competition with .them is im- possible. The result is that American factories are emptv; Ameri- can artists, painters, and lead glaziers are idle, while Europe is busily reaping the harvest made possible through a low tariff, in- cluding windows on the free list. These windows are made almost exclusiA-ely for the use of religious houses of worship and public buildings, and to place them on the free list when so used means that there is no protection at all given to the American manufac- turer and to American labor. 152 DIGEST OF TARIFF HEARINGS, H. R. 74-56. Rates suggested. The tariff placed upon stained glass windows. for use in houses of worship or otherwise, should be such as will overcome the difference in costs between American and foreign pro- duction. PARAGRAPHS 232 AND 235. LIMESTONE, MARBLES, ETC. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. H. S. Brightly, representing Indiana Limestone Quarrymen's Associa- tion, Bedford, Ind. Hearings : Pages 1600-1605. Costs and setting prices. The witness states that foreign produc- tion costs (Bath, England, limestone) plus freight to Atlantic sea- board points is less than the freight rates from Indiana to the same markets. The selling price of Indiana limestone at the quarries varies from 45 cents to 75 cents a cubic foot. The cost of imported marbles varies from 70 cents or less to about $2. The labor cost in domestic quarries is about 50 per cent of the total or Sl\ cents as an average. The labor cost abroad, in quarries using American machin- ery, is 15 cents a cubic foot. Workmen in England get 29 cents an hour as compared with an average of 60 cents here. Freight rates to New York are 80 cents a cubic foot from Indiana; to Boston. 84 cents; to Philadelphia, Baltimore, and Washington, 76 cents. Rates suggested. Monumental and building limestone should be classified with marble, breccia, and onyx in paragraph 232, being similar to these products and competitive with them. This would mean a change in classification from paragraph 235 to paragraph 232. PARAGRAPH 235. UNPOLISHED GRANITE, WITNESS. AND INTEREST REPRESENTED. FAVORING LOWER DUTIES : Mr. Seward W. Jones, representing Jones Bros. Co. and Cook. Watkins & Co., Boston, Mass., and Barre, Vt. Hearings : Pages 5299-5315. Costs and selling prices. Last year, with exchange at $3.90 per pound, the witness imported a certain design of granite which cost, delivered Boston, Mass., duty paid, $125. This design was sent to six manufacturers in Minnesota and their average price for it was $114.83. The witness's company produced it for $97.23. The present selling price, with a 25 per cent ad valorem. duty, foreign value, on design No. 30861, in Beers red granite, including a profit of 13 per cent, is $179.74. The present selling price on the same design, in simi- lar domestic merchandise freely offered, is from $95 to $140. Design No. 967, magna red imported monument granite, sells for $157.77 in the United States, to net 10 per cent. The same design of granite from Barre. Vt., netting 10 per cent, sells for $144.89. The wages paid in the Minnesota district are a minimum of $6 per day, and the wages paid in New England are a minimum of $8 per day, or $1 per hour. Size of industry. Jones Bros. Co. have a capital of $500.000 in- vested, and operate three quarries, forming probably the largest DIGEST OF TAEIFF HEARINGS, H. R. 7456. 153 granite plant in the United States. They formerly employed 230 men, but now employ only 40. The industry is employing about 25 per cent of the normal number of employees, and the witness has no doubt that on the 1st of January (1922) it will close down entirely. Cook, Watkins & Co. have about $200,000 invested. The Jones Bros. Co. imported last year about $20,000 worth of granite out of a total business of $600,000 to $1,000,000. Comparability. The witness exhibited the principal imported granites a jet black, a green, a very dark green, and a reddish green granite and stated that " we have no granites in this country like these.*' The only reason for importing is to give variety. Rates suggested. An increase in the duty on granite monuments is unnecessary. The present ad valorem duty of 25 per cent prevents the importation in any sizable quantity, and to increase the duty, or to have it based on American valuation, would kill the sale and deprive the Government of revenue. Certainly, American manufacturers of granite monuments do not need protection, as is shown by the various comparative costs. An increase to 25 per cent or 40 per cent Amer- ican valuation, would defeat the only remaining reasons for a tariff, namely, revenue. The witness therefore recommends that the present tariff of 25 per cent ad valorem on granite be maintained or, if Amer- ican valuation is adopted, the rate should be reduced to correspond with the present 25 per cent duty on granite monuments. SCHEDULE 3. METALS, AND MANUFACTURES OF. PARAGRAPH 301. PIG IRON AND SCRAP. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. John W. Logan, representing the Alan Wood Iron & Steel Co., Phila- delphia, Pa. Hearings : Pages 1631-1633. Witness : Mr. J. W. Logan, representing the Alan Wood Iron & Steel Co. Costs and selling prices. Of the selling price of pig iron to-day 70 per cent represents transportation. The transportation charge in Pennsylvania on a ton of pig iron is greater than the entire selling price of basic pig iron in Belgium, and greater than the price of pig iron sold in eastern markets in 1914. In 1914 pig iron was sold and delivered in eastern Pennsylvania for $14 a ton. At that time the transportation charges represented about 50 per cent of that sell- ing price. To-day, pig iron is selling at from $19 to $20 a ton, 70 per cent of which represents transportation. This transportation is represented by the freight rates on Lake Superior ore and on coal and limestone*. The Iron Trade Review of August 4, 1921, quotes Belgian basic pig iron at 175 francs per metric ton, equivalent to $13.30 per ton. Belgian pig iron can be delivered on the Atlantic seaboard for this price, plus not over $5 per ton. Scrap iron and steel, unlike pig iron, is not a manufactured prod- uct, but results from the tearing down of buildings, etc., on account of obsolescence or otherwise. Scrap iron ordinarily sells for about tw r o-thirds of the price of pig iron. 154 DIGEST OF TARIFF HEARINGS, H. R. 7456. Rates suggested. Restoration of the duty of $2.50 per ton on pig iron contained in the act of 1909. The duty on scrap should be at least $1.50 per ton less than the duty on pig iron. ALLOY ORES. PARAGRAPH 302. SILICON. WITNESS, AND INTERESTS REPRESENTED. FAVORING LOWER DUTIES: Mr. Harold H. Burton, Cleveland, Ohio, representing Dr. Aladar Pacz, director of scientific research, Alpax Research Laboratories, of Cleve- land ; the General Aluminum & Brass Manufacturing Co., of Detroit ; Mr. J. W. Knapp, of the Precision Dye Casting Co., of Syracuse, N. Y. ; the Hon. William L. Day, formerly judge of the United States District Court for the Northern District of Ohio, and now associated with Dr. Pacz in the development of silicon and aluminum alloys; Thomas E. Monks, Cleveland, Ohio, vice president of the Guardian Savings & Trust Co. Hearings: Pages 1633-1641. Costs and selling prices. Silicon, used in the manufacture of Alpax alloy, a combination of silicon and aluminum (85 per cent aluminum and 15 per cent silicon), sells at present at 14 cents per pound. In its production, by means of water power, from silica sand the labor cost is a negligible quantity. Size of industry. In the United States there is only one consumer of silicon the General Aluminum & Brass Manufacturing Co. While ferrosilicon has been manufactured in large quantities in the United States, silicon metal, or silicon with 5 per cent or less of iron, has been produced in this country in extremely limited quantities. Practically all silicon metal has been imported from France and Switzerland. Rates suggested. The free importation of metallic silicon is recom- mended. Amend paragraph 302 by striking out the words " and sili- con metal " immediately following the words " 90 per cent or more of silicon " in line 20 on page 40 of the Fordney bill, and by inserting in the paragraph after the word "therein" in line 22 on page 40, the words " Provided, however, that silicon containing 5 or less per cent of iron shall be classified as silicon metal and that no duty should be imposed upon it or upon its silicon content." The witness contends that silicon metal or silicon containing 5 per cent or less of iron is entirely distinct from ferrosilicon. used in the manufacture of steel. The market for silicon metal depends solely upon the silicon aluminum alloy known as Alpax. Silicon is now being manufactured, among other places, in France and in Switzerland, and it is being purchased at 14 cents per pound by the General Alumi- num & Brass Manufacturing Co., the principal present licensee under the United States Alpax patent. The Fordney bill, by placing a duty of 8 cents per pound on this grade of silicon, would raise the price of silicon metal from 14 cents to 22 cents per pound. Remarks. In a letter of September 22, 1921, addressed to the chair- man of the Senate Committee on Finance, Mr. Frederick M. Becket, chief metallurgist of the Electro Metallurgical Co., Xew York City, takes exception to certain statements made by the witness. In par- ticular, be characterizes as " absolutely erroneous " all statements, DIGEST OF TARIFF HEARINGS, H. R. 7456. 155 whether in testimony or in brief, to the effect that "silicon metal containing 5 or less per cent of iron has not been obtainable in the United States up to a date as late as July of this year." After referring to interviews and correspondence embodying com- mendation, on the part of Dr. Pacz, regarding researches and experi- ments in this field by the Electro Metallurgical Co. Mr. Becket points out that Dr. Pacz, in the face of his commendation, is now asking that this substance come in free. Mr. Becket goes on to say that, since September, 1920, his company has regularly furnished to manufac- turers of aluminum -silicon castings, a high-grade silicon alumi- num alloy containing approximately 60 per cent silicon and 40 per cent aluminum, guaranteed to have an iron content of not over 1 per cent, and during 1921 the company has furnished to those manufacturers for the same purpose silicon metal containing less than 1 per cent iron and over 97 per cent silicon. In January, 1921, the company had in stock about 300,000 pounds of the last-named product. Moreover, the company has produced silicon metal in com- mercial quantities containing over 98 per cent silicon and less than one-half of 1 per cent iron. PARAGRAPH 302. MAXGAXESE ORE. WITNESS, AND INTERESTS REPRESENTED. FAVORING ntwusED OR HIGHER DUTIES : Mr. Charles W. Potts, representing himself and producers of manganiferous ores in Minnesota and of high-grade manganese in Arkansas ; address, Deerwood, Minn. Hearings : Pages 1675-1696. Size of industi*y. The witness had been induced by Government requests and demands to enter the mining of manganese, and the com- panies now represented have spent about three-quarters of a million dollars in attempting to produce these manganese ores. Under the stimulus of governmental demands in war time, $15,000,000 was in- vested in developing the manganese-ore industry. Reserves. After stating that there are 30 States in the Union in which manganese ore is known to exist, the witness referred to maps showing the method employed in investigating the mineral deposits of the properties in which he and his associates are financially inter- ested. He laid stress on the accuracy of the work which led him to conclude that there are reserves amounting approximately to 10,000.000 tons of high-grade manganese ore containing about 40" to 50 per cent manganese 20,000,000 tons of ferruginous manganese ore, containing from 10 to 35 per cent manganese, and 36.000,000 tons of manganiferous iron ores. He expressed the belief that if those ores were all utilized in the steel business, as he believes to be possible, the manganese reserves of the country would last as long as the iron- ore reserves. In his brief Mr. Potts states that the data accumulated point toward a reserve tonnage of domestic manganese ore as follows : Tons. High-grade manganese. 35 per cent and over 10, 000, 000 Ferruginous manganese, 10 to 35 per cent 20,000,000 Manganiferous iron ore, 5 to 10 per cent manganese 45,000,000 156 DIGEST OF TARIFF HEARINGS, H. R. 7456. Sixty times as much ore had been taken out of the Butte district as the Government geologists conceded to exist there and, according to commercial estimates, there are several million tons of high-grade manganese ore still remaining. It should be borne in mind, the wit- ness said, that there are 462 other districts in the United States capa- ble of producing manganese ore. The Tariff Corn-mission's report on manganese No. 21, 1920. Re- marking that the purpose of any report is to achieve a result of con- servative accuracy, the witness alleged that an obvious injustice had been done in No. "21 of the reports of the United States Tariff Com- mission for 1920. There were, he continued, so many- inaccuracies in the statements, and the method of presenting data was so irregular, that it is unsafe to accept the statements and reports therein con- tained as final and conclusive. He characterized as incorrect the state- ment that there were in this country in 1918 only 699,750 tons of high- grade manganese ore, with an additional tonnage of 1,130,000 tons. That estimate was based on the Geological Survey and various other publications, a number of which are five or six years old and out of date as far as manganese ore reserves in this country are concerned. While part of the information is taken from publications dated in 1918 or later, much of it is compiled from investigations made years previously and before the extensive development of manganese min- ing in 1918. Other parts, obtained by superficial investigations hurriedly made during the war period, do not reflect the accuracy required by operating mining companies. The report, while citing Mineral Industry, a highly accredited publication, fails to take into account the context of the cited report. According to the brief, the body of the Tariff Commission's report on the manganese situation is unfair to that industry in not accu- rately quoting the authorities it cites and in the method employed in presenting data. The inaccuracies are interwoven with reliable data in such a manner that close scrutiny is required by anyone not inti- mate with the subject to differentiate between sound and unsound conclusions, " the effect of which is primordially inimical to the man- ganese industry of the United States." According to the report, " the amount of high-grade ore * * * in sight has been estimated at only 699,750 tons, with 1,130,000 tons more in prospect." This quotation of the authority cited (U. S. Geol. Sur., 1918) is inaccurate and, without close scrutiny, leads to the unsound conclusion that the only ore that can be expected is the minimum tonnage quoted. The brief states that there is not much difference between the Brazilian ores, fallen below the old standards until anything over 40 per cent is acceptable, and the domestic high-grade ores " about 40 per cent," yet such facts are either withheld in part or presented in such a manner that the closest scrutiny must be employed to pre- vent a perverted conclusion. Furthermore, information from re- liable sources, favorable to greater tonnage of reserves, is classified in the report as " unauthenticated " and relegated to obscure foot- notes. Again, in spite of their importance, the ferruginous man- ganese ores are confused with the lower grades and their existence is ignored in the report. The iron content of the manganiferous iron ores and the ferru- ginous manganese ores is of great economic importance, yet the re- DIGEST OF TARIFF HEARINGS, H. R. 7456. 157 port makes no mention of that fact. The failure to state that the other constituent of these ores is iron rather than useless rock does an injustice to the subject of reserves and does not achieve the con- servative accuracy expected in an unbiased report. Reports of the United States Geological Survey Government cal- culated estimates contrasted with the facts. According to the re- ports of the United States Geological Survey, the figure 699.750 rep- resents the total tonnage of domestic high-grade manganese ore re- serves actually proved in 1918, and is still considered by the Survey and the Tariff Commission as the only authentic estimate. The brief assumes that the Government geologists have approached the investi- gation of domestic reserves with pessimism, and goes on to refer to a visit paid by the witness to the geologist of the Geological Survey who examined the Arkansas district and whose estimate of the man- ganese ore of the Batesville (Ark.) district was about 250,000 tons. He gave the witness the figures of his estimates of various properties, mentioning one being operated by the witness. According to the geologist's estimate of a certain grade of ore, there were only 2.000 tons on that particular property, although last year, in a little over 60 days. 2,600 tons were mined with work barely started. From the available data the witness believes that property to have more ore on it than the report of the Geological Survey credits to the whole Batesville district of Arkansas. The World Atlas of Commercial Geography, published this year, 1921, is compiled from information available in 1913, and the latest report issued on manganese and manganiferous ore reserves in the United States, dated April 6, 1921, is based upon out-of-date infor- mation. The witness referred in his testimony to investigations and reports made by E. C. Harder and D. F. Hewitt, geologists of the Geologi- cal Survey, in 1918, showing domestic reserves of manganese ore amounting to 699,750 tons, including 2,800 tons in the Butte district of Montana. Their report had been printed and reprinted four times up to April 6, 1921, the Butte volume of 2,800 tons appearing each time, although 166,650 tons had since been shipped from that district, as shown by reports of the Geological Survey. This 166,650 tons was manganese ore. Referring to another portion of the Geological Survey reports of 1918 describing the deposits in the Butte district, the witness drew attention to the statement made that while no good basis exists for computing the exact tonnages, descriptions given by those who have had opportunity to observe them leave no room for doubt that the aggregate amount of such bodies is very large. In spite of that statement, he remarks, these large deposits of manganese were totally ignored by the writers when tabulating the total domestic reserves. After claiming to have proved that the Geological Survey esti- mates of reserve tonnages of manganese ore in the United States are inaccurate and that all of these inaccuracies tend to minimize the tonnage and importance of domestic grades, the brief describes as unfair any estimate of the life of domestic reserves which does not take into account all classes thereof and all satisfactory metallurgi- cal practice. The brief proceeds to refer to data collected within the last few months proving that the tonnages of reserve ore are vastly 158 DIGEST OF TARIFF HEARINGS, H. R. 7456. in excess of Government estimates. in practically every instance in which a check has been made. Thus, a mine in the Batesville district of Arkansas, credited with onh' 5,000 tons of high-grade managanese ore, has been proved by the owners to contain 45,000 tons with an approximate 50 per cent metal- lic manganese content. They also claim 75,000 tons of probable ore and 350,000 of possible ore as a result of their investigation. Another mine comprising 600 acres in the Batesville district of Arkansas, credited with 2,000 tons of ore of a certain grade, in addi- tion to 10,000 tons of high-grade ore, gives indications of a total ton- nage of approximately 2,500,000 tons. Of this approximately 125,000 tons is high-grade manganese ore of over 46 per cent metallic man- ganese. The reports of the Geological Survey for the entire Batesville dis- trict estimate manganese reserves as follows: Ten thousand tons of high-grade ore, with an additional reserve prospect of 160,000 tons, and a tonnage of 160,000 tons of ore containing 5 to 35 per cent man- ganese. As against this the brief cites the sworn statement of a min- ing engineer familiar with the district, claiming the existence of ap- proximately 5,000,000 tons of ore containing 35 per cent or more of manganese. As regards the Geological Survey estimate of 2,800 tons of high- grade manganese ore for the Butte district of Montana, the owners of one mine give the tonnages of their property as follows: Devel- oped ore, 198,000 tons ; probable ore, 800,000 tons ; possible ore, 840,000 tons; making a total of 1,850,000 tons of proven ore and additional ore in prospect, grade 37 to 40 per cent. In the case of the Cuyuna Range in Minnesota, 25 properties are estimated in the Geological Survey's report to have contained in 1917 13,628,000 tons of manganiferous ore ranging from 5 to 35 per cent manganese content. According to the estimates of a prominent ex- plorer and developer of this range, who has put down approximately 700 drill holes in the district, there are approximately 36,000,000 tons of this grade of ore disclosed, with an additional tonnage in prospect bringing the amount to between 50.000,000 and 60,000,000 tons, of which 25 per cent carries more than 12 per cent metallic manganese. The result of up-to-date investigations is to prove that the reserves of high-grade manganese ore are approximately 10,000,000 tons ; that there are approximately 20,000,000 tons of ferruginous manganese ores ; and that ores of this class contain 10 to 35 per cent manganese and sufficient iron ore to make them highly advantageous in steel making. Similar investigations prove that the Cuyuna Range of Minnesota has a vast tonnage of manganiferous iron ores, all of which have been satisfactorily used in steel making. Rates suggested. The schedule in the Fordney bill as approved by the House meets with witness's approval. If this duty of 1 cent per pound on the metallic content is retained in the bill, the domestic- mines will be able to supply from 50 to 75 per cent of the annual re- quirements during the first few years and eventually the entire yearly requirements. All ore containing 15 per cent or more of manganese should be included in this schedule. Unless the manganese-bearing ores containing manganese down to 15 per cent are made dutiable, importers would be able by manipulation and mixing to bring in vast quantities of foreign manganese and thus evade the law. It is also DIGEST OF TARIFF HEARINGS, H. R. 7456. 159 important that the manganese alloys be protected, in order to pre- Tent foreign manganese from flooding American markets. PARAGRAPH 302. MAXGANESE-BEARING ORE. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES: Mr. George H. Crosby, representing himself, as discoverer and explorer of minerals; address, Duluth, Minn. Hearings : Pages 1669-1674. Size of industry. Since the discovery of the Cuyuna iron and man- ganese range about 2,800 holes have been drilled, varying in depth from 60 to 1,000 feet. Of these 2,800 holes, the witness personally drilled 700 on something like 20 properties, 8 of which have become producers of manganese-bearing ore. During 1918 there was shipped from the Cuyuna Range 860,000 tons of manganese-bearing ore. From all localities there was shipped 305,000 tons of high-grade man- ganese ore, running 40 per cent or better. Upward of $7,000,000 has been spent in development on the Cu- yuna Range, and at the present time only 2 mines are operating, against 24 during 1918 under war demand. Out of 23 mines on the range producing manganese ore, there is not one running and producing ore to-day. Out of 39 mines on the range formerly producing manganese and iron ore, there are only 2 mines running. The witness personally spent, in trying to produce manganese for war purposes, $1,450,000 in the development of mines in Minnesota. tfeserve. The reserves in the United States are as follows : Thirty- six million tons of ferruginous manganese ore, over 20,000,000 tons of high-grade manganese ore running over 40 per cent manganese. Ap- proximately 25 per cent of the 36,000,000 tons, or 9.000,000 tons, of the manganese-bearing ore of the Cuyuna Range contains manganese 12 per cent or better. The other 75 per cent of the manganese-bearing ores. 27.000,000' tons, contains approximately 7 per cent manganese. This 75 per cent is all capable of utilization in making high-manga- nese pig iron. According to the reports issued by the Geological Survey, there are only 13.628,000 tons of manganese-bearing ore, containing 5 to 35 per cent manganese, in the Cuyuna Range district. No fig- ures are'given for any additional reserve in prospect. There were in 1913, 24 mines on the Cuyuna Range producing or preparing to pro- duce manganese-bearing ore. The witness can name two out of this group that contain more ore than the Geological Survey says exists in the whole district. The Sagamore contains 11,000,000 tons; the Ida May, 4,000,000. The proved tonnage of Cuyuna Range is 36,000,000 tons. The Government report minimizes the importance of the ores of the Cuyuna Range by ignoring the probable ore. There is an additional tonnage of probable ore, not capable of defi- nite calculation but of certain esfcstence, which would undoubtedly increase the reserve tonnages to approximately 50,000,000 tons. Practice. Standard grades of iron ore contain almost no manga- nese. The prevailing furnace practice consists in adding the manga- nese at the time of pouring the steel. When they use 80 per cent 160 DIGEST OF TARIFF HEARINGS, H. K. 7456. ferfomanganese. they use about 15 pounds to the long ton in the bath, added in lump form while the steel is in the molten state. It is not added for hardening properties but for its purifying effect. If the prevailing practice utilized the manganese-bearing iron ore, no tariff would be needed to protect it, but the steel manufacturer pre- fers to use the manganese ore coming from foreign mines instead of the domestic supply. The manganese content of the manganese-bearing ores is capable of utilization in the manufacture of steel. Two different methods have been practiced, one comprising the manufacture of a manga- nese alloy known as spiegeleisen, used in the Bessemer process of steel making; the other in the making of high manganese pig iron, which also has been used in steel making. This eliminates the add- ing of manganese to the steel bath at the time of pouring in the large amounts now used where all the manganese is added in the form of 80 per cent ferromanganese. There are numerous publications tend- ing to prove that this practice is entirely satisfactory, producing a steel of a better grade than that produced by other practices. Equivalent. The average content of manganese in the 36,000,000 tons of manganese-bearing ores of the Cuyuna Kange district of Minnesota is about 9 per cent. Thirty-six million tons of 9 per cent manganese-bearing ores is equivalent to approximately 5,000,000 tons of high-grade manganese ore containing 45 per cent manganese. Kates suggested. Unless manganese ore has a protective tariff. the domestic mine owners and operators will be obliged to abandon their properties, as they can not compete with the cheap mining costs of ores from Brazil, India, and Russia, where low labor costs pre- vail. The witness would have the minimum grade placed at 20 per cent instead of the 30 per cent proposed in the bill. At 30 per cent it would permit Spanish ore to come in free, as Spain has large quantities of ore of the same character as that in the Cuyuna Range. This Spanish ore is mined with cheap labor and transportation, and its admission would affect the domestic industry. PARAGRAPH 302. MANGAXESE ORE. Witness: Mr. George Otis Smith, Washington. D. C., United States Geological Survey. Comment on the charges of Mr. C. W. Potts. In communications dealing with Mr. Potts's testimony and brief, the director of the Survey characterizes as untrue Mr. Potts's charges that the Survey's estimates of manganese ore reserves are based upon superficial exami- nations and obsolete reports, and that the examinations were under- taken with pessimism. The further charges that the reports of re- serves in the Butte district are not consistent with reports of pro- duction and that data from the World Atlas of Commercial Geology were based upon material available in 1913 are not only untrue but arise out of Mr. Potts's very superficial examination of and careless reference to the respective publications. Mr. Potts has refused, for the present at least, to give the Survey access to the data and methods by which his estimate of 10,000,000 tons of 42 per cent ore was reached. Further, by partial statements and by the incorrect use of data submitted to him, he has reached conclusions which are ob- viously unsound. DIGEST OF TARIFF HEARINGS, H. R. 74-56. 161 There is fair assurance of the existence in domestic deposits of about 1.800,000 tons of material containing more than 35 per cent manganese a quantity sufficient to make about 75,000,000 tons of steel by present practices. If the larger reserves of lower-grade material be considered, making proper allowance for necessary ad- justments in steel plants and processes, the combined reserve's are probably sufficient to make about twice as much steel, or 150,000,000 tons. The Survey's estimate contains two figures one of dependably re- coverable quantities, and the other of additional reserves in pros- pect. That there may be more manganese ore in the United States than the sum of these two quantities has not been denied by the Survey. It has simply been stated that in the light of the work done during 1917 and 1918, including search, exploration, and examina- tion, it seems highly improbable that there is twice as much as the 1.800,000 tons of high-grade manganese ore included in this estimate. The testimony and Ii4ef of Mr. C. W. Potts. Mr. Potts admitted to Mr. Hewett, a representative of the Geological Survey, that he ob- tained his estimate by multiplying the Survey's estimate by a factor ; he flatly refused, however, to show Mr. Hewett the data or to explain the methods by which he arrived at his own estimate of manganese reserves. Answer to Mr. Pottos objections to the Survey estimate of man- ganese reserves. 1. In the paper by Messrs. Harder and Hewett, of the Survey, to which frequent reference was made by Mr. Potts, it is stated: "This part of the work (estimation of reserves) was approached with a certain apprehension, for it was recognized that for most dis- tricfls neither the extent of explorations nor time available for the work would permit the order of accuracy that most mining com- panies require as guides in operating." This statement is clearly the basis for Mr. Potts's charge that the investigations were ad- mittedly superficial (p. 1677) and that the work was not thorough (p. 1686). Appended to Mr. Smith's comments is a tabulated summary of reserves prepared by Messrs. Harder and Hewett, discriminating be- tween " detailed " and " reconnaissance " work and indicating whether or not estimates might warrant review. This is alluded to as show- ing that the examinations were not superficial. Of the 1,181 deposits considered, 588 lie in districts where the work was of detailed character, involving the preparation of geologic maps. It will be noted that the reserves of high-grade ore in these districts make up 80 per cent of the total in the United States, and almost the entire amount of the additional reserves in prospect if the carbonate ore of the Butte district be omitted. The reconnoissance work was done in districts mostly offering small promise of reserves of high- grade ore, although a number of districts containing low-grade ore were considered in this manner only. The Survey has never had any doubt that the reserves of low-grade manganese ore were adequate to meet any needs that the steel industry would impose for some years to come. 2. It is stated (pp. 1684 and 1694) that the data upon which the Survey's estimates of reserves are based are obsolete. 162 DIGEST OF TARIFF HEARINGS, H. R. 7456. It should be stated in this connection that, of the nine regions cited, subsequent reports to the Survey show that little or no exploration work was done after examination by the Survey geologists. An analysis of the table of reserves prepared by Messrs. Harder and Hewett shows that of the total estimate of high-grade reserves, 417,000 tons, or approximately 60 per cent of the proved total, are in districts where the field work was completed as late as June. July, August, September, and October, 1918. After considering the table of reserves in the light of the reports submitted to the Survey by mine operators up to the end of 1920, it appears that the estimates for the districts containing more than half of the reserve of high-grade ore are still reliable. In several of the districts containing the remainder, recent work has probably justified an increase in the estimates. 3. It is indicated by Mr. Potts (pp. 1690 and 1691) that the pro- duction reports are not consistent with the statements of reserves. Although it was stated by him that the Survey has never changed an estimated reserve of 2,800 tons of high-grade ore in the Butte district, he admitted to Mr. Hewett that he had never read the fol- lowing footnote to the table where this figure appears : " All recorded deposits of oxide ores examined; estimate does not include large deposits of carbonate ore, 35 to 38 per cent manganese." Mr. Potts further stated that he had not read the original report from which the Butte estimates are taken and in which it is stated : " The known workable bodies of this ore (carbonate) aggregate several thousand tons and there is reason to expect that further developments will disclose large additional amounts." A more recent report contains this statement : " The quantity of rhodochrosite ore reported as actu- ally developed early in November, 1918, was more than 125,000 tons. To this reserve should be added an unknown and presumably very large amount in prospect. In addition, the lodes contain an almost unlimited quantity of low-grade material consisting of the carbonate and silicate of manganese and quartz mixed in different proportions. This constitutes a reserve from which, if the necessity arose, the country's needs might be largely supplied." Although a definite estimate has not been assigned to the reserves of carbonate ore in the Butte district, the knowledge concerning these bodies has been taken into consideration in summary state- ments concerning the prospective production from domestic 'sources. Great dependence has never been placed by the Survey on a large part of the reserves of the district, even at the prices prevailing dur- ing the war, because it has no record that any qualified engineer or geologist has stated that the bodies could be explored profitably for manganese ore alone. The entire production of carbonate ore from the Butte district to date has come from mines which have been thoroughly explored, in advance, to extract bodies of copper and zinc ore. No charges for development of the bodies have, therefore, had to be borne by the production of manganese ore. Mr. Smith goes on to note that Mr. Potts refers several times (pp. 1677 and 1692) to two mines in the Batesville district hav- ing produced more ore than the reserves assigned by the Survey geologist to them. The only explanation that can be offered at pres- ent is that the estimate for these particular mines was low. Such a discrepancy does not necessarily indicate, however, that the total es- timate for the district was low. DIGEST OF TARIFF HEARINGS, H. R. 7456. 163 4. Mr. Potts makes statements (pp. 1678 and 1684) tending to show that recent reports of the Survey concerning mineral produc- tion and reserves of manganese ore are old and out of date. To sub- stantiate that claim he cites the World Atlas of Commercial Geology, published in 1921, and states that " the data upon which this report is based were compiled from information available in 1913." Not only does this publication, the first of its kind, contain practically complete information concerning mineral production throughout the entire world for the year 1918, not available until late in 1919, but Mr. Potts admitted to Mr. Hewett that he had never read the text on manganese in this report, nor a table in it, but made the state- ment on the basis of a reply to a question of his by one of the clerks of the Survey. In the discussion of world production of minerals, the year 1913 was considered representative because it was the last normal year. 5. Mr. Potts states (p. 1690) : "Apparently the Government geologists have approached investigation of domestic reserves with pessimism." There is abundant record in the form of summary reports to the Council of National Defense, the War Industries Board, and the Shipping Board during 1917 and 1918, as well as the testimony of many producers of manganese ore, that the attitude of the geologists was quite the reverse and that they were constantly insisting upon provision for the use of the steadily rising production and upon a dependence upon domestic reserves. 6. Mr. Potts's brief states (p. 1691): "It has also been proved that the estimate of the period of time which these reserves would last this country is based only upon an estimate of high-grade ore which is belittled, and that that estimate does not take into consid- eration lower-grade manganese ores or the manganese ore associated with iron ore; nor does it take into consideration the metallurgical adaptability of all our ores in steel making." This statement is made in spite of ^the following paragraph, taken from one of the reports to which he refers several times: "The widespread utilization of low-grade in place of high-grade material undoubtedly presents im- posing metallurgical problems. To the optimistic observer, incom- petent to consider these problems in detail, the progress made to this end in 1917 and 1918 offers considerable encouragement. The large reserves of the low-grade material can probably be depended upon under stress to double the probable life of the high-grade ore." A careful examination of Mr. Potts's testimony and brief to the Senate Finance Committee, in the light of the foregoing statements, leads Mr. Smith to conclude that their author is more concerned with discrediting the Survey as a source of accurate and prompt informa- tion than he is in supplying evidence for the case which he presents. This attitude might lie pardoned if there were not abundant evidence from his brief that, in order to strengthen his argument, he uses short-cut and questionable methods to reach his own estimate, quotes partial statements which convey a meaning different from the origi- nal text, and fails to understand some of the critical data used by him. Mr. Smith comments hereon as follows : (1) At the time of his appearance before the Senate committee, August 26, 1921, Mr. Potts stated (p. 1693) : " From the data 164 DIGEST OF TARIFF HEARINGS, H. R. 7456. already accumulated the evidence points to a reserve tonnage of domestic manganese ore as follows : Tons. High-grade manganese, 35 per cent and over 10,000,000 Ferruginous manganese, 10 to 35 per cent 20,000,000 Manganiferous iron ore, 5 to 10 per cent manganese 45, 000, 000 Also (p. 1694) : Up-to-date investigations prove that the reserves of high-grade manganese ore are approximately 10,000,000 tons." In order to justify his estimate of 10,000,000 tons of high-grade ore, Mr. Potts, in conference with Mr. Hewett, stated that it was obtained by multiplying the total reserves, as published by the 'Sur- vey, by a factor considered by him to be dependable from his recent data applying to a few districts. He further admitted that he had no data, other than those of the Survey, concerning several of the most productive districts. (2) Concerning the estimates of reserves of domestic high-grade manganese ore, Mr. Potts quotes (p. 1687) this statement of Messrs. Harder and Hewett : " The estimates represent little more than the order of magnitude of minimum recoverable quantities," thus sug- gesting that they apply to the whole country. In the original context the statement applies only to the estimates of reserves in Virginia, Georgia, and Tennessee. (3) In calling attention to the small estimate, 2,800 tons, of high- grade manganese ore in the Butte district (p. 1690) Mr. Potts quotes from a letter of Albert J. Seligman to the effect that 71,000 tons of manganese ore were produced by his company in 1918 and 63,000 tons in 1920. Mr. Potts admitted, in conference with Mr. Hewett, his ignorance of the fact that these quantities represent not high-grade manganese ore but low-grade oxide ore which had to be milled to yield a shipping concentrate. This material was part of the estimated 400,000 tons of low-grade material figured by Mr. Pardee and appearing in the table of reserves. Estimates of domestic manganese ore cla-ssified according to character of work done. Number deposits examined 1916-1918. Manganese, 35 per cent. Manganese 5 to 35 per cent, largely more than 20 per cent SiOj, less than 30 per cent Fe. Manganese 5 to 35 per cent, largely more than 30 per cent Fe, less than 20 per cent SiOi. Reserves. Addi- tional re- serves in prospect. Reserves. Addi- tional re- serves in prospect. Reserves. Addi- tional re- serves in prospect. (a-l) Detailed work: Estimates highly dependable (a-2) Detailed work: Deposits such that, further work may warrant revision . . . (fr-1) Reconnaissance work: Es- timates highly dcpend- aMe;little or no explora- tion since examinations. (b-2) Reconnaissance work: De- posits such that further work may warrant re- 40 548 211 2% 25 Tons. 178,000 387,000 89,750 50,000 Tons. 350,000 280,000 (?) (?) Tons. 116,450 235,000 507,350 460,200 Tons. 230,000 250,000 (?) (?) Tom. 5,000 15,000 3,800 2, .508, 000 13,628 Tons. 100,000 2,050,000 (?) (C) Not examined by Survey DIGEST OF TARIFF HEARINGS, H. R. 7456. 165 In a statement supplementary to the one above given Mr. Smith takes occasion to correct any possible misunderstanding that might arise with reference to the deposits of ore in the Emma mine at Butte, Mont. Figures of ore shipments for 1918 are already on record with the Geological Survey, having been confidentially reported in 1919 by the Anaconda Copper Mining Co. Mr. Smith goes on to observe that there is no question about the large deposits of manganese carbonate ore in the Butte district; their importance was recognized by the Survey in 1917. At that time no tonnage estimate was regarded as possible, but the high quality of these ores was stated in the 'Survey report on "Manga- nese at Butte, Mont.," published in April, 1918. Issued later in the same year the Survey's table of manganese ore reserves in the United States specifically states that the estimate of tonnage given " does not include large deposits of carbonate ore, 35 to 38 per cent of manganese." What seems to be an error in a paragraph of Mr. Smith's testimony in the hearings is in the mention of the concentra- tion of low-grade oxide ore, concentrated low-grade oxide ore being there confused with the shipments of high-grade manganese car- bonate ore from the Emma mine. In the concluding paragraph of a letter addressed by Mr. Smith to Doctor Page, then chairman of the United States Tariff Commission, the essential fact was brought out that the large shipments from the Emma mine in 1918 and 1920 were of a notably different character from the 2,800 tons of high-grade oxide ore estimated by the Geological Survey. PARAGRAPH 302. TUNGSTEN ORE. WITNESS, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Nelson Franklin, representing tungsten-ore producers ; address, Denver, Colo. Hearings: Pages 1696-1706. Costs and selling prices. Domestic costs averaged $13 per unit of 20 pounds as against foreign costs ranging from $1.25 to $4. As given in previous testimony before the Senate Finance Committee (pp. 36-40 and 51-55), the operating costs of three of the largest and best equipped mines in this country were : Class of mining. Cost per ton of ore. Cost per unit W0 3 . Per cent W0 3 in ore. Name of mine. Quarry Tunnel Shaft, h low rade $3.77 12.80 21.16 112.83 12.89 i 11.13 0.294 1 2.5 Tungsten Mines Co. Pacific Tungsten Co. Atolia Mining Co. medium-grade lode igh-grade vein i Atolia unit cost, 1918, $8.91, but grade of ore 25 per cent less than 1918. Cost of mined ore same; cost per unit increased. Chinese costs in 1919, according to the statement of a large importer (presented in detail), were $5.96 per unit of 20 pounds c. i. f. Pacific ports. Of this total, only $1.84 represented mining cost, the re- mainder being made up of local transportation, $0.90; local taxes, ; and ocean freight and packing, $0.34. (Exchange at Hong- 7713422 12 166 DIGEST OF TARIFF HEARINGS, H. R. 1456. kong, $1=$0.80). A small amount of Bolivian output can compete with Chinese on a price basis. Size of industry. In 1917 domestic production (6,144 tons) plus imports (4.878 tons) amounted to 11,022 tons. Deducting 2,500 tons exported, the indicated consumption for that war year was 8,522 tons. Peace-time consumption will doubtless be less, ranging between the United States Geological Survey estimate of 5,000 tons and the estimate of 7,500 tons by the steel makers. The witness's estimate is 6,000 tons annually, as being the more nearly correct normal require- ment. The two new mills in Nevada should produce 1,800 tons a year, and an uncompleted mill in that State and another in Arizona should furnish another 1.200 tons annually. These new mills in the Southwest should materially alter the 1918 situation reported by the Tariff Commission. In the future only about 30 per cent of the out- put would come from Colorado and at least 55 per cent would come from producers, exclusive of the Atolia Co. (which probably will henceforth furnish less than 15 per cent of the domestic output), in the States of California, Nevada, and Arizona. Altogether, there are 25 large, finely equipped mills in the four States mentioned, able to take care of the production from a large number of mines. These mines and mills are distinct in ownership, with no overlapping inter- ests, and any suggestion of monopoly in any branch of the tungsten industry is absurd. There are 27 refiners of tungsten ores and 32 makers of high-speed steel, according to a tabulation of the United States Geological Survey. Kates suggested. Increase the duty tp 57 cents per pound of me- tallic tungsten, which equals $9 per 'unit of 20 pounds of tungsten trioxide contained in ore. SPECIAL STEELS. PARAGRAPHS 302, 304, 305, 307, 308, 315, AND 319. TOOL STEEL. WITNESSES, AND INTERESTS REPRESENTED. REQUESTING RECLASSIFICATION : Mr. John A. Matthews, representing the Crucible Steel Co. of America and about 25 other makers of crucible, tool steel ; address, New York City. FAVORING LOWER DUTIES : American importers of fine steels. (Brief.) B. M. Jones & Co. (Inc.), importers, New York City. (Brief.) Hearings : Pages 1706-1710. Witness: Mr. John A. Matthews. Costs and selling prices. No definite statements regarding entire cost of production. The capital invested in a crucible-steel plant, per ton of product, is from five to six times as great as required for mills making merchant bars, structural steel, etc. The investment per ton in the former is customarily from $300 to $400, while in the latter it may vary from $32.50 to $75. The product of a tool-steel mill averages about 1 ton per man per month, while in the manu- facture of tonnage steel it is from 15 to 30 tons. The labor cost involved in the manufacture of crucible steel is also greater than in the case of tonnage steel. It is because of this factor that imports of crucible and other high-grade steel tend to increase and exports to DIGEST OF TAE1FF HEARINGS, H. R. 7456. 167 decrease. In the case of some high-priced steels the proportion of labor cost to total cost is as high as 85 or 90 per cent. Size of industiy. The capital invested in the crucible tool-steel industry in the United States amounts to probably $250,000,000, and the number of men employed from 30,000 to 40,000. During the past 12 months the employees of this industry have not had 25 per cent employment. There are about 30 mills engaged in this manufacture, and there are from 40 to 50 importers of grades which compete di- rectly with them. While the production of open-hearth steel in the second decade of this century, as compared with^that in the last dec- ade of the last century, was'tripled, the production of crucible steel was increased by only 7 per cent. The crucible or fine steel industry is a handicraft industry. It rep- resents in tonnage only about one-half of I per cent of the total steel production of the country but from 2 to 2 per cent of the value of the total steel business. Comparability. The witness denies the statement that American mining steel is inferior to Swedish and affii*ms that this country is able to make anything made abroad and possesses double the requisite capacity. Rates suggested. In paragraph 302 manganese ores and tungsten ores should be kept on the free list, as the country is dependent upon the foreign product. The duty on molybdenum ore should not be over $10 per ton. The rates on the ferro-alloys made from the gres mentioned should also be very materially reduced. In paragraph 304 there is a fundamental defect in the classification of steel prod- ucts. In the case of tonnage steels, the manufacture of which is well established in the United States, the rates of duty on 'an ad valorem basis are higher than on crucible or finely finished steels. Thus, an examination of this paragraph shows that steel valued at H cents per pound is protected to the extent of 33^ per cent, while steel valued at just under 40 cents per pound is given a 15 cent protection, and all steels valued at over 40 cents per pound are allowed 20 per cent protection. This defect in the rates in paragraph 304 could be in large measure corrected if in line 5 of paragraph 305 the words " carbon or " were inserted before the word " nickel." Line 5 w r ould then read, " containing more than six-tenths of 1 per cent of carbon, or nickel," etc. It so happens that nearly all crucible or fine steels are high- carbon products running well over six-tenths of 1 per cent, while the large-tonnage industry is largely made up of steels containing con- siderably less. It was further suggested that the last portion of para- graph 305 should be so amended that the additional cumulative duty on molybdenum and tungsten steels should apply to the entire molybdenum and tungsten contents. If the duties on the ferro-alloys and the ores of the ferro-alloys should be reduced the rates on alloy steels in paragraph 305 could be correspondingly lowered. The criticism directed toward paragraph 304 is also applicable to paragraphs 307 and 308 that is to say, the higher the value of the steel the lower the ad valorem rate of duty. This defect, however, would be largely remedied if the proposed change in paragraph 305 should be adopted. Paragraphs 315 and 316 cover satisfactorily ordinary commercial rod wire and coiled rolled strip, but do not adequately protect the 168 DIGEST OF TARIFF HEARINGS, H. R. 7456. manufacturer of highly finished specialties, such as polished drill rod, watch-parts steel, safety-razor steel, etc. If the proposed amend- ment to paragraph 305 be adopted, this defect would be in large measure corrected. Remarks. In the manufacture of crucible and highly finished steel, the investment and labor costs are much larger than in the case of ordinary tonnage steels. The basic differences in the value of the crucible steel industry, as compared with the tonnage steel industry, have never received adequate consideration in the tariff. This has resulted in a very large proportion of all steel subjects operating to the detriment of the smaller industry, while imports of tonnage steel have been almost negligible in relation to the vast production. The gradation of duties, according to Mr. Matthews, should take into con- sideration this fundamental fact. Like many other steel producers, he protests against the high rates imposed in paragraph 302 on the ferro-alloys and ores of the ferro-alloys. Witness: American importers of fine steels. (Brief; no appear- ance at hearings.) The brief, in pamphlet form, is in rebuttal of certain parts of Doctor Mathews's testimony, cited above. Explaining the statement that the manufacture of crucible steel in this country has increased only 7 per cent during the last decade^ while the output of open- hearth steel tripled during the same period, it is stated that the real competitors of American crucible plants are the electric and open- hearth steel departments of these same crucible plants and not for- eign producers. The argument that the crucible or fine-steel industry is a handicraft industry does not apply to the majority of products made in electric or open-hearth furnaces. The importers believe that the total production of genuine crucible steel by American makers of tool steels is less than 8 per cent of their total output. The alle- gations contrasting the high investment per ton of product and the low output per man employed probably refer on.lv to the actual weight of crucible steel produced and doubtless take into account the large amount of finishing work applied to such products as needle wire, razor steel, hairsprings, etc. This low average production, therefore, does not represent actual steel making, but includes highly specialized finishing work on articles classified under separate para- graphs of the tariff bill. The claim that " the basic differences in the nature of the crucible- steel industry as compared with the tonnage-steel industry have never been given adequate consideration in the drafting of tarfff bills, with the result that a very large proportion of all the imports of steel are made to the detriment of this relatively small industry," is not supported by facts. It is erroneous to claim that an importation of less than 2 per cent of actual domestic production is a detriment to the crucible or fine steel industry. Such steels are imported solely to meet the demand of American manufacturers for quality, and imported fine steels are sold at equal or higher prices than equivalent American grades. The importers of fine steels are practically all American business men with large capital investment. While they do not actually employ labor in steel making they do employ large staffs of salesmen, office and warehouse labor, carry stocks valued DIGEST OF TARIFF HEARINGS, H. R. 7456. 169 in hundreds of thousands of dollars, and pay income tax, duty, per- sonal property taxes, etc. Attention is directed toward the possibility of reducing the pro- posed duties on ores and ferro-alloys, in which case proportionately lower rates of duty should be placed upon imported steels. Touch- ing the compensatory duty on tungsten, the importers are unable to assume that the price of tungsten will increase from 40 cents per pound to $1.12 per pound, as a result of the 72 cents duty. The duty will be only a contributing factor and the price will be adjusted by competition with other American mines. American manufacturers of ferro-alloys will take into account the probability that there are 10,000 tons of tungsten in warehouse in this country, and that a de- mand for the importation of tungsten ore or metal is not likely to arise for three or four years. The contention that paragraph 304 does not give reasonable pro- tection to certain steel products, such as needle wire, safety-razor blade steel, hairspring wire, etc., is misleading; this paragraph ap- plies to regular steel products in the form of bars, forgings, etc., while the articles mentioned are covered in other paragraphs, as for example paragraphs 315 and 316. Objection is made to Doctor Mathews's request that steels contain- ing more than six-tenths of 1 per cent of carbon be included with alloy steels at a higher rate of duty under paragraph 305. To fix arbitrarily a six-tenths per cent carbon content is absolutely unten- able, as a high-carbon steel does not require appreciably more labor to create than a low-carbon steel. The purpose of such inclusion clearly indicates the desire to exclude importations of fine steel, thereby setting up a monopoly. Imported fine steels should not be excluded from the American market, as this would deprive domes- tic consumers of the opportunity to obtain quality steels. Many of these statements are enlarged upon in supporting letters from individual members of the importers' organization, including William Jessop & Sons (Inc.), H. Boker & Co. (Inc.), the Arthur Balfour Steel Co. (Inc.). Kobert K. Greaves & Co., Hobson, Hough- ton & Co. (Ltd.), and Newman-Andrew Co. Mr. J. B. Smiley, secre- tary of the association, in a separate letter dated December 13, 1921. makes the further suggestion, in regard to the claim that paragraph 305 does not take into consideration conversion loss, that these should be viewed in the light of the fact that foreign steel makers expe- rience the same conversion loss from the ore to the finished steel a loss naturally reflected in the selling price or value of the imported steel and hence in the duty paid thereon. Summarizing the import situation, it is claimed (1) that the importation of tool steels repre- sents an extremely small percentage of the tool steel produced and sold in this country: (2) that imported steels are not sold at less than American market prices: and (3) that imported fine steels are used by the American consumer only because of their superior quality. Rates suggested. The importers ask the retention of the present Underwood rates (on foreign invoice valuation) on the ground that they have proved adequate and fully protect the American industry. In no case should a special paragraph, such as 305, be created for 170 DIGEST OF TARIFF HEARINGS, H. R. 7456. alloy steel, but if this is retained these steels should be exempted from paragraph 304 and the rate should not be more than 2^ per cent in excess of that on straight carbon steel. The preference given in the Underwood bill to open-hearth and Bessemer steel as com- pared with crucible and electric steel should be retained. If some form of American valuation is adopted, the importers ask that valuation be made by comparison with the domestic cost of manu- facturing on the mill floor, exclusive of selling expense, or with com- parable products made by similar processes. On the basis of such American valuation, the importers request under paragraph 304 a straight ad valorem duty of 10 per cent on all crucible steels, this to cover steels made by the Bessemer, Siemens-Martin, or open-hearth processes. A proviso is called for, admitting such steels valued at not over 4 cents per pound at a specific rate of three-tenths of 1 cent per pound and those valued at over 4 cents per pound at six-tenths of a cent per pound ; no duty to be higher than 10 per cent. The elimination of the additional 15 per cent duty from paragraph 305 is suggested, but failing this a reduction to 12 per cent and waiving the duties contemplated by paragraph 304 on application of paragraph 305. The additional cumulative duty on molybdenum and tungsten should be cut in half and " chromium " should be eliminated ; chrome content should be classified with silicon and manganese, since chro- mium in combination with carbon steels to the extent of 1 to 1| per cent is used only to intensify and deepen the hardening property of the carbon and does not give special qualities as in the use of larger percentages of nickel, tungsten, etc. The permitted contents of sili- con, chrome, or manganese should therefore all be increased to H per cent and be confined to open-hearth, Bessemer, and electric steels. A straight ad valorem duty of 10 per cent is asked on all articles specified in paragraphs 307, 308, and 316. In paragraph 1441 music wire should be eliminated as. belonging to paragraph 316. It is a plain steel wire, requiring no more labor in manufacturing than spring wire under paragraph 316. The tech- nical term " music wire " is misleading, as more than 95 per cent of such wire is sold for mechanical springs and not for pianos or musical instruments. Witness: B. M. Jones & Co. (Inc.), importers, New York City. (Brief; no appearance at hearings.) A leaflet accompanying letter of August 11, 1921, gives a calcula- tion showing that the duty on high-speed steel under H. K. 7456 would amount to 47| cents per pound as compared with approxi- mately 11 cents under the Underwood tariff. It is stated that imports of high-speed steels are approximately 3 per cent of the total amount of such steel used in the United States and that they have yielded the Government an annual revenue of about $150,000. It is sub- mitted that an importation amounting to only 3 per cent of the domestic consumption is not a menace to any industry, and that the proposed rates, by absolutely excluding foreign competition, might increase the cost of high-speed steel to American consumers by $10.000,000 per annum. DIGEST OF TARIFF HEARINGS, H. R. 7456. 171 PARAGRAPH 304. HOLLOW MINING DRILL STEEL. WITNESS, AND INTEREST REPRESENTED. FAVORING LOWER DUTIES : Mr. C. F. Schwep, representing the Ingersoll-Rand Co. Hearings : Pages 1760-1761. Comparability. It may be said that the old type of percussion drilling differs widely in principle from the hammer drill. The hammer drill uses a hollow steel and, instead of lifting the steel in the chuck up and down, the drill is tapped on the end. The steel receives blows at the rate of 2,000 per minute and must be able to withstand the shock of vibration. It has been found that there is -something inherent in the Swedish steel, not revealed by analysis, which makes that particular steel very much better adapted for that kind of work than American steel. Swedish steel is the only imported product which enters into the manufactures of the company. Size of industry. The Ingersoll-Rand Co. has six plants in this country, employing about 6,000 men. It imports about 2,000 tons of hollow mining drill steel each year from Sweden. Rates suggested. Retention of the 8 per cent duty under the act of 1913, instead of the proposed increases under the Fordney bill. PARAGRAPHS 304 AND 305. HIGH-SPEED STEEL. WITNESS, AND INTERESTS REPRESENTED. FAVORING LOWER DUTIES: Mr. Arthur Balfour, managing director Arthur Balfour & Co. (Ltd.), Shef- field, England, an ex-president of the Sheffield Chamber of Commerce and ex-master cutler of Sheffield, representing a deputation from Sheffield, England, which included Sidney J. Robinson, Peter MacGregor, and J. C. Ward. Mr. Balfour represented Arthur Balfour & Co. (Ltd.) ; Mr. Rob- inson the firm of Wm. Jessop & Sons (Ltd.) ; Mr. MacGregor the firm of Sanderson Bros. & Newbould (Ltd.) ; and Mr. Ward the firm of Edgar Allen & Co. (Ltd.). In addition to these Sheffield companies, the deputa- tion represented (Sir W. G. Armstrong, Whitworth & Co. (Ltd.), of Man- chester, England. Hearings : Pages 1752-1760. Costs and selling prices. The witness contended that the labor cost of manufacturing high-speed steel had increased very greatly in re- cent times. Since 1912 the advance in wages in England had amounted to 400 per cent. Coupled with this statement, however, was the assertion that wages at present in England were coming down quite rapidly. Ordinary labor that is, a man wheeling a barrow gets 3 pounds 10 shillings per week. The witness stated that the cost of living in England is about 100 per cent higher than it was in 1912. High-speed steel containing 18 per cent tungsten sells in England at 3 shillings 9 pence per pound, or about 420 pounds sterling per long ton. (NOTE. At the exchange rate of $3.60 per pound, this price is equivalent to about 68 cents per pound in American currency) . Size of industry. In 1920 about $250,000 worth of high-speed steel was imported into the United States. Rates suggested. It was suggested that the duty on tungsten con- tained in steel be reduced, in paragraph 305, from 72 cents per pound 172 DIGEST OF TARIFF HEARINGS,, H. R. 7456. to 35 cents per pound, and that the rate in paragraph 304 on steel valued above 40 cents per pound be reduced from 20 per cent ad valorem to 10 per cent. Remarks. Mr. Balfour stated that the concerns here represented had relations with American business men for a number of years past and paid local taxes in the United States. The duties on tung- sten steel contained in the Fordney bill were, in his opinion, pro- hibitive. PARAGRAPHS 304 AND 305. STEEL, ESPECIALLY SWEDISH. WITNESSES, AND INTERESTS REPRESENTED. REQUESTING RECLASSIFICATION : Mr. John H. Brewster, representing himself; address, 56 West Forty-fifth Street, New York City. The Minister of Sweden. Hearings : Pages 1761-1764. Witness : Mr. John H. Brewster. Costs and selling prices. Comparative increases in production costs in 1920 as compared with 1914 are : Cost in the United States, 1.4 times; in Sweden, 3.5 times; fuel cost in the United States, 2 times ; in Sweden, 3 times ; labor cost in the United States, 1.6 times ; in Sweden, 2.5 times; transportation cost in the United States, l.T times; in Sweden, 3 times. In 1909 the average production costs of Swedish steel at the mills were less than 3 cents per pound, while in 1921 the production cost of the same steels averages more than 5 cents. Swedish open-hearth and Bessemer costs are so much higher than similar American costs that Swedish steel can be used only in limited quantities and for purposes where special steels are desired ; an increase of 1 cent per pound will in many cases make the price of Swedish, steel prohibitive. Size of industry. United States Customs Reports available for the years 1912-1916, inclusive, show a yearly average of 12,350 tons of open-hearth and Bessemer steels imported from Sweden, or about one-third of 1 per cent of the average total production of American mills for the same period. The money value of American purchases of Swedish steel and iron is less tha'n $5,000,000 a year, while the annual exports of American steel to Sweden average more than $100,000,000. Rates suggested. The witness contends that the House of Repre- sentatives, by adopting in paragraph 304 the approximate provisions of the Payne- Aldrich Act, overlooked the tariff differential established in paragraph 110 of the act of 1913 between crucible and electric steels on the one hand and open-hearth and Bessemer steels on the other. This distinction should be maintained. It is requested that the fol- lowing provision be added to paragraph 304 : " Provided, That steel ingots, copper ingot's, blooms, slabs, bars, sheets, plates, and steel not specially provided for, made by the Bessemer, Siemens-Martin, open- hearth or similar processes, in the manufacture of which wood or charcoal is used, all the foregoing valued at not over 4 cents per pound, shall be subject to a duty or three-tenths of 1 cent per pound ; valued at over 4 cents per pound, six-tenths of 1 cent per pound." DIGEST OF TAEIFF HEARINGS, H. R. 7456. 173 With reference to paragraph 305, chrome should be removed from its classification with tungsten and molybdenum and placed with manganese and silicon, because the effect of a small percentage of chrome in carbon steel is to intensify the hardening quality of the carbon. Under modern heat-treatment practice chrome therefore occupies a place similar to that of manganese and silicon rather than that of the other, alloys mentioned in this paragraph. The word " chromium " should, therefore, be eliminated from the sixth line of paragraph 305 and inserted in the ninth line, making the provision read as follows : " Provided* That chromium, manganese, and silicon shall not be considered as alloying material unless present in the steel in excess of \\ per cent." From 1909 to 1913 great progress was made in the development of electric and alloy steels. Under the act of 1913 these fine steels were given greater protection than Bessemer and open-hearth steels, the costs of the latter being so low that foreign competition was neg- ligible. For special purposes, however, the Swedish steels made by the Bessemer and open-hearth processes were more suitable than American steels, and were used largely in the manufacture of pocket- knives and other cutlery, twist drills, taps, carpenters' chisels, black- smiths' tools, scythes, ball bearings, and other finished products. This imported open-hearth Bessemer steel is sold at very close prices as semifinished products to American manufacturers and dealers, but at higher prices than American open-hearth and Bessemer steel. These Swedish steels are used where special quality is required, but if the price is materially increased by the imposition of higher duties, the raw-material cost will be too great and the industry will consequently suffer. Witness : The Minister of Sweden, in an authorized communica- tion of August 8. 1921, transmitted through the State Department and representing the views of the Swedish iron and steel industry : ti'ize of industry. Sweden has for many years had large business dealings both in the purchase of raw materials and of products made in the United States; in recent years the volume of Sweden's pur- chases has been about four times that of her sales. The total annual value of iron and steel sold by Sweden to the United States amounts to less than $5.000.000, and such iron and steel has been so sold for 50 years. Sales have shown no recent increases and are due solely to the superior suitability of the materials for certain purposes. It has been proved that when the tonnage of any metal imported from Sweden becomes of sufficient importance, as for example in the case of bicycle and other seamless tubing, American metallurgists have developed a substitute. The margin above the prices asked for American metals, that the Swedish manufacturer is able to secure, is closely limited by the extent to which the American manufacturer feels he can increase the cost of his finished product. Rates suggested. In order to reconcile paragraph 304 with para- graphs 303 and 315 a proper differential should be established be- tween the high-priced electric, crucible, tool, and other imported steels and the lower-priced open hearth and Bessemer steels coming from Sweden. This differential is recognized in paragraph 110 of the act of 1913. The following provision should, therefore, be 174 DIGEST OF TARIFF HEARINGS, H. R. 7456. added to paragraph 304 for steel ingots, cogged ingots, blooms, bil- lets, slabs, bars, sheets, plates, and all steel, not specially provided for, made by the Bessemer. Siemens-Martin, open-hearth, or similar proc- esses, in the manufacture of which wood or charcoal is used for fuel : When valued at not over 4 cents per pound, a duty of three-tenths of 1 cent per pound ; when valued at over 4 cents per pound, six-tenths of 1 cent per pound. In paragraph 305 chromium should be omitted from its association with tungsten and molybdenum and classified with silicon and man- ganese. Since chromium in combination with carbon steels to the extent of H per cent is used only to intensify and deepen the har- dening property of carbon and is never considered as a tool or special quality steel, the permitted contents of silicon, chrome, and man- ganese should be increased to 1| per cent and should be confined to open-hearth and Bessemer steels. Criticism is also made of the American valuation plan, which, if retained, should be modified as regards the fifth and sixth lines of section 402 so as to read, " of exportation of the imported mer- chandise at which products of the United States made by comparable and competitive processes were," etc. PARAGRAPHS 304 AND 305 HIGH-CARBON CHROMIUM STEEL. FAVORING LOWER DUTIES : The S. K. F. Industries, New York City. (Brief; no appearance at hear- ings. ) Size of industry. This organization, incorporated in the State of New York, supervises a number of factories, representing an invest- ment of $14,000,000. producing ball bearings and steel plates. It co- operates with S. K. F. organizations throughout the world, especially in Sweden, systematically exchanging technical results of investiga- tions. An expenditure of over $250.000 has been made in the erection and equipment of a laboratory for the purpose of (1) cooperating with American steel manufacturers in improving their product, and (2) for investigating and conducting research in foreign-made steels. Comparability. Gratifying results have been obtained in raising the standard of quality of American ball-bearing steel. Except for exceptionally severe conditions, ball bearings of American-made steel satisfactorily meet all requirements and for several years past it has not been necessary to use Swedish steel except for a small percentage of the demand. This small percentage, however, has been necessary, enabling the organization to meet the requirements of heavier and very exacting specifications of many American manufacturers. In- vestigations have proved conclusively that ball bearings made of the best grade of Swedish ball-bearing steel can successfully sustain greater load and speed conditions than those made of American steel when used under identical conditions. The superiority of the best Swedish steel is believed to be due to the well-recognized superior purity of Swedish ore and the methods used in refining it, as well as in the making of the steel by the use of charcoal and wood methods not employed in the United States. DIGEST OF TARIFF HEARINGS, H. R. 7456. 175 Rates suggested^ Should the maintenance of the present tariff schedule be considered inadvisable, the company believes that the protection provided in paragraph 304 is considerably in excess of that required to protect the interests of American steel makers. The addi- tion of the extra duty in paragraph 305 would entirely prohibit the use of Swedish steel. In case paragraph 304 is adopted, the com- pany urges that paragraph 305 be changed so as not to include steel containing not more than 1| per cent chromium. A content of 1^ per cent chromium means less change in the different qualities of the steel than an addition of 1 per cent manganese. PARAGRAPHS 304, 305, AND 316. FINE STEELS. . ' WITNESS, AND INTERESTS KEPRESENTED. FAVORING LOWER DUTIES : Mr. John B. Smiley, representing American importers of fine steels ; ad- dress, New York City. Hearings: Pages 1764-1780. Costs and selling prices. Foreign fine steels do not compete on a price basis with the American industry, but, on the contrary, com- mand higher prices. Crucible steels are sold strictly on quality. The imported material has never been sold on price and does not compete with the American product except on a quality basis. The price at which foreign cruci- ble steel is sold is always much higher than the market price of the American production for steels of similar classification; this differ- ential varies from 20 to 50 per cent at the present time. The highest grades of crucible carbon tool steel are not produced in the United States. The open-hearth and Bessemer steels imported into the United States never compete in price with. domestic steels made by similar processes, and are sold in this country only on account of their high quality. The additional cost in the manufacture of steels containing alloys does not increase the manufacturer's cost of production in proportion to the additional 18 per cent ad valorem assessed under paragraph 305. The prices of alloy steels at Liverpool are already higher than the American selling prices. The American mills are not handi- capped in the matter of selling expenses to the same extent as are the importers. The American mills perfected the making of high-speed steel, and cheapened its production to such an extent that during 1920 approximately 30,000,000 pounds were produced in the United States, and only about 3 per cent was imported. Soft cold-rolled steel for stamping and drawing purposes is so cheaply produced in the United States that it is impossible to import it. The American mills produce this material so efficiently and in such large tonnage that it sells in the United States for 4| cents to 6 cents per pound, which is below the European cost of production. Comparability. " There is no question but what fine steel is made in this country, but for particular requirements, either due to the process of manufacture or the raw materials employed, it has been 176 DIGEST OF TARIFF HEARINGS, H. R. 7456. found by actual experience over years that the foreign steel gives bet- ter life and is more what we want." Size of industry. There were about 22 manufacturing plants in the " fine-steel " business in America prior to the war. There are now about 45. The Crucible Steel Co. of America operates about 10 of these plants. The producing capacity for American fine steel is be- tween three and four tunes what it was before the war. There is produced in this country, in ingot capacity, 1,252,000 tons per annum or an equivalent of 834,984 tons per annum in the finished bar. The imports of fine steels do not exceed 20,000 to 25,000 tons per annum, and this quantity is constantly decreasing. This is true under the present Underwood tariff. Rates suggested. The proposed paragraph 304 overlooks the dif- ferential in paragraph 110 of the Underwood tariff, which provides for different rates of duty for steels made by the crucible, electric, and similar processes (15 per cent ad valorem, foreign value) , and the ' open-hearth and Bessemer steels (part on the free list and part at 8 per cent ad valorem, foreign value) . The witness maintains that this present distinction is proper and should be continued, as the imports of crucible and electric steels and steels made by similar processes are principally tool steels, whereas the imports of open-hearth and Bes- semer steels are principally semifinished raw materials used by Ameri- can manufacturers as such. In paragraph 305 the word " chromium " should be removed from its association with tungsten and molybdenum and classified with silicon and manganese, as chromium in combination with carbon steels to the extent of 1 to 1 per cent is only used to intensify and deepen the hardening property of the carbon content and is never considered as a tool steel. The permitted contents silicon, chrome, or manga- nese should be increased to 1^ per cent and should be confined to open-hearth and Bessemer steels. Remarks. A brief submitted by the witness (pp. 1766-1780) in- cludes the following : MODIFICATIONS ASKED FOR IN THE PROPOSED FORDNEY TARIFF MEASURE (H. R. 7456) UNDER METAL SCHEDULE NO. 3, BY AMERICAN IMPORTERS OF FINE STEELS JOHN B. LINDLEY, SECRETARY. Paragraph 304 : Based on American valuation plan, a straight ad valorem duty of 10 per cent on all crucible steels. In Bessemer. Siemens-Martin, open- hearth, or similar process, the following to be added to paragraph 304 : " Pro- vided, That steel ingots, cogged ingots, blooms, billets, slabs, sheets, plates, and steel not specially provided for, made by the Bessemer, Siemens-Martin, open- hearth, in the manufacture of which wood or charcoal is used as fuel, or similar special processes, all the foregoing valued at not over 4 cents per pound shall be subject to a duty of three-tenths of 1 cent per pound ; valued over 4 cents per pound, six-tenths of 1 cent per pound." Paragraph 305 : Based on American valuation plan, the elimination of the ad- ditional 15 per cent duty on alloy steels ; but failing in this its reduction to 12} per cent and the duties contemplated by paragraph 304 in application to para- graph 305 waived. That the additional cumulative duties on molybdenum and tungsten content should be reduced from the proposed $1.25 per pound on mo- lybdenum content to 62} cents per pound on molybdenum content in excess of 1} per cent, and the proposed 72 cents per pound on the tungsten content to 36 cents per pound on the tungsten content in excess of 1} per cent. Paragraph 316 : Based on American valuation plan, a straight ad valorem duty of 10 per cent DIGEST OF TARIFF HEARINGS, H. R. 7456. 177 NOTE. We once again point out that under the Underwood tariff the American fine-steel industry has prospered, and importations have decreased. The above proposition covering recommended modifications in the proposed Fordney tariff measure, metal schedule No. 3, if accepted, will still further burden the im- portation of fine steels by imposing higher duties than now obtain. Other memoranda submitted included the argument that, if the duties in the proposed Fordney tariff bill remain unchanged, a revenue to the Government, estimated at approximately $500,000 per annum, will be cut off, as the duties mentioned would absolutely prohibit at least 80 per cent of the present imports. The small quantity of fine steels now imported into this country (2 per cent of the total con-* sumption here) can not be considered competitive, as the imported fine steels do not undersell similar grades of American steel because the imported products commanded higher prices due to their quality, therefore it can not be claimed that the American industry is threat- ened ; hence the proposed increased duty will only result in the crea- tion of a monopoly which will have the American purchaser at its mercy. The proposed duty, in addition to causing loss of revenue and creating a monopoly, will invite retaliation from foreign Govern- ments whose citizens export fine steels into this market. PARAGRAPHS 305, 309, 385, AND 393. NICKEL ALLOYS. T A YOKING PROPOSED OR HIGHER DUTIES AND REQUESTING RECLASSIFICATION : The Driver-Harris Co., Harrison, N. J. (Revision of a brief presented to the Ways and Means Committee, presented through Senator Frelinghuy- sen; no appearance at hearings.) Costs and selling prices. German wiredrawers receive 600 marks per week, equivalent to $12, while American drawers are paid $25 to $50 per week. The American industry is a war development, and can not successfully compete with low-priced German labor. Size of industry. The company produces nickel and nickel al- loys of a range of compositions radically different from that ordi- narily understood by the term " nickel steel " ; they contain from 25 to 75 per cent nickel and from 10 to 22 per cent chromium. The material is used in the form of wire, sheet, strip, and strand, for electrical purposes, and in castings, etc., for mechanical and chemi- cal purposes, especially for use in heat-treating operations in various industries. Before the war none of the fabricated forms of nickel were produced in the United States, but were imported in a partly finished state. Rates suggested. Paragraph 305: Include metal alloys, metal alloy castings used as a resistant to high temperature and acids in the form of carbonizing boxes, retorts, lead pots, cyanide pots, pyrometer protection tubes, and for other heat-treating purposes, at 50 per cent ad valorem. Paragraph 309: Include bi-metal wire and rods, as well as the other forms mentioned, and increase the duty to 50 per cent. Paragraph 385 : Include castings and wire in the second part of the paragraph, and increase the duty to 50 per cent. Paragraph 393 : Include *' or alloys " after the metals enumerated, and increase the duty to 50 per cent. 178 DIGEST OF TARIFF HEARINGS, H. R. 7456. PARAGRAPH 309. THERMOSTATIC METAL. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OB HIGHER DUTIES: Mr. George F. Kurd, representing the H. A. Wilson Co., Newark, N. J. FAVORING LOWER DUTIES : Mr. E. L. Clause, representing the Clause Automatic Gas Cock Co., Milwau- kee, Wis. Mr. George L. Meyer, jr., representing the Stewart Warner Speedometer Corporation, Chicago, 111. Hearings : Pages 1795-1799. Witness : Mr. G. F. Hurd, representing the H. A. Wilson Co. The witness described this product as a metal composed of two separate metals welded throughout their entire contact surfaces, the one metal having a very widely different coefficient of expansion from the other. The action of the two metals thus welded together, as temperature are changed, results in curling or distortion of the metal, this condition being used to set in motion a number of mechan- ical operations, automatically acting as a means of controlling and regulating the particular device. This application of the metal serves to accomplish great economies in fuel consumption. Some very fine and delicate instruments are made from this combination, so that a variation in distortion of one-sixty-fourth of an inch will result in a difference of fifty degrees in the temperature of an oven. Costs and selling prices. In 1920 the cost of producing thermo- static metal was $3.58 per pound, and the Wilson Co. has al- ways sold at a loss because of a desire to develop the industry. The high price was due to several causes, including the fact that the industry is in a state of development, both as to manufacturing processes and the uses to which the metal can be put. Highly paid workmen have had to be employed and the greatest care exercised. In spite of these factors, there is about 50 per cent waste of raw material, or 50 per cent scrap, as the result of the manufacturing operation. The estimated cost of the German metal laid down in New York is $1.40 per pound, the great factor in that differential being the difference in the exchange rate. There is also a great dif- ference in the labor costs and probably also in the material costs. Size of industry. Before the war, Germany was the sole source of supply of this metal. American producers have now capacity ample and sufficient to take care of the domestic markets. The Gen- eral Electric Co. was a manufacturer of this metal, but witness thinks they have given it up. Classification. This metal, a scientific instrument, goes into fin- ished products which are scientific instruments, yet it is classified with rough products, such as copper and coated steel. Neither in the method of manufacture nor in the materials used nor in the function of the product is thermostatic metal in any way similar to the metals described in section 309. It costs $3.58 per pound and is classified with other metals costing from 15 to 40 cents a pound. Thermostatic metal should have a separate classification. Rates suggested. A specific rate of $2.50 per pound, sufficient to offset the difference in exchange between the dollar and the mark DIGEST OF TARIFF HEARINGS, H. R. 7456. 179 and the difference between German and American costs. With this duty, the estimated cost of the German product, laid down in New York, would be about $2.97, equivalent to about 75 per cent ad valorem under American valuation. On the return of the rate of exchange to normal, the duty of $2.50 per pound will increase the tariff burden, but it would not leave a monopoly, as the industry is not covered by patents; Remarks. Statements in rebuttal of Mr. Kurd's statements fol- low. Witness : Mr. G. L. Meyer, jr., representing the Stewart Warner Speedometer Corporation, in a letter of October 6, 1921, to the Senate Committee on Finance. A communication in rebuttal of Mr. George F. Kurd's testimony (pp. 1795-1799) states that, prior to the war, the Stewart Warner Speedometer Corporation purchased thermostatic metal abroad, pay ing about $2.75 per pound f. o. b. Chicago. It was not until the General Electric Co. commenced to manufacture the metal that the corporation was able to purchase it in this country, although compe- tition was then soon established between the General Electric Co. and the H. A. Wilson Co. It is understood that the General Elec- tric Co. has discontinued the manufacture and turned over its proc- ess and, in fact, one of its men, to the H. A. Wilson Co. It is be- lieved that an absolute monopoly would be established if a prohibi- tive duty were assessed on the imported metal. The corporation fails to see why others should be penalized for the excessive waste caused, .apparently, by inefficient and improper methods in the manufacture of this metal by the H. A. Wilson Co. If foreign manufacturers can produce it without such an excessive waste, as they apparently can, at prices near those formerly paid them, why should the duty be made high enough to cover this waste and, possibly, prevent the importation of the foreign metal? A duty of $2.50 per pound, as asked by the H. A. Wilson Co.. is very much too high and a protest against it is entered. On the other hand, a duty based on American valuation would make it im- possible to determine the cost of this imported metal in advance. The Stewart Warner Speedometer Corporation is one of the largest users of thermostatic metal in the United States. Witness : Mr. E. L. Clause, representing the Clause Automatic Gas Cock Co., in a letter of October 4, 1921, to the Senate Committee on Finance. Costs and selling prices. The Clause Automatic Gas Cock Co. produces the highest grade of thermostatic metal at $1 per pound, which includes 10 to 15 per cent profit on the manufacture. In the opinion of the Clause Co., the Wilson Co. has essentially developed nothing whereby it could have lost money. The company's metal has not proved any superiority, and they have not solicited the sale of their metal in compliance with their testimony. The Wilson Co. is not interested only in the manufac^^^^^^^rniostatic metal; it is, in fact, more interested in the niamiJj&lifre of complete heat controls, for which reason it has interfered greatly with the progress of the Clause Co. in developing one of the most perfect and essen- tial instruments ever placed on the market. The waste experienced by them in the manufacture of this metal is 10 per cent, as against 180 DIGEST OF TARIFF HEARINGS, H. R. 7456. 50 per cent claimed by Mr. Hurd. Continuing this subject, the witness said that a duty of 75 per cent to protect a 50 per cent waste, due to the manufacturing methods of the Wilson Co., and based on the present rate of exchange, would cause an intolerable situation. With a return of the exchange rate to normal, the duty would leave a field clear of competition to the Wilson Co., which is in itself a monopoly. Rates suggested. A duty not higher than 15 to 20 per cent on the foreign invoice value, which would not impede natural develop- ments. There is room for healthy competition, and reasonable im- portation of this material will act as a counterbalance and prevent excessive prices. Remarks. Thermostatic heat controls, requiring thermostatic metal, are applied to gas stoves to secure the highest grade of baking, as for bread, cake, and pie, with efficiency, economy, and convenience. The H. A. Wilson Co., in a letter to the committee, dated Decem- ber 21, 1921, deals with the contentions (a) that the company's methods are unreasonably wasteful and (b) that the desired duty of $2.50 per pound or, alternatively, of 75 per cent on American valu- ation, would exclude German imports of thermostatic metal and result in the establishment of a Wilson Co. monopoly in this product. As regards the waste in manufacture, it is pointed out that a waste of about 50 per cent of the material used does not represent, as it appears to have been interpreted, a loss of 50 per cent of the cost of the finished product. "To be precise, this loss is equivalent to 36$ per cent of the price paid by the Wilson Co. for its raw materials, and represents only about 10 per cent of the total cost of manufac- turing and selling." The loss of metal is stated to be inevitable, no matter where the manufacture is carried on, essential details of manipulation entailing an unavoidable wastage, but of raw ma- terial only. No reasonable expense has been spared by the Wilson Co. to estab- lish an efficient plant for the manufacture of this metal, and the methods employed are the result of careful and exceedingly ex- pensive experimentation. The company does not ask for protection against the cost of careless, inefficient, and wasteful methods of manufacture. Touching the alleged tendency toward a Wilson Co. monopoly in this field, the absence of patents covering the production of this metal is emphasized, as is the fact that there are, in America, a num- ber of concerns who are familiar with, and have had experience in, the manufacture of thermostatic metal. That being so, any exaction of an excessive price would be immediately followed by effective com- petition. The only duty asked for by the company is such as will provide a margin between American costs of manufacture and the cost of Germffn ^utt i a i(j down in New York. As matters now stand, the American nVa'rket pays for German goods in many lines, not a price bearing any reasonable relation to German costs of pro- duction, but the price which the German importer fixes as the maxi- mum at which he can dominate the American market. DIGEST OF TARIFF HEARINGS, H. R. 7456. 181 The Wilson Co. has made every endeavor to be accurate and truth- ful. Following the hearing, its books and its plant were thrown open to the investigation of the Treasury Department and the results are available to the committee. The duty requested is vital to the continuance of the manufacture of thermostatic metal in America. The H. A. Wilson Co., in a further letter, published as a 25 -page pamphlet, repeats much of the witness's oral testimony and gives, in tabulated form, the detailed cost of production and sale of thermo- static metal by the company for the years 1918 to 1921. PARAGRAPH 309; ALSO PARAGRAPHS 305 AND 385. FORGED COMBINA- TIONS OF METALS. WITNESS, AND INTEREST REPRESENTED. FAVORING LOWER DUTIES : Mr. J. R. Boker, representing H. Boker & Co. (Inc.), New York City. Hearings : Pages 1787-1795. Costs and selling prices. Paragraph 309: Sheets or plates com- posed of iron, steel, copper, nickel, etc., with layers of other metal or metals imposed thereon by forging, hammering, or welding, divide themselves into two distinctly different groups group A, iron and steel sheets, plates, wires, and bars, plated with other metals, and group B, copper, nickel, or other metal sheets plated with other metals. The ? rices of the latter are very much higher than those of the former, ron and steel sheets plated with other metals vary in price according to fitness between $300 and $400 per ton, or 15 to 20 cents per pound. Copper, nickel, and other metal sheets plated with other metals sell for a much higher price. This second group of plated sheets includes thermostatic metal. Paragraph 385 : Pure nickel bars nine-sixteenths inch in size are sold by American manufacturers at 63 cents per pound. In Europe the same bars were selling at 61 cents per pound when the exchange rate on a mark was 1.5 cents. Pure nickel sheets and pure nickel wire, 0.04 inch, are sold by American manufacturers at 90 cents per pound. In Europe, at an exchange rate of 1.5 cents to the mark, they were sold at 65 cents per pound. Paragraph 305 : American high-speed steel now sells in the United States at 80 cents per pound. English high-speed steel sells at 58 vents per pound at Liverpool. Size of industry. Paragraph 309 : Plated iron and steel sheets and wire have been imported into this country for a number of years in small quantities, hardly ever in excess of 25 to 50 tons annually. So far as witness knows, there is no industry in this country produc- ing similar sheets. Copper, nickel, or other metal sheets plated with other metals are manufactured to a limited extent in the United States, but such sheets are largely imported. Rates suggested. Paragraph 309 : On plated iron and steel sheets a rate of 15 per cent ad valorem or a specific duty not exceeding 3| cents per pound is recommended. On sheets or plates composed of copper, nickel, or other metals, with layers of metal or metals imposed thereon, a duty of 20 per cent ad valorem or a specific rate of 10 cents per pound. 7713422 13 182 DIGEST OF TARIFF HEARINGS, H. R. 7456. Paragraph 385 : The word " tubes and wire " should be added to line 14 of this paragraph. It is also desired that, owing to the duties being assessed on American selling prices, pure nickel or alloys of which nickel is the component material of chief value, in bars and rods, straight or in coils, be dutiable at 10 per cent ad valorem ; wire tubes, sheets, strips, and strands at 15 per cent; anodes, cast, at 10 per cent ; anodes, rolled, 15 per cent ; and electrodes, 15 per cent. It is suggested that alloy steel be taken out of paragraph 304 and the duty in paragraph 305 be made 12^ per cent ad valorem. It is also suggested that the American valuation duty on tool steels under paragraph 304 be reduced from 20 per cent ad valorem to 10 per cent ud valorem. The principal reason for this reduction is that English manufacturing costs are extraordinarily high and will not be any lower for a long time. PARAGRAPH 310. TIN PLATE. WITNESS, AND INTEBESTS REPRESENTED. FAVORING LOWER DUTIES: Mr. E. R. Crawford, representing the Association of Tin Plate Manu- facturers, which includes all the independent makers of the country outside of the United States Steel Corporation ; the included concerns produce 55 to 60 per cent of the country's output; address, McKeesport, Pa. Hearings : Pages 1800-1803. Costs and selling prices. No definite statement was made, but it was urged that the duties proposed in the Fordney bill on pig tin,, fluorspar, ferromanganese and other raw products would add ma- terially to the costs of the tinplate and other steel producers. Size of industry. The normal consumption of tin plate in this country is pretty close to 35,000,000 boxes or 175,000,000 pounds. The tin-plate industry, the largest American consumer of pig tin, consumes 2,500,000 tons of steel per annum and employs in direct labor approximately 40,000 workmen. Kates suggested. A rate of 1.2 cents per pound on tinplate in. place of the 15 per cent ad valorem rate imposed by the act of 1913. Foreign values are in a very unstable state and a specific duty is con- sequently preferable to an ad valorem. While willing to accept the duty of 2 cents per pound on pig tin r the witness felt that, from the standpoint of developing the export trade, it would be very much better if this could be taken off. ' PARAGRAPH 312 ; ALSO PARAGRAPH 393. METAL SASHES AND FRAMES. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES: Mr. T. H. Ringrose, representing the International Casement Co., of Jamestown, N. T., and the Crittall Casement Co. (Inc.), of Detroit, Mich. The Manufacturers Association, Jamestown, N. Y. (Brief.) FAVORING LOWER DUTIES : Mr. Aaron C. Thayer, representing Henry Hope & Sons (Ltd.), an English corporation, and Henry Hope & Sons, a New York corporation, agent for Henry Hope & Sons (Ltd.) ; address, New York City. DIGEST OF TARIFF HEARINGS, H. R. 7456. 183 Hearings : Pages 2091-2096. Witness : Mr. T. H. Ringrose. Costs and selling prices. Labor cost in England is less than in the United States. Wages have increased in England to three times the prewar rates, while in the United States they have increased only to twice. Nevertheless, wages are still lower in England than in the United States and will come down faster than wages in the United States. Size of industry. The International Casement Co., of Jamestown, and the Crittall Casement Co.. of Detroit, are the only two manu- facturers of steel casement sashes in the United States. At James- town there are normally employed about 100 men and at Detroit about 120 men. The value of the output of the Jamestown plant last year amounted to $440,000. In addition, there was $70,000 worth imported from England. Rates suggested. The witness is satisfied with the rate of duty proposed in paragraph 393 of the Fordney bill. He took issue with Mr. Thayer, representing Henry Hope & Sons, of Birmingham, England, and recommended the continuance of the duty of 10 per cent ad valorem under the act of 1913. (See hearings, pp. 2088- 2091.) The International Casement Co., in supplemental briefs respec- tively dated July 7 and August 24. 1921, states that there would be some doubt under the provisions of H. R. 7456 as to whether steel casement sashes would be dutiable at 25 per cent under paragraph 312 or dutiable at 35 per cent under paragraph 393. A duty of 35 per cent is suggested as a fair protection. This point is further discussed, in the same interest, by Mr. Charles A. Ogren, attorney at law, New York City. Writing on July 12, 1921, he expresses doubt whether under the bill as it stands steel sashes and frames will be dutiable at 25 per cent, under paragraph 312, as " structural steel shapes fabricated for use," or at 35 per cent, under paragraph 393, as " articles not specially provided for com- posed of steel." Ambiguity would be avoided if the words in paragraph 312, "fabricated for use," were omitted and the words " shipped knocked down " substituted. Witness: The Manufacturers' Association, Jamestown, N. Y. (Brief; no appearance at hearings.) Rates suggested. A duty of 35 per cent ad valorem, together with the removal of any doubt as to the proper classification of steel sashes and frames. Remarks. The manufacture of steel sashes and frames in the United States is in its infancy and should be given protection suffi- cient to enable the manufacturers of this country to develop their business and pay American wages to American workmen. Hearings : Pages 2088-2091. (See also statement of T. H. Ring- rose, of Jamestown, N. Y., pp. 2091-2096.) Witness : Mr. Aaron C. Thayer. Costs and selling prices. fto definite statement regarding costs except the contention that under the 10 per cent ad valorem duty imposed by the act of 1913 the American producer is sufficiently pro- tected to exist and prosper. 184 DIGEST OF TARIFF HEARINGS, H. R. 7456. A brief submitted to the Senate Finance Committee by Mr. Thayer shows the difference in bids submitted by Henry Hope & Sons, the International Casement Co., and the Crittall Co. for window frames and sashes in Guthrie, Okla., Princeton, N. J., Richmond, Va., Cleve- land, Ohio, and Washington University. These bids were as follows : Scottish Rite Cathedral, Guthrie, Okla. : Estimate submitted by H. Hope & Sons, Dec. 16, 1920, amounting to $40,080 Secured by Grittall Co. for 35, 250 Princeton University, Princeton, N. J. : Estimate submitted by H. Hope & Sons, Feb. 26, 1921, amounting to 25,585 Secured by International Casement Co. at about 23, 200 Federal Reserve Bank, Richmond, Va. : Estimate submitted by H. Hope & Sons, Mar. 26, 1921, amounting to 19,004 Secured by Crittall Co. at about 16, 500 Cleveland public hall, Cleveland, Ohio: Estimate submitted by H. Hope & Sons, Feb. 9, 1921, amounting to_ 36, 964 Crittall Co 33,334 International Casement Co 28, 654 Educational Hall, Washington University: Estimate submitted by H. Hope & Sons, July 6, 1921, amounting to_ 30, 327 Secured by Crittall Co 27,453 Metal sashes and window frames made in this country and in England are practically the same. There are two classes of sashes the factory or industrial sash, made in large quantities and used in large factories, and the more expensive sash called casements, going into libraries, asylums, office buildings, 'and residences. Size of industry. No definite statement made regarding the size of the American industry. The International Casement Co. was in- corporated with a capital of $50,000 in 1912, and now has a capital stock of $78,450 and a surplus and undivided profit of $102,000. The Crittall Casement Window Co. has a capital stock of $122,000, of which $97,000 was paid in cash and $25,000 represents contracts with the Crittall Manufacturing Co. of England. In addition, this com- ^iy has a surplus in use as capital and undivided profit of over ,000. There are other American companies manufacturing metal sashes and window frames. Rates suggested. A duty of 10 per cent ad valorem, as under the act of 1913. Sashes and window frames included in the paragraph on structural shapes in the act of 1913 are not mentioned in the Fordney bill and are consequently governed by the catchall clause in paragraph 393. The result of this omission is that the ad valorem duty on sashes and window frames is increased from the 25 per cent ad valorem duty of paragraph 312 (governing structural shapes) to 35 per cent in paragraph 393. The proposed duty in paragraph 393 is three and one-half times as great as the existing duty (act of 1913) with the added handicap of the ad valorem rate being reckoned on market values in this country and not on market values in England. Mr. Thayer advocates the 10 per cent ad valorem duty on the fol- lowing grounds: (1) The present 10 per cent duty dates from 1913 and under it competitors in this country prospered and largely in- creased their business, while the business of importers remained practically stationary; (2) only two competitors in this country ap- DIGEST OF TAB1FF HEARINGS, H. R. 7456. 185 peared before the Ways and Means Committee to urge an increase in duty, and these two, namely, The International Casement Co., of Jamestown, N. Y., and the Crittall Casement Window Co., of Detroit, Mich., are both offshoots of English competitors. Mr. Thayer contends that the present duty of 10 per cent fully covers the difference, if any, between labor and material in England and the United States. Furthermore, the duty of 35 per cent pro- posed under the present act would drive the English concerns out of American markets and to that extent reduce revenue. PARAGRAPH 315. COLD-ROLLED AND TEMPERED STEEL. FAVORING PROPOSED OR HIGHER DUTIES : The Athenia Steel Co., Athenia, N. J. (Brief; no appearance at hearings.) Comparability. The labor cost of producing cold-rolled and tem- pered steel is about 70 per cent of the total. Foreign concerns, pay- ing wages 50 per cent less than those paid by American manufac- turers, are therefore able to sell goods in this country below the American cost of production. Prices on hot-rolled material in Sweden, Germany, and other countries do not differ materially from domestic prices on similar grades, but on more highly finished mate- rial Swedish prices are very much lower. In January, 1921, the labor employed in American mills manu- facturing cold-rolled strips and wire received from $8 to $12 per day, and the workmen in a Swedish mill, producing identically the same grades and similar amounts per day, received 15 crowns approximately $3.75. Wage rates in Germany were and are lower than Swedish. In normal times German workmen received 8 to 9 marks per day, or $2 to $2.15. In January, 1921, they received 40 to 50 marks only 60 to 75 cents per day. In August, 1921, Ameri- can wages had been reduced about 20 per cent from the above figures, but similar reductions had taken place in Sweden and probably in Germany. After the cold-rolling process several further manufacturing processes are required, such as tempering, for which American labor receives $8 to $12 per day; polishing and coloring, at but slightly lower wages; and inspecting, paid for at the rate of $7 to $9 per clay. These aclditional processes make the cost of tempered and polished material greater by approximately 50 per cent than cold rolled, and all the added cost is labor. Tempered, polished, and crude clock-spring material, selling at 35 cents per pound, costs in the United States 31 cents per pound, of which 21.70 cents is labor. The German cost, calculated on the basis of labor at 75 to 80 cents per day, would be, roughly, one-tenth of the American cost, or 3.10 cents per pound. Swedish cost, based on labor at $3.75 per day, would be from one-half to two-thirds less than the American cost, or 15 cents per pound. Rates suggested. A duty of 50 per cent ad valorem on all cold- rolled steel and 60 per cent on tempered and polished steel. 186 DIGEST OF TARIFF HEARINGS, H. R. 7456. PARAGRAPH 320. ELECTRIC STORAGE BATTERIES. WITNESS. FAVORING PROPOSED OB HIGHER DUTIES : The Edison Storage Battery Co., Orange, N. J. (Brief; no appearance at hearings.) Rates suggested. The company states as its opinion that a truly protective rate for electric storage batteries should be 40 per cent or more. In the tariff of 1897 lead batteries were protected by a rate of 45 per cent. At present the rate on pig lead is nearly 50 per cent. The proposed rate of 30 per cent in H. R. 7456 would subject the industry to overwhelmingly unfair competition which would close American factories and throw a large number of American workmen out of work. PARAGRAPH 321. ANTIFRICTION BALLS. WITNESS, AND INTEREST REPRESENTED. REQUESTING RECLASSIFICATION : Mr. Adolph E. Brion, representing Peter A. Frasse & Co., importers, New York City. Hearings : Pages 1819-1823. Costs and selling prices. In 1917, one-eighth-inch balls of very high quality sold for 67 cents a thousand; to-day (1921) they are selling from $1.80 to $2.40 per thousand. This is because there is so little competition. Size of industry. There are seven manufacturers of steel balls and one of them practically monopolizes the entire market. There is really only one large plant to-day. Rates suggested. Paragraph 321 should be divided so as to classify balls and rollers separately from the finished product, as the ball- bearing manufacturers are buyers of balls and would not try to keep the tariff so high. With a small number of steel-ball manufacturers, it is possible to fix arbitrary costs, which would make importation of steel balls almost impossible. Increased prices to the users of steel balls are inevitable on an American valuation basis. PARAGRAPH 325. ANVILS. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Campbell M. Voorhees, representing anvil manufacturers; address, Columbus, Ohio. Hearings : Pages 1826-1830. Costs and selling prices. Labor is about 50 per cent higher than it was at the beginning of the war. The freight on coal costs as much as the coal. Labor and overhead in the cost of the anvil are 70 to 80 per cent of total cost, leaving 20 to 30 per cent for materials. The selling price in 1918, 1919, and 1920 was 20 cents per pound. The average price in 1921 is 15 cents per pound. The Swedish anvil at the present time is being imported into this country, with prices ranging about 12^ cents per pound delivered to the interior of the United States. DIGEST OF TARIFF HEARINGS, H. R. 7456. 187 Size of industry. The total investment of machinery and plant in the United States' anvil industry is approximately "$750 ,000 to $1,000,000. The domestic capacity is about 200 to 300 per cent of the domestic consumption. The actual normal domestic production is approximately 4,500,000 pounds per year. Comparability. The foreign product is directly competitive, owing to lower costs of labor and freight rates. Rates suggested. A specific duty of 2 cents per pound. With an average selling price over a period of years of 10 cents per pound, 15 per cent ad valorem on American valuation would be 1^ cents per pound. Considering 10 cents per pound as the average selling price, a specific duty of 2 cents per pound would be 20 per cent ad valorem, American valuation. PARAGRAPH 329. CHAINS. WITNESS, AND INTERESTS REPRESENTED. PAVORING PROPOSED OR HIGHER DUTIES : Mr. David S. Day, representing chain manufacturers; address, Bridgeport, Conn. Hearings : Pages 1830-1839. Costs and selling prices. Actual comparative costs of manufacture In Germany and in the United States are not available. German com- mon laborers in chain factories were paid at the rate of 65 marks a day in December, 1920, which was the equivalent of $1. as compared with 46 cents an hour for an 8-hour day, or $3.68 a day, in the United States. German wages for this class of workers are therefore only 27 per cent of those paid in the United States. The labor com- ponent in the cost of manufacture averages 35 per cent in the larger sizes to 60 per cent in the smaller sizes of chain. The labor cost in the United States ranges from 35 to 60 cents out of each dollar's worth of goods produced, while the corresponding labor cost in Ger- many would average from 9.4 cents to 12.5 cents. Except, therefore, in classes of chain having the lowest labor component, the specific duty of 25 per cent for machine and sprocket chain and 20 per cent for "other classes of chain will not even cover the differential between German and American labor. The importers of foreign chain are underquoting American manufacturers to a very large degree some- thing like 40 per cent. Size. English price at $4.86. English pric.eat American factory cost pounds. IJ-inch ..'.... $7.25 $6.12 $8.45 IJ-inch 7.02 5.96 8.01 2-inch 7.72 6.44 8.92 2J-inch . . . 7.90 6.57 7.97 2J-inch 8.00 6.66 8.01 Size of industry. The United States investment at the present time in the chain-manufacturing industry and in articles fabricated from chain is estimated at $20,000.000, and the number of men em- 188 DIGEST OF TARIFF HEARINGS, H. R. 7456. ployed in the industry as between 8,500 and 10,000. The amount of the investment in the manufacture of anchor chain is approximately $2,000,000, and the number of men employed is approximately 1,500. Comparability. Direct competition between the domestic and the foreign producer has been largely confined to chain under five- sixteenths of an inch in diameter. Rates suggested. Chain and chains of all kinds to have specific duties coupled with a minimum ad valorem duty of 25 per cent. In chains less than five-sixteenths of an inch in diameter, going down to the very smallest sizes, the question of weight is out of all propor- tion to the value of the product. Therefore on the small size of chain the bill gives neither revenue nor protection. An ad valorem duty of 25 per cent based upon American valuation would not exceed the ad valorem duty of 45 per cent on foreign valuation under normal conditions prescribed in previous tariffs. The recommendation is therefore made that section 392 of the House bill be amended to read as follows : Paragraph 392 : Chain and chains of all kind, made of iron or steel, not less than three-fourths of 1 inch in diameter, 1 cent per pound ; less than three- fourths and not less than three-eighths of 1 inch in diameter, 1J cents per pound; less than three-eighths and not less than five-sixteenths of 1 inch in diameter, 4 cents per pound; sprocket and machine chains, of iron or steel, and parts thereof, 30 per cent ad valorem ; anchor or stud-link chain, 2 inches or more in diameter, 1$ cents per pound ; less than 2 inches in diameter, 2 cents per pound ; but no chain or chains of any description, except anchor and stud-link chain, shall pay a lesser duty than" 25 per cent ad valorem: Prorided, That all articles manufactured wholly or in chief value of chain shall not pay a lower rate of duty than that imposed upon the chain of which it is made, or of which chain is the component material of chief value. PARAGRAPH 337. CARD CLOTHING. WITNESS, AND INTEBEST KEPRESENTED. FAVORING LOWER DUTIES: Mr. Joseph F. Lockett, representing Leigh & Butler, importers; address, Boston, Mass. Hearings : Pages 1839-1851. Costs and selling prices. The cost to the foreign manufacturer to set the points into the foundation is nearly 100 per cent more than the cost to the American manufacturer. This is because the Ameri- can " setting machines " are run at far greater speed than the Eng- lish machines, and produce a much larger quantity of card clothing per hour. Each American " tender " operates twice as many setting machines as each English operator. A unit of 272 square feet of No. 120 card clothing sells in the United States for $691.15. The English article, landed in New York less duty, costs $456.94, with the pound sterling at $3.70. The duty under the Fordney bill would be $241.90, making a total cost of Comparability. American cotton mills say that the English card clothing is a much superior product, and with a prohibitive tariff the American mills could not compete in the world's markets, especially in the finer grades of cotton goods. Rates suggested. The rate as it now stands in the Fordney bill, based upon American valuation, would be absolutely prohibitive as DIGEST OF TARIFF HEARINGS, H. R. 7456. 189 to card clothing. The duty of $241.90 on 272 square feet of card clothing approximates 89 cents per square foot, an advance of 100 per cent over the Payne-Aldrich rate of 45 cents per square foot. A duty at 18 per cent on American value of $691.15 would equal $124.40, approximately equivalent to 45 cents per square foot. A rate on card clothing not higher than 40 cents per square foot, or 18 per cent ad valorem based upon American valuation, is strongly urged. Either of these would provide ample protection to the Ameri- can manufacturer. A specific duty is favored as it would help the Government officials in estimating the revenue, lessen the likelihood of litigation, and be better and fairer for all concerned. PARAGRAPH 339. ALUMINUM WARE. WITNESS, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. B. C. Ziegler, representing the aluminum-ware manufacturers of the United States; address, West Bend, Ind. Hearings : Pages 1851-1869. Costs^ and selling prices. Manufacturing costs in Germany are approximately 65 to 70 per cent lower than in the United States. The labor cost of producing aluminum ware in Germany is less than one-eighth of the labor cost of producing similar ware in the United States, and the raw material used costs probably one-half or less in Germany than in this country. In America an aluminum utensil costing $1 to produce represents 50 cents labor and 50 cents material cost, and for a similar article made in Germany the cost represents 6 cents for labor and 25 cents for material, or a total of 31^ cents. The selling prices of German aluminum ware at the present time are artificially cheap, because of the depreciated value of the Ger- man mark. The price of domestic aluminum ware is now about 35 per cent less than it was a year ago, and it is about 75 per cent higher than the prewar price, due to the higher cost of raw material and the increased cost of labor. Size of industry. A brief was presented on behalf of 34 manu- facturers of aluminum ware in the United States. Thirty-two out of the 34 manufacturers are completely independent of the Aluminum Co. of America, which is a minority stockholder in one of the 34, leaving but 1 company out of the 34 which might be considered controlled or dominated by the Aluminum Co. of America. The manufacturers of aluminum ware herein represented are independent and competing concerns. Rates suggested. Fifteen cents per pound and 45 per cent ad valorem based upon American valuation, because of the difference in the cost abroad and here as compared with the cost before the war. The following wording of the paragraph is proposed : Articles or wares not specially provided for in this act, composed wholly or in part of aluminum, and whether wholly or partly manufactured, 15 cents per pound and 45 per cent ad valorem. The 45 per cent ad valorem duty recommended is the one that, with the exception of the last eight years, prevailed almost continuously since 1883, and the suggested additional duty of 15 cents per pound 190 DIGEST OF TARIFF HEARINGS, H. R. 7456. would serve to prevent undervaluation and also, in a small degree, supplement the ad valorem duty. Under the present low value of the German mark the cost of export by Germany, translated into American dollars, is so low that any duty imposed would be of little avail in preventing the flooding of American markets unless such duty were based upon the value of the goods as produced in this country. Remarks. As previously stated, the rates asked are 15 cents spe- cific and 45 per cent ad valorem. Assuming the cost of production in Germany to be 31 or 32 cents a pound, and adding 8 or 9 cents for freight to the United States and a fair profit, the American , importer can buy this article in New York for about 40 cents. - On this basis the following indicates the result of applying the rates asked for with American valuation : Assume that a pound of fabricated aluminum is worth $1, and the amount paid by the American importer 40 cents. Adding 45 per cent as ad valorem duty and 15 cents for the specific, the amount is $1. This indicates that even with the proposed rates the imported German article would slightly undersell the American article. If the German article can be bought in New York for 40 cents a pound, the rates are adequate. If it can not, the rates are inadequate ; and if the German article costs more than 40 cents, the tariff, of course, would be too high. But in that case there is no danger that the American consumer will have to pay artificially high prices for aluminum ware, for three reasons : ( 1 ) The actual and keen competi- tion between American manufacturers of aluminum ware ; (2) alumi- num ware must compete in the United States with enamel ware; and (3) the present manufacturing capacity of aluminum-ware man- ufacturers is three or four times the consumption. In a supplemental brief dated August 15, 1921, reference is made to the brief of March 16, 1921 (cited above), with a request that the two be considered together. The later brief sets forth the argu- ments in support of the request for higher duties, pointing out that a rate of 28 per cent ad valorem is inadequate to afford any measure of protection to this American industry. PARAGRAPH 339. ENAMEL WARE. INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : American manufacturers of enamel ware. (Brief.) REQUESTING RECLASSIFICATION : L. D. Calm Co., importers, New York City. (Brief.) Hearings: Pages 1869-1884. Witness : American manufacturers of enamel ware. Costs and selling prices. The table below, comparing labor costs in Germany and the United States, shows that the cost of labor in Germany to-day (1921), basing the value of the mark at 2 cents American money, is just one-eighth of the cost for the same work in the United States. DIGEST OF TARIFF HEARINGS, H. R. 7456. 191 United States, per hour (cents). Germany, per hour Cents. Marks. Machinists 2? 62 1 47 9 9 8 5t 9 ? 9 5 * 1 2 4 3 2 4 2 4 3 Spinners, beaders, small punch presses Riveters and welders Picklers Packers Common labor 57i 7* 3] On the basis of this tabulation of comparative wages and of mate- rial costs an expert of the Treasury Department figured that it would require an ad valorem duty of 767 per cent to equalize the difference in the cost of production of enameled ware in Germany and the United States. The ratio of labor cost to the total cost of production is 37 per cent. Adding to this the indirect labor, such as clerks, foremen, office force, etc., it is seen that the total cost of labor is easily 50 per t-: rf w ods are as follows: American hacksaw blades, $7.90 per gross; rench, $4.45. American narrow band saws, $1.51 ; French, 88 cents. Rates suggested. On band saws 35 per cent ad valorem and on other saws 25 per cent ad valorem ; on steel strips, tempered only or tempered and polished, a specific duty of 10 cents per pound and 20 per cent ad valorem. In the past, band-saw steel has been imported into this country and sold directly to the users of sawmills for their filers or the employees in their filing room to make up into finished saws ; this put a -large amount of equipment out of commission in the saw factories. Where the rates of duty are intended to cover band-saw steel there should be specific reference to steel strips in coils or otherwise, if tempered or tempered and polished, carrying a specific duty of 10 cents per pound and 20 per cent ad valorem. Witnesses : E. C. Atkins & Co., Indianapolis, Ind. ; Henry Disston & Sons. Philadelphia, Pa. ; and the Simonds Manufacturing Co., Fitchburg, Mass. (Joint brief; no appearance at hearings.) Costs and selling prices. E. C. Atkins & Co. are able to manufac- ture in their Canadian factory, paying Canadian dollars for labor, and sell the product in the United States at United States prices in American dollars at about even figures, the duty being offset by the exchange rate. In making the following comparisons between domestic costs and foreign selling prices the domestic load is figured as it was. not as it is. For example : 4-inch band saw Domestic cost, per foot $0. 85 Peugeot Freres, France, sells at, per foot $0. 45 Plus 15 per cent American valuation, per foot . 16 .61 Difference per foot . 24 Hacksaw blades Domestic, 12 by J by 22-inch gauge, cost, per gross 7. 90 Ritsche & Co., Frankfort, sell at 3.60 francs per dozen, or per gross 3. 24 Plus 15 per cent per gross 1. 21 4.45 A difference per gross of 3. 45 Narrow-band saws, 1-inch wide Domestic, cost per meter .291 Peugeot's price per meter . 18 Plus 15 per cent, American valuation . 038 Peugeot total, duty paid .218 Difference .0745 DIGEST OF TARIFF HEARINGS, H. R. 7456. 195 Comparing selling prices on three sizes of narrow band saws, f , 1, and 2 inch, the domestic extreme price for 3 meters (1 meter of each size) is $1.15 compared to Peugeot's price of 65 cents. Even with 15 per cent American valuation duty added, the foreigner's price is only 88 cents. Crosscut saws made in Sweden are available at a price of $1.94 for a 5-foot common tooth saw. Adding 15 per cent duty at Ameri- can valuation on the domestic price of $2.80, the Swedish saw is bought for $2.36 or, with 25 per cent duty, for $2.64. Foreign selling prices on circular saws vary from $1.66 per unit in France to $2.35 in Sweden, as compared with the domestic extreme selling price of $3.20. Size of industry. The signers of the brief represented an industry with an invested capital of $20,000,000 to $25,000,000, employing from 6,000 to 7,000 workers, exclusive of office and sales employees, and producing an output valued at from $25,000,000 to $30,000,000. Rates suggested. All saws to carry an ad valorem rate, based upon American valuation, of 25 per cent, except band saws, which should carry at least 35 per cent ad valorem. Steel strips, tempered, or tempered and polished only, should carry a specific duty of 10 cents per pound and 20 per cent ad valorem, because they are sold to be toothed and finished, to the detriment of the finished band-saw industry. Remarks. The wage situation is accurately reflected in foreign competition. For example, wages in this industry, here and abroad, compare as follows: [Cents per hour.] Type of labor. Wages in the United States. Wages in Europe. Saw smiths . . 65-80 314 Machinists 55-80 28 35 19J The European wages cited are not the low wages of Germany, but are wages actually paid in France, figured on a basis of a franc at 8 cents. PARAGRAPH 343. NEEDLES. WITNESSES. FAVORING PROPOSED OR HIGHER DUTIES : The Boye Needle Co., Chicago, 111. (Brief.) Potter & Snell, Deep Pdver. Conn. (Brief.) FAVORING LOWER DUTIES : Durbrow & Hearne, New York, N. Y. (Brief.) J. A. Coates & Sons (Ltd.), East. Orange, N. J. (Brief.) Witness: The Boye Needle Co., Chicago, 111. (Brief; no appear- ance at hearings.) Costs and selling prices. The company's manufacturing cost for 1.000 crochet needles is $22.01, 90 per cent of which is made up of labor, 10 per cent of material. 196 DIGEST OF TARIFF HEARINGS, H. R. 7456. The average market price of crochet needles in Europe is " $10 per 1,000, United States funds." The average price to the American jobber is $3.25 per gross $22.56 per 1,000. The duty provided for in H. E. 7456 would therefore bring the cost of crochet needles to the American importer as follows: Per thousand. Crochet needles $10. 00 Estimated freight, consular, etc .75 Duty, 25 per cent of American price ($3.25 per gross) 5.64 Special duty 1. 15 Total 17.54 The difference between the company's manufacturing cost and the importer's cost under H. E. 7456 would amount, therefore, to $4.47. Size of industry. The manufacture of crochet needles is a new in- dustry in this country, having been started during the war. The companv knows of only three other manufacturers in the United States. " Rates suggested. An ad valorem rate of 60 per cent. Witness: Potter & Snell, manufacturers of bright wire goods, Deep Elver, Conn. (Brief; no appearance at hearings.) Costs and selling prices. The cost of a steel crochet hook lies almost entirely in the labor item, representing about 90 per cent of the total. Steel crochet hooks are sold almost entirely through the 5 and 10 cent stores and department stores. The selling price is thus fixed at 5 cents for the cheaper and 10 cents for the better grades. It makes no difference how cheap these houses buy the goods ; their selling price remains the same and extra profit is gained by buying the German goods. Size of industry. The principal part of the firm's business is the manufacture of steel crochet hooks ; about $150,000 is invested in the business. Rates suggested. Steel crochet hooks should be given a specific duty of <$1.15 per 1,000 plus an ad valorem duty of 35 per cent. The higher duty will not increase the selling price to the consumer, but the seller's profit will be less and American manufacturers will be able to meet German competition and make a fair profit. Remarks. Steel crochet hooks are more of a luxury than a ne- cessity and should be taxed accordingly. They are used for cro- cheting lace and other articles of personal adornment, and not for making the necessities of life. H. E. 7456 provides a duty of $1.15 per 1,000 and 25 per centum ad valorem. Although skilled labor is required in their manufacture, it is noted that, in the same para- graph of the proposed law, tape and knitting needles, and in para- graph 344, fishhooks articles requiring no skilled labor in their manufacture and certainly no more of a luxury than steel crochet hooks are given higher rates of duty. Also," in paragraph 372, lace-making machines are given an ad valorem duty of 35 per cent. Crochet hooks should not be classified as " crochet needles " ; they are not needles, but hooks. Witness: Durbrow & Hearne, manufacturers and importers, New York City. (Brief; no appearance at hearings.) DIGEST OF TARIFF HEARINGS, H. R. 7456. 197 Costs and selling prices. Spring beard needles of American manufacture sell in this country to-day for about $3.50 per 1,000. Needles for hand-embroidering machines, which are not made in this country, cost about $1.20 per 1,000. There is a great deal of variation in the cost of sewing-machine needles. Ordinary latch needles are estimated to be worth not over $8 per 1,000. Rates suggested. Having regard to the selling prices cited above, the brief points out that the duties under H. R. 7456, converted into ad valorem, would range from 55 to 125 per cent. Attention is called to the latter part of the paragraph, referring to needle cases or needle books. There are bona fide needle cases, in which the value of the case far transcends the value of the contained hand- sewing needles, and a duty on such an article is highly proper. So long, however, as hand-sewing needles are duty free it is illogical to place a duty on the needle case where the value of the needle case, in many instances, is no greater than the value of the ordinary wrap- pings in which the hand-sewing needles are put up. In other words, where a needle case is substituted for the ordinary envelopes and wrappings, there should be no duty on the goods. Witness: J. A. Coates & Sons (Ltd.), manufacturers of needles, etc., East Orange, N. J. (Brief; no appearance at hearings.) Size of industry. Thirty-five or forty years ago there were about a dozen manufactories of sewing-machine needles in America. Fol- lowing their absorption by the Torrington Co., of Torrington, Conn., all were closed down but two, the " National " at Springfield, Mass., and the " Excelsior " at Torrington, Conn. There are only three other manufacturers of sewing-machine needles in America the Singer Sewing Machine ^Co., Elizabeth, N. J. : the National Sewing Machine Co., Belvidere, 111.; and the New Home Sewing Machine Co., Orange, Mass. Although there are dozens of others, including the Coates Co., who claim to be manufacturers, not one sewing-machine needle is made in the United States outside of these four plants, and the latter three make them as a minor detail of their business as sewing machine makers. Remarks. Mr. John Alyord, practically the sole owner of the Torrington Co., is a multimillionaire from the monopoly that he has enjoyed in the manufacture of sewing-machine needles. The ques- tion arises: Is it fair to add to these millions at the expense of the few importers of needles and the consumer? PARAGRAPH 349. METAL TROUSER BUTTONS, ETC. WITNESS, AND INTEBEST REPRESENTED. > FAVORING PROPOSED OR HIGHER DUTIES : The Universal Button Fastening & Button Co., Detroit, Mich. (Brief; no appearance at hearings.) Costs and selling prices. "Patent buttons" are buttons which come in two parts the button proper and the tack or staple, both of metal. A " patent button " in general demand is that described as the 27-line, close-top, plain brass button. This is one of the most popular buttons for overalls and costs the company $5.15 per gross. Its net selling price is $5.24. 7713422 14 198 DIGEST OF TARIFF HEARINGS, H. R. 7456. Size of industry. Practically all "patent buttons" in the coun- try are manufactured by the following companies: Scovill Manu- facturing Co., Waterbury, Conn. ; Universal Button Fastening & Button Co., Detroit, Mich.; Patent Button Co., Waterbury, Conn.; C. Radcliffe & Sons' Co., Newark, N. J. The Universal Button Fastening & Button Co. has approximately $1,000,000 invested in special machinery for making " patent but- tons " and button fasteners for attaching. ' This machinery can be used only in this business, and if the business is destroyed it is a total loss. Comparability. It is obviously impossible to obtain exact figures as to costs in Germany. Where comparisons could be made it is found that the cost of labor in Germany is about 9 per cent of that in the United States. The German can make the above-mentioned button for $1.59 roughly, a little more than one-third of the Amer- ican cost. Rates suggested. It is urged that paragraph 349 be amended to read as follows: Buttons of metal and part metal, three-fourths of 1 cent per line per gross ; and in addition thereto 20 per cent ad valorem ; metal buttons, embossed with a design, device, pattern, or lettering, 35 per cent ad valorem or the rate for plain metal and part-metal buttons, whichever is higher: Provided, That the term " line," as used in this paragraph, shall mean the line button measure of one-fortieth of 1 inch. Remarks. There is no logical reason for distinguishing between " metal trouser buttons " and " buttons of metal not specially pro- vided for." The Universal Button Fastening & Button Co.'s chief button is known as an overall button, and is used mainly on overalls, but it is also used on trousers, coats, and underwear, and on rain- coats. During the war it was used extensively on shelter tents. It is believed that a button similar to those made by the Universal Button Fastening & Button Co. would properly be called an " over- all " button and pay a duty of three-fourths of 1 cent per line per gross under the bill as now drawn as a " button of metal not specially provided for." But a foreign importer could call it a " trouser " but- ton and claim a duty of one-fourth of 1 cent per line per gross if it was a steel button or one-twelfth of 1 cent per line per gross if it was a metal button, not a steel or nickel bar button. There are apparently no customs decisions on this doubtful point. It is therefore urged that all attempted distinction in metal but- tons be done away with and that the same tariff be made applicable to all metal buttons. The pending bill provides for a duty of 35 per cent ad valorem on "metal buttons embossed with a design,, device, pattern, or lettering." In some cases the duty of three- fourths of 1 cent per line per gross plus 20 per cent ad valorem T which is provided for plain buttons in the amendment herein urged, will probably be more than 35 per cent ad valorem. Obviously an importer could have the duty reduced by embossing his buttons. This would be particularly profitable, as the embossed button is the more desirable article. To prevent such an evasion the amendment makes the rate for embossed buttons 35 per cent ad valorem " or the rate for plain metal and part-metal buttons, whichever is higher " DIGEST OF TARIFF HEARINGS, H. E. 7456. 199 PARAGRAPH 349. METAL BUTTONS. WITNESS, AND INTEKEST REPRESENTED. REQUESTING RECLASSIFICATION : Mr. James Turner, Detroit, Mich., representing the Universal Button Fastening Co. and three other concerns. Hearings : Pages 5336-5343. Costs and selling pnces. The average wage per hour for machinists in Germany in iron and steel and metal working industries, February, 1920. was 3.52 marks; with amark value of $0.0118. These wages were, in JJnited States currency, 4.15 cents. Wages paid machinists of the Universal Button Fastening & Button Co., 45 cents; skilled mechanics and tool makers are paid 75 to 95 cents. A " patent button " in general is that described as the 27-line close- top plain brass button one of the most popular for overalls. This button cost the Universal Button Fastening & Button Co. $5.15 per great gross. Selling price, net, $5.24 a great gross. Effect of duty asked for : Overall button, 27-line, American valua- tion, $5.25 : Three-fourths of 1 cent per line per gross, or 9 cents per line per great gross $2.43 20 per cent ad valorem, American valuation ($5.24) __. . 1.05 Total duty 3. 48 Differential (cost $5.15 $3.48) 1.67 Less freight rate to America__. . 08 Differential less freight rate 1. 59 It will be seen, therefore, that a German who can make this button for $1.59, or a little more than one-third of the American cost, can undersell. The German cost of labor was only 9 per cent, or one- eleventh, of that in the United States when the mark was at more than double its present value. Rates suggested. Buttons of metal and part metal, three-fourths of 1 cent per line per gross; and in addition thereto, 20 per cent ad valorem; metal buttons embossed with a design, device, pattern, or lettering, 35 per cent ad valorem, or the rate for plain metal and part metal buttons, whichever is higher, provided that the term " line " as used in this paragraph shall'mean the line button measure of one- fortieth of 1 inch. Remarks. There is no logical reason for distinguishing in the tariff between " metal trouser buttons " and " buttons of metal not specialty provided for." The witness's company is uncertain whether imported buttons similar to those (overall buttons) it produces would be classed as " metal trouser buttons " or as " buttons of metal not specially provided for." There are apparently no customs de- cisions on this doubtful point. Imports of metal trouser buttons have been negligible. The distinction in classification between metal trouser buttons and metal buttons n. s. p. f . was originally put in the tariff 25 years ago to reach a class of highly polished steel buttons then in vogue but now practically obsolete. An amendment is pro- posed with respect to embossed metal buttons. Instead of simply providing for an ad valorem rate of 35 per cent, the proposed amend- 200 DIGEST OF TARIFF HEARINGS, H. R. 7456. merit adds " or the rate for plain metal or part metal buttons, which- ever is higher." In some cases the duty of three-fourths of 1 cent per line per gross, plus 20 per cent ad valorem, provided for plain but- tons will be more than 35 per cent. As the paragraph now stands, an importer could, in some instances, bring in embossed buttons, which are the most desirable ones, at a lower rate of duty than that imposed on plain ones. German manufacturers are known to be in possession of complete button machinery. In a brief dated December 1, 1921, the witness's company distin- guishes " patent buttons " as those coming in in two parts, the button proper and the back or staple, both of metal. The brief recapitulates the leading features of the oral testimony. PARAGRAPH 351. PENS. WITNESS, AND INTERESTS REPRESENTED. FAVORING LOWER DUTIES : Mr. F. T. Blakeman, representing the Spencerian Peri Co. and Joseph Gillott & Sons (importers) ; address, New York City. Hearings: Pages 1889-1892. Costs and selling prices. The cost of English labor in this indus- try is 66 per cent of the total cost, although it has been asserted, in recent Ways and Means hearings, that it is only 30 per cent. The prices of the Spencerian Pen Co. and Joseph Gillott & Sons to the trade are, respectively, 46 per cent and 57 per cent higher than the lowest price quoted to the trade by domestic manufacturers, and the prices quoted by the Spencerian Pen Co. on Federal and school contracts are 66 per cent higher than the domestic quotations. The prices quoted by domestic manufacturers on export goods were from 25 to 33^ per cent less than the prices offered to the home trade. The purchasing agent for the Government of Porto Rico has accepted the bid of a leading domestic pen manufacturer of 43 cents per gross on a school-supply proposal. The lowest net trade prices per gross are: Domestic, $0.65; Spencerian, $0.95; Gillott, $1.02. The school prices per gross are: Domestic, $0.57; Spencerian, $0.95; Gillott, $0.65. The Government prices per gross are : Domestic, $0.56 ; Spen- cerian, $0.95. Size of industry. Last year, of 2,950,000 gross manufactured in the United States, 450,000 gross were exported as against an impor- tation of 775,000 gross. Rates suggested. That the present specific duty of 8 cents a gross be allowed to remain, the volume of imported steel pens being very small in comparison with the total number of pens made in this country. Under the present duty American manufacturers can un- dersell the imported article in the United States and can afford to offer their products abroad at much below the domestic price. It is evident, therefore, that they are not in danger of competition with foreign-made steel pens. The proposed increase of 4 cents would work an undue hardship on the importers of steel pens, and especially on the Spencerian Pen Co., who import 67 per cent of the foreign pens used in this country. DIGEST OF TARIFF HEARINGS, H. R. 7456. 201 This would result in the importation of fewer pens, with a constant decrease in revenue to the Government. Furthermore, owing to the high price of imported pens, the interests of the domestic pen manu- facturers are not jeopardized by present conditions. PARAGRAPH 352; ALSO PARAGRAPH 1450 OF SCHEDULE 14. METAL PENCILS AND LEAD REFILLS. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES: Mr. C. J. Frechette, representing the Wahl Co., as secretary-assistant treasurer. Hearings: Pages 1892-1901. Costs and selling prices. The style of pencil retailing at a dollar is sold to the dealer at 60 cents and costs a little over 57 cents to make. The labor cost is approximately 34 cents, and the material cost 23 cents. The German total cost is estimated at 28.93 cents. The style retailing at $3 is sold to the dealer at $1.80 and costs $1.37 to make. A similar pencil can be manufactured by German concerns at an estimated cost of 69.63 cents. Size of industry. On January 1, 1921, the company's investment in land, buildings, machinery, tools, and equipment was $1,513,781. The factory contains 6 acres of floor space; the manufacturing ca- pacity is 40,000 pencils and 10,000 fountain pens per day, and when the factory is run at full capacity approximately 2,000 operators are employed. The net sales for 1920 amounted to $7,382,850, and for the first six months of 1921 to $2,413,773. To-day there are over 10,000,000 of these American pencils in use throughout the world, representing sales aggregating approximately $12,000,000 at wholesale, or about $20,000,000 at retail prices. In addition, the lead-refill business, up to June 30, 1921, exceeded $900,000 at wholesale prices, equivalent to over $1,500,000 at retail prices. Comparability. No definite information is given, but the inference is that the American and the German product are comparable. Rates suggested. A duty of 50 per cent ad valorem on American valuation on both pencils and lead for refilling. PARAGRAPH 354. POCKETKNIVES. WITNESS, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES: Mr. Charles F. Rockwell, representing American pocketknife manufac- turers; address, Meriden, Conn. Hearings: Pages 1901-1906. Costs and selling prices. A German cutlery operative receives in the American equivalent $3.75 per week as contrasted with $30 per week for the corresponding American workman. Eighty per cent of the cost of manufacture is labor. The price of a German stag knife is $4.78, while the price of a comparable American knife is $12.25. In this instance the German is the better knife. Size of industry. Witness represents 30 American pocketknife manufacturers, who employed 6,200 men a year ago and at the present 202 DIGEST OF TARIFF HEAEIXGS, H. B. 7456. time employ less than 1,800 men; at leasfc 600 or 800 of these are working on short time. Rates suggested. The rates as provided in paragraph 354 to be continued. They do not equalize the increased difference between labor in this country and abroad,* particularly as over 80 per cent of foreign competition is with Germany. PARAGRAPHS 354, 355, 357, AND 358. OTHER CUTLERY. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OH HIGHER DUTIES : Mr. J. A. Chrestensen, representing manufacturers of cutlery; address, Franklinville, N. Y. FAVORING LOWER DUTIES: Mr. Robert N. Kastor, representing the Cutlery Importers' Association. Hearings : Pages 1929-1936. Witness: Mr. J. A. Chrestensen, representing manufacturers of cutlery. Costs and selling prices. The following examples illustrate im- ported values as compared with American selling prices: A 9-inch cook knife costs in Germany $3.07 per dozen. A comparable knife of American make sells for $11 per dozen. The duty on the foreign knife would be $4.81, and 5 per cent for freight and insurance would be 15 cents, making a total landed cost of $8.03 per dozen. This for- eign knife was sold to the firm's customers upon their requisition for $20 per dozen. An 8-inch butcher knife costs in Germany $1.73 per dozen. A com- parable knife of American make sells for $6 per dozen. The duty on the foreign knife would be $3.06, and 5 per cent for freight and in- surance would be 9 cents, making a total landed cost of $4.88. This foreign knife was sold to the firm's customers under an invoice at $12 per dozen. A 10-inch butcher knife costs in Germany $2.37 per dozen. A com- parable knife of American make sells for $8.37 per dozen. The duty on the foreign knife would be $3.89, and 5 per cent for freight and insurance would be 12 cents, making a total landed cost of $6.38. This same 10-inch butcher knife can be imported to-day under the Underwood bill, including the 5 per cent for freight and insurance, for $3.08, as compared with the price of the American article of $8.37. Rates suggested. The schedules already in this paragraph (355) are recommended. Hearings : Pages 1907-1929. Witness: Mr. R. N. Kastor, representing the Cutlery Importers' Association. Costs and selling prices. The average wage paid in the United States is $19 per week, anil the average wage paid in Germany for the same kind of labor is $4, $5, or $6 per week. The following examples will illustrate the operation of the Amer- ican valuation plan : A boy's one-bladed knife costs 33 cents per dozen in Germany, and the American knife sells for $1 per dozen. The duty on this knife under the Fordney bill would be 90 cents per dozen, making a total cost of $1.23 per dozen, exclusive of ocean freight, insurance, expense of any kind, and profit to the importer. DIGEST OF TARIFF HEARINGS, H. R. 7456. 203 A 54-inch scissors costs 85 cents per dozen in Germany, and the American scissors sells for $2.27 per dozen. The duty on this scissors would be $3.19, making a total cost of $4.04 per dozen, exclusive of ocean freight, insurance, expense of any kind, and profit to the im- porter. A No. 525, five-eighths square-point razor costs $1.17 per dozen in Germany, and the American razor sells for $3.25 per dozen. The duty on this razor would be $2.90 per dozen, making a total cost of $4.07 per dozen, exclusive of ocean freight, insurance, expense of any kind, and profit to the importer. A pocketknife (No. 6066, a premium stock knife) costs' $4.78 per dozen in Germany, and the American pocketknife sells for $12 per dozen. 1 The duty on this knife would be $4.90 per dozen, making a total cost of $9.68 per dozen. That knife costs $7.91 in the American factory, and the European knife costs the importer to land, without insurance, freight, or expense of any kind, $9.68. The following table shows the cost to the importer of foreign-made cutlery and the percentage duty on foreign costs: Foreign Percent- Articles. cost in United States Dome?ti< value. Duty. Cost to importer age duty on foreign currency costs. Pocketknives: 404 $0 33 SI 00 tO 90 $1 23 272 614 DW .60 2.75 2.02 2.62 337 N 2000 St .80 3.60 3.48 4 28 435 6042 2.33 7.00 4.50 6.83 193 6066 4.78 1Z25 7.27 12.05 152 Scissors: 9338 oWnch .85 2.27 3 19 4 04 373 8764, Si-inch 1.35 3.70 3.69 5.04 274 1.535. 3}-inch. 3.23 5.75 4.13 7.36 128 2610 7i-inch 5.13 8.66 5.33 10 46 104 Razors: 520, 5/8 S. P 1.17 3.25 2.90 4.07 247 101, 5/8 S. P. .. 6.23 11.70 5.91 12.14 95 Table cutlerv: 2.79 3.50 3.14 5.93 113 55 stae C. set . . . 23.35 50.40 23.40 46.75 100 The following table illustrates the difference in duty when ap- plying the Fordney rates with American valuation and the same rates with foreign valuation : Article. Foreign value. Duty. Percent- age. Duty on domestic value. Percent- age on foreign value. Pocketknives: N 9090 $1.00 JO. 90 90 $3.76 376 579 j 2.00 1.80 90 4.65 232* 7915 P 3.00 2.10 70 7.65 255 Scissors: 102 4J-ineh 1.00 2.15 215 3.52 352 1060 6-inch 2.00 3.10 155 4.50 225 950 6-inch .... 3.00 3.45 115 5.20 173 Razors: 225 1.00 1 50 150 2.90 290 1552 2.00 2.04 102 4.50 225 1100 3.00 2.82 94 5.40 180 'This checks the testimony of Mr. Chas. F. Rockwell (page 1904). 204 DIGEST OF TARIFF HEARINGS, H. R. 7456. Paragraph 354, pocketknives, etc Paragraph 355, table cutlery, etc Paragraph 357, scissors, etc Paragraph 359, razors, etc Paragraph 361, pliers and nippers, etc On pocketknives ranging f rorfi $1 to $3 in foreign value the average duty on that value, as per the Fordney rates, is 83 per cent. But when the Fordney rates on these same goods are computed on the American valuation, the average percentage rate is increased from 83 per cent to 287 per cent. Size of industry. The figures of recent years indicate that the domestic industry turned out pocketknives valued at $10,000,000 a year. Rates suggested. The rates should be revised so as to provide straight ad valorem duties as follows: Per cent. 40 20 40 40 20 The rates of duty on cutlery, based upon American valuation, de- fined in the Senate Finance Committee's revision of section 402 o t the bill, would be an effectual bar against the importation of almost all cutlery, excepting special designs and patterns not manufactured in the United States. A duty of 40 per cent, computed upon American valuation, affords more than ample protection, because this rate is actually equivalent to an average rate of well over 100 per cent based on foreign valuation. It is evident from the table below that a straight ad valorem duty of 40 per cent on pocketknives, razors, and scissors, and 20 per cent on table cutlery, as suggested, would provide more than adequate pro- tection to domestic manufacturers, and at the same time permit the continuation of imports which, however, would pay a much higher rate of duty than under either the Payne-Aldrich or the Dingley bill. Table showing straight ad valorem duty of 40 per cent on pocketknives, scissors, and razors, and 20 per cent on table cutlery. Article. Foreign cost. Domestic value. Duty 40 and 20 per cent. Cost to importer. Percent- age duty on foreign cost. Pocketknives: 404 $0.33 $1.00 $0.40 $0.73 121 614 DW .60 2.75 1.10 1.70 183 N 2000 St 80 3 60 1 44 2 24 180 6042 2.33 7.00 2.80 5.13 120 6066 4.78 12.25 4.90 9.68 202 Scissors: 9338 5J-inch 85 2 27 90 1 70 106 876i, Si-inch . . 1.35 3.70 1.48 2.83 209 1535 Si-inch 3.23 5.75 2.30 5.23 71 2610 7J-inch 5.13 8.66 3.46 8.59 67 Razors: 5204 SP... 1.17 3.25 1.30 2.47 111 lOlf SP 6.23 11.70 4.68 10.91 75 Table cutlery: Wilson But 2.79 3.50 20 per cent. .70 3.49 21 35 Stag C . 23.35 50.40 10.08 33.43 43 The combination of specific and ad valorem duties on articles of cutlery is described by the witness as being : (a) Unscientific and arbitrary with reference to classification. DIGEST OF TARIFF HEARINGS, H. R. 7456. 205- (&) Unequal and unfair in operation. (c) Prohibitory as to a large class of goods. The following table of duties and percentages on pocketknives, scissors, and razors shows the uneven and inequitable operation of the Fordney bill at a glance : Value per dozen. Actual duty. Approx- imate percent- age. Value per dozen. Actual duty. Approx- imate percent- age. Pocketknives Do $0.50 55 $0.27 764 54 139 Scissors-Contd.... Do $1.80 5.00 $3.03 168 83 Do.... 1.25 .97* 78 Razors 1 00 1 50 150 Do. 1.30 1.59 122 Do 1 95 1 784 91 i Do.... 3.00 2.10 70 Do. 2 00 2 04 102 Do 3.20 3.36 105 Do 2.95 2.32J 79 Do 8.00 4 8 i 60 Do 3 00 2 82 Do 8.50 6.15 72 Do. 3.95 3 10J 78 Do 15.00 8.10 53 Do 4.0ff 3.60 90 60 2.01 334 Do 10 00 Do 1.75 2.41J 138 Remarks, The actual result of compelling each article to bear the name of the maker would destroy, in the witness's opinion, the hard work of 40 to 50 years which cutlery importers have put in to establish their own trade names and brands. It would furnish for- eign manufacturers with the best kind of free advertising. PARAGRAPH 357. SCISSORS AND SHEARS. WITNESS, AND INTERESTS REPKESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Camille L. Gairoad. representing manufacturers of scissors and shears.;.: address, Newark, N. J. Hearings : Pages 1936-1941. Costs and selling prices.-^A 7^-inch barber ^hears costs in Ger- many $4.59 per dozen. Under the Underwood bill there is a duty of $1.37 per dozen, making a total cost of $5.96 per dozen. This is sold by the retailer for $3 per pair. Based on the proposed tariff, the duty and German cost would equal $10.89 per dozen. An Ameri- can barber's shears comparable to the above shears would sell whole- sale at $11.40 per dozen. A scissors costing $5.13 in Germany also sells for $3 per pair. The American sample shown by the importer of German goods is not comparable. A comparable barber's scissors sells for $12.40 per dozen. The duty on the German scissors would be $6.74, making a total cost of $11.97 per dozen. A German scissors costing 85 cents per dozen is comparable to an American article that sells for $1.58 per dozen, instead of $2.27 per dozen, as is claimed by importers. 206 DIGEST OF TARIFF HEARINGS, H. R. 7456. PARAGRAPH 358. RAZORS. WITNESS, AND INTERESTS BEPBESENTED. FAVOBING PBOPOSED OB HIGHER DUTIES : Mr. H. L. Henry, representing manufacturers of standard razors ; address, Geneva, N. Y. Hearings : Pages 1945-1948. Costs and selling prices. German cheap razors are made of Bes- semer steel or a very cheap grade of Swedish steel and cost $1 per dozen. They are often packed in individual cases printed "Fully concave, fully! warranted," and the cases are marked $3 or $3.50 each. The American manufacturers make razors out of a high-grade steel. Size of industry. The nine factories represented employ nor- mally about 1,300 highly skilled artisans. The factory of the Geneva Cutlery Corporation, normally employing 650 to 700 people, is now employing about 90 to 100 and running on half time. Comparability. The German razor at $1.17 per dozen had been compared with a Torrey razor selling for $3.25 per dozen. Witness read a telegram from the Torrey Razor Co., stating that" the last quotation to Mr. Kastor (importer of German goods) was $4.05 per dozen. The Boker " Red Injun " razor had been compared with a razor made by one of the smaller American factories. They are not comparable in any sense of the word. The Boker razor is a beau- tiful piece of work made by bonus-paid workmen, and there is no better razor made than that " Red Injun." PARAGRAPH 359. DENTAL INSTRUMENTS. WITNESSES, AND INTEBESTS BEPBESENTED. FAVOBING PBOPOSED OB HIGHEB DUTIES : The Beloit Burr Manufacturing Co., Beloit, Wis. (Brief.) REQUESTING RECLASSIFICATION : Dr. Homer C. Brown, representing the National Dental Association, Colum- bus, Ohio. Witness: The Beloit Burr Manufacturing Co., Beloit, Wis. (Brief; no appearance at hearings.) Costs and selling prices. The average cost to the dentist of Amer- ican burrs is $9 per gross. The saving to the average American den- tist, paying $6 per gross for the German burr (costing the German manufacturer $1.44), will be limited to 2t^ cents per cavity op- erated. Comparability. The company has an offer, dated October 21, 1921, of German plain round burrs at 10.2 marks per dozen which, taking the then rate of exchange (six-tenths of 1 cent) and adding postage, would be equivalent to 12 cents per dozen burrs. As against this, the steel in a dozen of the company's burrs costs 3 cents and other items bring up the total cost per dozen to more than the 12 cents cited. Rates suggested. A duty which will bring up the cost to the im- porter to not less than $5 per gross. Hearings : Pages 1949-1951. DIGEST OF TARIFF HEARINGS, H. R. 7456. 207 Witness: Dr. Homer C. Brown. Size of industry. The manufacture of dental instruments is an American industry whose prominence is as well recognized through- out the world as is that of the American dentist. The ratio of ex- ports to imports exceeds 20 to 1, that is, for every dollar's worth im- ported, $20 worth is' exported. The dental-instrument industry is, therefore, entirely different from that manufacturing surgical in- struments. Comparability. American dental instruments are as good as, or better than, the foreign article, but there are a few items which are manufactured abroad, such as tube teeth, burr brushes and burrs, which many dentists like to have available. The imported articles, made for special purposes, have a very limited demand and are not manufactured in the United States. Rates suggested. In view of the fact that dental instruments are entirely different from surgical instruments and that, moreover, the bulk of the dental instruments imported consists of small attach- ments costing from 60 cents to $1 per dozen, dental instruments should be stricken from paragraph 359 and the following new para- graph incorporated in the bill : Dental instruments, or parts thereof, composed wholly or in part of iron, steel, copper, brass, nickel, aluminum, or other metal, finished or unfinished, 35 per cent ad valorem : Provided, That all articles specified in this paragraph, when imported, shall, when practicable, have the name of the maker and beneath the same the country of origin die-sunk conspicuously and indelibly on the outside, or, if a jointed instrument, on the outside when closed. The specific rate is deleted because the attachments mentioned have a very small unit value, and specific duties as proposed would advance the total ad valorem rate out of all proportion to the pro- tection needed. Dental-instrument manufacturers in conference with practicing dentists agree that classification as proposed is the only equitable means of treating dental instruments. The National Dental Association requests the Finance Committee to consider the 35 per cent rate (American valuation) proposed as tentative, only, until steps are taken to determine the equivalent duty accruing under foreign valuation. If it were found that the proposed 35 per cent duty is much in excess of the present duty (20 per cent) on dental instruments, the rate should be adjusted accordingly. PARAGRAPH 359. SURGICAL INSTRUMENTS. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. John J. Douglass, representing American Surgical Instruments Manu- facturers, Brooklyn, N. Y. Mr. E. J. Sovatkin, representing the Sklar Manufacturing Co.. Brooklyn, N. Y. FAVORING LOWER DUTIES: Mr. David Walker, representing the Kny-Scheerer Corporation, New York City. Brief of the Hospital Conference of the City of New York, the Hospital Association of Philadelphia, the Wisconsin Hospital Association, and the Illinois Conference of the Catholic Hospital Association of the United States, together with letters from various individual hospitals. The A. S. Aloe Instrument Co., St. Louis, Mo. (Brief.) 208 DIGEST OF TARIFF HEARINGS, H. R. 7456. Hearings : Pages 1951-1952. Witness: Mr. J. J. Douglass, representing American Surgical In- struments Manufacturers. Comparability. Japanese goods are not as high grade as the Ger- man, and the Germans are the ones that are feared. Rates suggested. American surgical instrument manufacturers are satisfied with the rates proposed in the Underwood bill as it passed the House, remembering that, under the Underwood bill, American manufacturers made only 20 per cent of the surgical in- struments used in this country. The proposed tariff, embodying the American valuation, would be satisfactory, as enabling American surgical-instrument manufacturers to make from 60 to 65 per cent of the goods used in the United States. That is what they should have, to give them a little opportunity in peace times as well as war. Wit- ness's firm, Fred Haslam & Co., is working only 20 per cent of the force it had a year ago. Hearings : Pages 1958-1967. Witness: Mr. E. J. Sovatkm, representing the Sklar Manufactur- ing Co. Costs and setting prices. Seventy-five to ninety-five per cent of the cost of surgical instruments is labor, paid for at 40 cents to 75 cents per hour in the United States and about 6 cents an hour in Ger- many. Germans to-day are selling just low enough to cut under the market here. Size of industry. There are about 50 manufacturers of surgical instruments in the United States. Contrary to the testimony of another witness, over 7,500 patterns of surgical instruments are made in this country. Comparability. American manufacturers can produce all kinds of surgical instruments if foreign competition were removed. Rates suggested. An ad valorem duty of 60 per cent plus the spe- cific rates proposed. Under a 50 per cent rate domestic plants would manufacture 60 per cent of the instruments used, while at 60 per cent, all instruments would be domestic except those which for some reason could not be made here. Surgical instrument costs form but a small part (one-tenth of 1 per cent) of the total expenditure of hospitals, and the duty would work but little hardship. Hearings : Pages 1956-1958. Witness: Mr. D. Walker, representing the Kny-Scheerer Corpora- tion. Costs and selling prices. Hemostatic forceps cost abroad $4.20; American wholesale prices of various domestic manufacturers are, respectively, $10.20, $10.20, $10.20, and $12. (See below under "Kates suggested.") Size of industry. The whole surgical instrument field covers 10,000 items, of which probably no more than 20 per cent are manufactured in the United States. Imports are absolutely essential to the efficient operation of American surgery, because even with excessive duties some would still be imported and prices would be so high that Ameri- can surgery would suffer. Rates suggested. The rates of duty should be decreased to the American valuation equivalent of 20 per cent of the foreign valua- tion. The following table shows that the proposed rate would amount DIGEST OF TAEIFF HEARINGS, H. R. 7456. 209 to 70 to 123 per cent on foreign valuation, and that the selling prices of domestic manufacturers are to-day less than the prices charged for the foreign product : ^_ Figures applying to surgical instruments, paragraph 359 of H. R. lJf56. Present cost. Present selling pnce of imported and domestic makes. Under proposed Ameri- can valuation. Based Title. Ger- many. New York. Knv- Scbeer- er Cor- Has- lam. Sklar. Pilling. Cost will be in New Equal to duty of (per on average Ameri- can selling pora tion. York. cent) price per do/.en. Hemostatic forceps, 20 per cent $4.20 $5.28 $10.20 $10.20 $10.20 $12.00 $9.33 123 $11.00 Minor operating knives, 20 per cent 4.20 5.28 7.80 6.60 7.80 7 53 70? 7 00 Bandage shears, 30 per cent. . Thumb forceps, 20 per cent . . Sponge forceps, 20 per cent. . . Dressing forceps, 20 per cent . Uterine dilator, 30 per cent . . 6.00 2.40 6.60 6.60 33.00 8.16 3.00 8.28 8.28 41.28 16.20 5.40 16.20 15.60 72.00 12.48 4.00 12.00 13.20 48.00 12.00 4.20 12.00 13.20 13.20 15.00 4.50 12.00 15.00 66.00 12.00 5.79 12. .54 13.20 57.21 94 98 80* 99 80* 12.00 5.00 12.00 M.OO 60.00 NOTE. If the American-valuation plan is adopted, we respectfully suggest that the proposed specific duty be eliminated and the ad valorem duty he fixed at 10 per cent, or at most 15 per cent, ad valorem, because we find that the present revenue on a basis of 20 per cent duty would (if applied to "American valuation " ) be equal to 7-11 per cent. Remarks. It must be borne in mind, in dealing with surgical instruments, that importers' stock turnover amounts to less than 33^ per cent a year and for this reason a high gross profit is required to cover interest and other charges. A brief of various hospital authorities, objecting to any increase of duty above 20 per cent ad valorem, is separately summarized. Hearings: 'Pages 1952-1956. Witness: Hospital Conference of the Citv of New York, etc. (Brief.) Size of industry. In 1914 there were 25 firms manufacturing sur- gical instruments' in the United States. The wholesale trade associa- tion had a membership of 21 firms, five of which manufactured only furniture and sterilizers, and three thermometers and syringes, leav- ing only 13 firms manufacturing surgical instruments. Two of these employed normally possibly 100 persons, five employed 50 persons, and six employed from 15 to 25 persons, each. The capital invested in hospitals in the United States amounts to over $3,000,000.000, and at the present date their valuation would be in excess of $5,000,000,000. Comparability. The best surgical instruments are hand forged and nearly all of the operatives in this country who are capable of making fine instruments are of foreign birth. Many left the country during the war and have not returned. It is an absolute fact that it is impossible to-day to buy from domestic manufacturers more than a small percentage of the instruments used. Hospitals are com- pelled to use inferior instruments because foreign manufacturers have not as yet reentered the market. Manufacturers of soft-metal 210 DIGEST OF TARIFF HEARINGS, H. B. 1456. instruments in the United States produce a good quality of product and have run their plants at a profit under the 20 per cent duty in the Underwood bill. Rates suggested. The fact is cited that many countries, notably Canada, admit surgical instruments free of duty, and that Congress, before the passage of the Underwood Act, made a careful investiga- tion of the surgical instrument industry and decided that it did not need a greater protection than 20 per cent. For this reason the brief requests that the duty on surgical instruments be retained at 20 per cent ad valorem. Other objections to an increase in duty note the fact that a large number of surgical instruments used by specialist surgeons are not made in this country, because the number required does not justify quantity production, and that any increase in duty would result in unwarranted hardship to American hospitals already operating under great financial difficulty. Remarks. Letters of the same purport are presented from many individual hospitals, etc. Witness: The A. S. Aloe Instrument Co., St. Louis, Mo., retail distributors of surgical instruments. (Brief; no appearance at hearings.) Costs and selling prices. The prices of all American makers are practically identical, and were higher in the fall of 1920 and in 1921 than ever before in the history of the industry. Size of industry. There are 15 to 25 domestic manufacturers, most of them very small. Only 5 produce a reasonable volume of business, and only 3 make a general line of steel instruments. No firm has gone out of the business during the past five years, except those regularly manufacturing other lines who took up surgical in- struments as a war emergency. Comparability. Japanese instruments are bo}' cotted ; no dealer or surgeon will consider them. Rates suggested. Thirty-three and one-third per cent ad valorem. Remarks. The brief is largely a critical commentary upon the testimony of Mr. E. J. Sovatkin. (See above.) PARAGRAPH 360. SCIENTIFIC INSTRUMENTS. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Harvey N. Ott, representing the Central Scientific Co., Buffalo, N. Y. The C. F. Pease Co., Chicago, 111. (Brief.) Keuffel & Esser Co., Hoboken, N. J. Dr. A. C. Abbott, director of School of Public Hygiene, University of Pennsylvania. (Brief.) FAVORING LOWER DUTIES : Mr. James G. Biddle, Philadelphia, Pa., representing himself. The American Council on Education and the special committee of the Asso- ciation of College Presidents of Pennsylvania. (Brief.) Hearings : Pages 1976-1977. Witness : Mr. H. N. Ott, representing the Central Scientific Co. Costs and selling prices. The witness did not mention costs or selling prices in this testimony, but when testifying on optical glass (page 1529) he stated that German scientific instrument manufac- turers were charging excessive prices for instruments exported to- DIGEST OF TARIFF HEARINGS, H. R. 7456. 211 the United States. For this reason present costs to the importer could not be taken as indicative of the foreigner's competitive posi- tion, since if the duty were raised foreign manufacturers could readily decrease their selling price to an extent neutralizing the effect of the higher duty. Size of industry. The witness disputed Mr. Biddle's assertion (pages 1968-1976) that the scientific-instrument industry in tha United States is large enough to take care of itself. He went on to quote from the Ways and Means Committee report of last year, on bill No. 7785, to the effect that the scientific-instrument industry is a new industry brought into existence by the needs of America during the war. Prior to 1904 the manufacture in the United States was negligible, because import duty rates were low and the duty-free pro- vision permitted scientific and educational institutions to buy from foreign manufacturers on a free-trade basis. Comparability. The witness referred to the report of the United States Tariff Commission to the effect that, generally speaking, do- roestic scientific instruments are equal to the imported. Rates suggested. Retention of the proposed rate of 40 per cent on American valuation and the exclusion of the duty-free privilege formerly accorded to educational and scientific institutions. The witness quoted further from the report of the Ways and Means Committee, cited above, that the scientific-instrument industry is a key industry, absolutely necessary for the proper instruction of scien- tific subjects in American schools and colleges. Scientific instru- ments are indispensable in laboratories controlling the manufacture of metals, chemicals, and other industrial products, especially muni- tions and explosives. In a military emergency, therefore, it is abso- lutely necessary to have a well- developed scientific instrument manu- facturing industry. Regarding the duty-free provision, witness quoted from; a report of the United States Tariff Commission to the effect that in response to a number of letters addressed to professors and teachers in American universities, they received about 20 replies. Of these, 17 were in favor of doing away with the duty-free privi- lege, one was against it, one was noncommittal, and one made sug- gestions for alterations. Remarks. Mr. Ott's testimony forms the subject of comment by Mr. Burton E. Livingstone, permanent secretary of the American Association for the Advancement of Science, in a letter of October 1, 1921, to the chairman of the Senate Committee on Finance, sum- marized below : Mr. Ott had referred in his testimony to a booklet published by the American Association for the Advancement of Science, containing a resolution against the omission of a duty-free privilege applying to scientific materials and apparatus used by educational and research institutions of the United States. According to Mr. Ott, this resolu- tion-was passed only by the executive committee, consisting of 11 members out of a total of 12,000 in the association as a whole, and was consequently not the expression of the entire association. In response to this statement Mr. Livingstone affirms that the resolution does represent the views of the association. As in all other large organizations, all the business of the American associa- tion is transacted by the council, and the executive committee of the council is empowered to act for the council in caring for all urgent '212 DIGEST OF TARIFF HEARINGS, H. R. 7456. business arising between annual meetings. The resolution in ques- tion was not passed until after the last council session at the Chi- cago meeting, and was therefore referred to the executive committee and adopted by that body, acting for the council. The resolution was published in the official organ of the associa- tion, " Science," and a copy of the booklet containing the resolu- tion was sent to each of the members early in July. The booklet bore a special request that those disapproving of any resolution contained therein should inform the permanent secretary. Only 27 letters in that sense were received up to October 1, 1921, and all but 2 were from manufacturers, who apparently hoped to gain by the removal of the duty-free privilege hitherto given educational institutions. Only 10 of the letters were from members of the as- sociation. " Since only 10 out of about 12,000 members have written to disapprove the resolution on duty-free importation, it is un- equivocally clear that this resolution is not disapproved of by any considerable number of members." Witness: The C. F. Pease Co., Chicago, 111. (Brief; no appear- ance at hearings.) Costs and selling prices. A set of instruments such as are used by professional draftsmen costs $10 to produce in the United States. Of this amount, 85 per cent, or $8.50, is labor, and $1.50 raw ma- terial. The cost in Germany would be the same for material, and for labor one- third of the American cost, or $2.80, making a total of $4.30 as compared with the American cost of $10. Size of industry. Before the war practically all the drawing in- struments used in the country were imported from Germany, but as a result of war conditions several American manufacturers took up their production. Made from nickel silver and high-grade tool steel, they are instruments of precision, requiring expensive machinery and highly skilled labor for their successful production. Several years were required to develop the domestic industry to produce the necessary dies, tools, and patterns, and bring the business to a pro- ductive stage. At present, large quantities of German instruments, estimated at from $3,000,000 to $5,000,000 annually, are flooding the market, and unless adequate protection is furnished American manufacture will be impossible. Practically no drawing instruments were made in America under the Payne- Aldrich tariff, as the duty of 40 per cent was not sufficient. Rates suggested. A duty of 60 per cent ad valorem to equalize conditions. Remarks. Attention is drawn to the prevalence of child labor in Germany. Witness: Keuffel & Esser Co., Hoboken, N. J. (Brief; no appear- ance at hearings.) Rates suggested. All instruments and appliances containing parts of optical glass, 45 per cent ad valorem. Philosophical, scientific, and laboratory instruments, apparatus, utensils, and appliances; sur- veying instruments, 45 per cent ad valorem. Surgical, dental, mathe- matical, and drawing instruments, 60 per cent ad valorem. The brief points out that mathematical and drawing instruments belong by nature and process of manufacture to the same class with surgical and dental instruments. Both lines were developed as a war DIGEST OF TARIFF HEARINGS, H. R. 7456. 213 necessity, require the same type of highly trained labor, and from the highest grade of materials. This type of instrui are made instruments re- quires greater protection than general manufactures of metal, as the labor cost is much higher and the industry is not supported by an established reputation in this country, as is the case with machinery and tools. Slide rules are made of wood and are not covered by paragraph 360, but they are mathematical instruments and should be so classed. Domestic prices on them are only 45 to 50 per cent above prewar, but dangerous competition is appearing from Germany and Japan. The duty-free provision for educational purposes should not be retained, as it sets a premium on imported goods against those of American manufacture. Remarks. At the date of writing (April 27, 1921), drawing in- struments were being sold in Germany for home consumption at prices equivalent, at the rate of exchange then current, to 6 per cent above prewar prices, and for export at prices equal to 140 per cent of prewar prices. Domestic prices of drawing instruments are only 25 per cent higher than those prevailing in 1914. German wages (taken at 1 cents per mark), with duty and transportation added, do not exceed 15 per cent of to-day's American wages in this line. Witness : Dr. A. C. Abbott, director of School of Public Hygiene, University of Pennsylvania. (Brief; no appearance at hearings.) Comparability. For a number of years before the war American educational institutions imagined that suitable instruments and ap- paratus could be had only by importation. Several years before the war the writer found that, with few exceptions, chemicals, dyestuffs, glassware, and apparatus of American make could be obtained which meet, in general, all the needs of such institutions, and at prices which were not prohibitive. There are a few unusual types of appa- ratus which are made only by foreign makers, but there is no reason why, with proper encouragement, these could not be made in this country. Dr. Abbott sees no reason why, with such encouragement to American producers, this country should not be independent of foreign sources for these supplies. Hearings : Pages 1968-1976. Witness : Mr. J. G. Biddle, representing himself. Costs and setting prices. The General Electric Co. is manufactur- ing X-ray tubes to sell for $125, on merit, whereas tubes from Europe, which can be sold here for $25, have no sale. Selling prices play very little part in the ability of any particular instrument to withstand competition. Scientific instruments are selected almost entirely on the basis of quality and fitness for a given purpose and not on price. Size of industry. The witness has been unable to see any variation in the value of scientific instruments imported under tariffs varying from 20 to 45 per cent. Comparability. Statements made before in reference to X-ray apparatus may be applied to the whole scientific instrument line. In- struments will be imported so long, and only so long, as the domestic article is inferior to the foreign, regardless of price charged or any other-factor. Rates suggested. A 40 per cent ad valorem rate on American valuation is far in excess of the duties levied in previous tariff bills. 7713422 15 214 DIGEST OF TARIFF HEARINGS, H. R. 7456. Taking an instrument purchased abroad for $36, and assuming that the necessary gross profit to the importer must be 20 per cent of the selling price, then to cover selling expenses and his net profit on the transaction this instrument, brought in under H. R. 7456, must be sold in the United States markets for $100. Forty dollars of this would be duty, $20 gross profit to the importer, and* $4 transportation and other expenses incurred prior to delivery at the United States port of entry. The remaining $36 covers the initial cost. In other words, 40 per cent on American valuation corresponds to 110 per cent on foreign valuation. Former tariff acts carried duties bearing from 20 to 45 per cent on the foreign valuation; the rate proposed in the Fordney bill amounts, therefore, to an increase of from 100 to 150 and in some cases to 600 per cent. Witness figures that 15 per cent on American valuation would be very nearly equivalent to 45 per cent on foreign valuation. He submits that representatives of the Ameri- can Association for the Advancement of Science ask that the privi- lege now granted educational and scientific institutions of free im- portation of scientific instruments be continued, on the ground that foreign instruments will be imported and used, regardless of duty, if superior to the domestic article. The increased duty will, there- fore, amount to an additional handicap to American scientific institu- tions without benefiting American manufacturers. Witness : The American Council on Education and the special com- mittee of the Association of College Presidents of Pennsylvania. (Brief; no appearance at hearings.) /Size of industry. The brief is a protest against the proposed re- peal of the exemption from duty applying to instruments intended for educational and kindred purposes. It is pointed out that im- ports under this head have not exceeded $600,000 in any one year, and the revenue under the bill would not be more than $250,000 per annum. Of these importations, more than one-half are for State universities, supported by public taxation. Imports under the ex- isting duty-free clause are, for the most part, specialized apparatus, not admitting of quantity production, and which American manu- facturers regard as a nuisance rather than as an asset. A consider- able portion of it is glassware, the domestic cost of which is at least 10 times that of foreign. Trade-union restrictions are such that a skilled workman can complete the amount of production permitted for the day in two and one-half hours. Under these conditions the cost of American-made ware is so high that even American manu- facturers purchase foreign glass for their own laboratories. The removal of the exemption is not supported by the great ma- jority of American manufacturers who are themselves interested in the promotion of scientific research. The small amount of the im- portation under the duty-free clause is proof that the privilege has not been abused. PARAGRAPH 362. FILES. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Wallace L. Pond, representing the Nicholson File Co., Providence, R. I. Hearings : Pages 1977-1984. Costs and selling prices. In the manufacture of files the percentage of labor cost is very high, in many cases reaching 80 or 90 per cent DIGEST OF TARIFF HEARINGS, H. R. 7456. 215 of the total. In producing 2-inch round files, 1 pound of steel, costing 38 cents, will make 83 dozen files, having a net value of $144.89. The labor expended on this pound of steel enhances its value 381 times. Wages paid in England are to-day very much lower than the average wages paid for the same class of operatives in this country. The operatives here in the same general classes receive a remuneration ranging from 66f to 130 per cent more than the same employment receives in Sweden. During this year (1921) Xew York distributors have quoted files made in Austria, laid down in New York duty paid, at fully 20 per cent lower than the lowest prices now being quoted by American makers to the largest distributing trade. Size of industry. There are in the United States some 25 to 30 makers of machine-cut files, employing, when in full operation, ap- proximately 9,000 men. Rates suggested. The folloAving rates of duty per dozen should be assessed on files : Group No. 1, files 2$ inches in length and under $0.40 Group No. 2, files over 2} inches and under 4i inches in length . 75 Group No. 3, files over 4^ inches and under 7 inches in length 1. 00 Group No. 4, files 7 inches in length and over 1.20 In the 10 years prior to 1914 files were imported on a basis of approximately 70,000 dozen per annum. In the first year under the Underwood tariff files were imported to the amount of 121,786 dozen. Japan has two file factories in active operation and, considering the wages paid, which are only a small fraction of those paid in this country, some very serious competition in years to come must be expected. The specific duty is preferable because the actual duty is then a fixed and certain amount based upon the quantity of goods actually imported, not subject to the vagaries and fluctuations of foreign mar- ket or exchange values. It offers no incentive for foreign file makers to undervalue invoices of files. PARAGRAPHS 364, 365, 366. RIFLES. REQUESTING RECLASSIFICATION : L. H. Hartmann & Son, Philadelphia, Pa. (Brief; no appearance at hear- ings. ) Costs and selling prices. The writer directs attention to certain incongruities in the rates of duty proposed in H. R. 7456. Thus a reliable Belgian rifle can be laid down here at $3 under the present duty of 35 per cent ad valorem, and can be sold at a reasonable profit for $6 retail. The nearest American-made rifle is sold to jobbers at $5.11, which makes the retail price almost prohibitive for the young man who wants to practice rifle shooting. The same rifle was sold wholesale for $3.25 before the war. There is no well-defined duty on gunstocks, which are not grown in this country. 216 DIGEST OF TARIFF HEARINGS, H. R. 74-56. PARAGRAPHS 365 AND 366. SHOTGUNS AND PISTOLS. WITNESS, AND INTERESTS REPRESENTED. FAVORING LOWER DUTIES : Mr. E. P. Gebhard, representing the Milford Co., importers, Milford, Del. Hearings : Pages 1984-1989. Costs and selling prices. A foreign-made gun (not further de- scribed) is invoiced at $50. To this are added duty, $17.50, package, freight, etc. $2.50, importer's profit $7, and war tax $7.70- making a total cost to the wholesaler of $84.70. To this he adds his own profit of 25 per cent, making the selling price to the retailer $105.77. To this the retailer adds a profit of 25 per cent, making the selling price of the imported article to the consumer $132.2}.. Under the Fordney bill this gun would probably be compared with the Parker Bros? gun, wholesaling at $112.38. The duty of 35 per cent plus $10, with the same additions as before, would make the importer's selling price $123.21. The wholesaler's selling price to the retailer would be $154.01, and the retailer's price to the consumer $192.51, instead of $132.21, above.' For a .32 caliber automatic pistol the foreign manufacturer charges the importer $9. To this must be added duty, $3.15, 5 per cent for freight, package, etc., the importer's profit of 10 per cent, and the war tax, making a total of $15.19 to the wholesaler. The whole- saler's profit of 25 per cent brings the wholesale selling price to $18.98. Adding the retailer's profit, the price to the consumer will be $23.72. Compared with this is the Colt .32 caliber pistol, the wholesale price of which is $19.60. The importer would add the duty under the Fordney bill of 35 per cent plus $3.50, with the same additions for profit, etc., making the price to the wholesaler $21.54, and the wholesaler's selling price to the retailer $26.92. The price to the consumer would be $33.65 for a pistol that can not possibly cost the American manufacturer more than $6. Prices to the im- porter have increased commensurately with the decrease in the rates of exchange. A sample of a German gun cost the importer before the war 100 marks, equal to $23.80. To-day the German manufac- turer charges 1,750 marks, equivalent, at the current rate of exchange, to $26.25. In the United States the cheaper grades of guns have advanced in price from $20.50 in 1914 to about $60 to-day. A gun formerly bought for $2.75 is now priced by the wholesaler at $9.67. The type of gun formerly bought by the farmer's son for $3.50 now sells for around $12. Size of industry. There are a very few hundreds of laborers em- ployed by the domestic industry. Rates suggested. A duty of 20 per cent ad valorem. The great majority of the guns sold in this country are bought by farmers, their sons,* and colored people. This class of gun came mostly from England and Belgium, and is entirely off the market to-day, as these people can not afford to pay the prices asked. There are to-day no foreign guns in this country, or on the other side, while domestic makers are far behind their orders. The 35 per cent duty must be reduced to permit any competition at all. DIGEST OF TARIFF HEARINGS, H. R. 7456. 217 PARAGRAPH 367. WATCHES. WITNESSES, AND 1NTEKESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. R. C. McCulloch, representing the Hampden Watch Co. and other American watch manufacturers; address, Canton, Ohio. The South Bend Watch Co., South Bend, Ind. (Brief.) The Hampden Watch Co., Canton, Ohio. (Brief.) The Hamilton Watch Co., Lancaster, Pa. (Brief.) (The three briefs are identical.) FAVORING LOWER DUTIES : Mr. Emil N. Zolla, general manager of the Helbein Stone Co., representing the watch importers of the United States. The American-Swiss Watch Co. (Inc.), Peekskill, N. Y. (Brief.) OBJECTING TO MARKING PROVISIONS : Mr. Frank D. Pavey, attorney, representing clients. Hearings : Pages 2004-2023. Witness : Mr. R. C. McCulloch, representing the Hampden Watch Co. and others. Costs and selling prices. From 80 to 90 per cent of the cost of pro- ducing watch movements in America is labor. Rates suggested. American manufacturers are satisfied with the Fordney bill as it passed the House, and feel that no change should be made in the watch paragraph without serious and careful consid- eration. All that they ask is to have the difference in the cost of pro- duction at home and abroad equalized on the basis of prewar condi- tions. The rates in the Fordney bill are not materially higher than those in the act of 1909, and the marking provisions are practically the same. The gist of the Fordney bill changes is as follows : 1. Provision is made lor movements knocked down for assembling. Testimony submitted before the Ways and Means Committee showed that quite a business has been built up in this country through a sys- tem by which foreign-made movements, which have' been completed and timed, are taken apart before being shipped to the United States and for purposes of evading the duty are brought into this country as material, afterwards being assembled and sold in competition with American watches. The provisions in the Fordney bill relative to movements assembled anoT knocked down will, it is believed, to some degree make impossible a continuation of this fraud upon the Gov- ernment. 2. Clock watches are separately classified. A clock watch is simply a combination of wheels without jewels or adjustments. It probably has been timed in a general way, but it is not comparable as an effective time-keeping machine with a jeweled watch. 3. Seventeen- jewel movements are classified according to adjust- ments. Seventeen-jewel movements are manufactured adjusted and unadjusted. The 7-jewel, 11-jewel, and 15-jewel movements are al- most universally unadjusted, and are so regarded by the trade. All movements having over 17 jewels are universally adjusted. A 17- jewel adjusted movement will cost, to produce and will sell for just about three times what a 17-jewel unadjusted movement will cost and sell for. From a revenue-producing standpoint of protection the classification of 17-jewel movements as written in the Fordney bill should be retained. 218 DIGEST OF TARIFF HEARINGS, H. R. 7456. 4. The specific duties provided on all grades are no higher, on an average, than the duties provided in the act of 1909. 5. The duties are based on prewar conditions. 6. The marking provisions are practically the same as in the act of 1909. This requirement is made for the purpose of stopping the fraud resulting from bringing in a 17-jewel movement marked " 7 " jewels and then engraving the numeral " 1 " in front of the numeral " 7 " after the movement has been cleared, thus defrauding the Gov- ernment. Witnesses: The South Bend Watch Co., South Bend, Ind.; the Hampden Watch Co., Canton, Ohio; and the Hamilton Watch Co., Lancaster, Pa. (Briefs; no joint appearance at hearings.) NOTE. The three briefs, being identical, are treated together. Size of industry, In 1914 there were 15 establishments engaged in the manufacture of watches, with an output for the year valued at $14,275,000. There have been no new watch movement factories started in this country for perhaps 15 or 20 years, but the value of the output, as stated in a letter from Mr. W. M. Steuart, director of the United States Census, had increased in 1919 to about $32,044.000. Rates suggested Paragraph 367 of H. R. 7456 to be adopted with- out change. American manufacturers of watch movements ask for rates of duty equalizing the differences in American and foreign costs. In view of the fact that from 80 to 90 per cent of the cost of producing watch movements in this country is labor, such rates will be of advantage to American workmen to perhaps a far greater extent than to the manufacturers. The rates in H. R. 7456 are ex- ceedingly fair, the paragraph is well written and well balanced, and no changes should be made in the paragraph. Remarks. The rates in the proposed bill (H. R. 7456) are as near the rates provided in the act of 1909 as they could be fairly figured out upon a specific rate basis. The marking provisions of H. R. 7456 are identical with the marking provisions of the act of 1909 so far as the number of marks and figures required to be stamped upon the plate is concerned. The bill, also, contains the exact language of the act of 1913 as to marking provisions, except that it adopts the provision of the act of ^K)9 requiring the number of jewels and adjustments to be stamped both in words and in Arabic numerals. There are, therefore, no new marking provisions in the proposed law. The fact that imports have increased from $1,951,579 in 1913 to $12.608.624 in 1920 (that is to say, by $10.657,045) is evidence as to whether or not the provisions of the various tariff acts have been unfair to importers. On the other hand, exports of American-made watches increased bv only $372,720. Data submitted show that importations of foreign-made watches into the United States are about equal to the domestic production. Importers recommend a rate of $150 each on the classification riaving more than 11 and not more than 15 jewels. This would amount to a reduction over the act of 1909 of 35 cents each, and would reduce the per cent rate to at least as low as the ad valorem rate in the act of 1913. Unadjusted movements cost to produce, and will sell for, about one-third what the adjusted movement will cost and sell for. There- DIGEST OF TARIFF HEARINGS, H. R. 7456. 219 fore, 17-jeweled movements should be classified as set out in H. R. 7456. There are two reasons why the word "unadjusted" should be marked upon the movement: (1) To protect the Government in the collection of duties, and (2) to protect the consumer against fraud. If the movement is cleared without such marking the importer can defraud the public, afterwards, by marking upon the plate words and figures indicating adjustments; the profit from such misrepre- sentations would be very large. The present law requires that " un- adjusted " movements be so marked. A comparison between H. R. 7456 and the act of 1909 shows that the rate provided in H. R. 7456 of $2.75 each on unadjusted 17-jewel movements is a decrease by percentage over the act of 1909 for every year except one. On adjusted movements, the rates provided in H. R. 7456 show on each classification a percentage of increase, and on the last classification of 17-jewel movements the percentage of increase is quite material. The increases in the adjusted movements are explained upon the ground that the importations were cleared as "unadjusted" movements. If they had been cleared upon the basis of the classification in H. R. 7456, or upon their true value, the increases would not be material. A specific duty of $5 on all movements having more than 17 jewels, as recommended by the importers, would be a reduction of about 100 per cent from the duties provided in the act of 1909, and a very material reduction in the rates of the act of 1913. Evidence shows that about one-half of the foreign material im- ported is imitation American watch material, imported to be used for repairing American watches. The use of this material for repair- ing high-grade American watches results in unsatisfactory work and in injury to the reputation of both the jeweler who did the work and the manufacturer of the repaired watches. It is not believed that the duty on material should be reduced, because imported material comes into competition with American material, and such reduction would increase the amount of imitation material imported, to the detriment of consumers, jewelers, and American manufacturers. The manufacture of jewels in the United States has never been successfully conducted, although a great deal of money has been ex- pended in the endeavor. Jewels, therefore, are to the American manufacturer of watch movements the same as raw material, and in practically every instance about 50 per cent of the value of the ma- terial in the movements is in the jewels. The duty of 10 per cent provided in H. R. 7456 is a fair revenue duty and should not be increased. With regard to timers, attention is called to the fact that there is little difference between a timer and a watch movement. Some American manufacturers have, during the past few years, made quan- tities of timers by using their regular movements with certain me- chanical changes, and it would be an easy matter for the foreign manufacturer to make practically all his high-grade watches with a timing-device feature. To adopt the importers' recommendation with regard to timers would leave a loophole for bringing in high- grade movements at $1 each. The value of watch movements in this country is determined by the number of jewels and adjustments, which also fix the standard. For- 220 DIGEST OF TARIFF HEARINGS, H. R. 7456. eign manufacturers,nby false marking, either before or after the movement has been cleared, use the number of jewels and adjust- ments as a blind for extorting exorbitant profits, and thousands of people are cheated yearly through this fraud. The features that make the watch a good timepiece can not be dis- covered by an external examination, however critical. Comprehen- sive marking provisions and specific duties, such as are provided in H. R. 7456, are the only safeguard. The American w 7 atch industry has had a struggle in this country from the beginning. Competition from abroad has been severe. Skilled labor has been hard to secure, difficult to train, expensive and hard to hold. Imports increased by millions because the foreign manufacturer was able to secure labor, highly skilled, at a low rate, while the American manufacturer was compelled to pay high wages and train his own workmen. Hearings: Pages 1989-2004. Witness: Mr. Emil N. Zolla, representing the watch importers of the United States. Costs and selling prices. Since 1919 watchmakers in Switzerland are working only 48 hours a week instead of 56, which means that the cost of labor, due to this alone, has increased 20 per cent. The average cost of labor to-day in Switzerland, figured in gold, is be- tween $25 and $35 per week, and adjusters are paid as high as $50 a week. The duty rates, as recommended in the accompanying brief, are equivalent to an ad valorem rate of at least 40 per cent, and in a few instances more than that. Adding 40 per cent to the wages of the lowest-paid watchmaker to-day in Switzerland which is $25 would make the total $35 for the lowest-priced man. To this $35 per week must be added at least another 30 per cent, being the minimum of the importer's gross profit, making a total of at least $45 per week. The average wage earned by the American watchmaker is to-day between $35 and $40 per week, with such factories as the Waltham and others very recently announcing a reduction of from 10 to 15 per cent in the wages of their men. Siz& of industry. In 1914 there were 15 establishments engaged in the manufacture of watches, with an annual output valued at $14,- 275,000. In 1919 there were 36 establishments, with an output valued at $32,100,000. Watch-case factories in the United States turn out approximately 19,000 cases a day. In 1914 the total value of the output of case fac- tories was $7,831,000, and in 1919 it was $19,619,000. Rates suggested. Watch movements, whether imported in cases or otherwise, assembled or knocked down for reassembling, if having less than 7 jewels, 70 cents each; having 7 jewels and not more than 11 jewels, $1.25 each; having more than 11 and not more than 16 jewels, $1.50 each; having 17 jewels, $2.50 each; having more than 17 jewels, $5 each; watch cases, 25 per cent ad valorem; parts of watches, in- cluding jewels and dials for use in the manufacture of watches, 15 per cent ad valorem ; chronometers, box or ship, $5 each ; parts there- of, 15 per cent ad valorem ; timers designed and constructed to time comparative rates of speed, $1 each : Provided, That all watch dials, whether attached to movements or not, when imported shall have indelibly painted or printed thereon the name of the country of origin, and that all watch movements and plates assembled or knocked DIGEST OF TARIFF HEARINGS, H. R. 7456. 221 down for reassembling, and cases, shall have the name of the manu- facturer and the country of manufacture cut. engraved or die-sunk conspicuously and indelibly on the plate of the movement and the insicle of the case, respectively, and the movement and the plates shall also have marked thereon, by one of the methods indicated, the num- ber of jewels, said numbers to be expressed either in words or in Arabic numerals, and none of the aforesaid articles shall be deliv- ered to the importer unless marked in exact conformity to this direc- tion: Provided further^ That only the number of the jewels which serve a mechanical service as fricitional bearings shall be marked as herein provided. The reasons for substituting the above-mentioned recommendations in place of the duties recommended in paragraph 367 of the Fordney bill are as follows : Watchcases are separated from watch parts, etc., because a watch- case is a finished article, consisting frequently of gold or silver on which the cost of labor has already entered, while watch parts, for all practical purposes, are similar to raw material. The reason a rate lower by 15 per cent is recommended is that, with possibly one or two exceptions, not a single watchcase company would ask for a higher rate than 20 per cent. Not only are foreign case manufac- turers unable to compete successfully with American case manufac- turers, but the latter are to-day successfully competing in Europe with the former. Chronometers are omitted from the classification of " watch parts " as this is a completed article and does not belong among " parts." Jewels and dials are included in the classification for parti? because they are undoubtedly " parts of watches," and no differentiation in the rates of duty should be made. The ad valorem duty on " watch parts " should be reduced to 15 per cent, which will provide a reasonable revenue. As the " watch parts " imported are used for movements imported from abroad, and are therefore in no form or manner in competition with watch parts for American movements, there can be no need for giving any pro- tection. Timers are not manufactured at all in this country, and as 90 per cent of all the timers imported are used by the United States Govern- ment it is believed that this article should have a separate classi- fication. These rates closely approximate the schedule of the act of 1909, which was admittedly a high tariff bill. Being so close to that sched- ule, they are, particularly under the present economic conditions of the world, sufficient for revenue purposes and more than sufficient for " protection " to the American watch industry. Reference to " position adjustment " classifications among 17-jewel movements has been omitted in the above-mentioned recommenda- tions. It is an arbitrary classification contained in no other tariff bill and a distinction made by no other country in the world. To retain it would be to bar absolutely the importation of this class of movements. It would mean an increase of over 100 per cent over the rates of the act of 1909. Position adjustments do not of themselves determine the value of the watch. Every watch, in order to run and keep time, must be adjusted. Three adjustments of a watch are practically the lowest 222 DIGEST OF TARIFF HEARINGS, H. R. 7456. number of adjustments possible for any timepiece with any degree of dependability. The average cost of two jewels to American watch manufac- turers bought by them in large quantities from Switzerland is less than 50 cents. The net result, therefore, of the Fordney bill as passed by the House is, that while calling for a duty of $2 on 15-jewel watches of three-position adjustments it calls for a duty of $4.75 for the same watch with two additional jewels. In other words, it adds a duty of $2.75 for two jewels. In the case of the same 17-jewel watch ad- justed to five positions which simply means that the watch is further' adjusted to two more angles there is a difference of $4.50 for the additional two jewels. The present act (1913) provides for the marking of the number of jewels and adjustments of watch movements "either in words or in Arabic numerals." The Fordney bill has changed the word " or " to " and," so that the language of the bill reads " said numbers to be expressed in words and in Arabic numerals." To retain the language in the Fordney bill as it passed the House would make it impossible to import the very small movements, some of which measure less than one-fourth of an inch across the dial. To put on so small a movement the name of the country of origin, the name of the manufacturer, and, in addition to that, the number of the jewels and adjustments in both words and Arabic numerals, would be physically impossible. In the phraseology of the stamping provisions the words "and clock," also " Lever-clock movements with jewels in the escapement," have been omitted in the above-mentioned recommendations as these provisions properly belong in the clock schedule. In the same pro- viso there has been omitted the following sentence : " and if the move- ment is not adjusted, the word ' unadjusted ' shall be marked thereon by one of the methods indicated." The reasons for omitting this last sentence is that stampings should be only affirmative representations and not negative. While the manufacturer should be held to strict accountability for all affirmative representations made he ought not to be compelled to make a negative representation. Provisions of this kind afford no protection whatsoever to American manufacturers but are extremely mischievous in their nature and are designed to cause as much inconvenience as possible to American importers. Witness: The American-Swiss Watch Co. (Inc.), Peekskill, K Y. (Brief; no appearance at hearings.) Comparability. In 1906-1908 it was found that manufacturing costs in the watch business were approximately the same, for corre- sponding grades of watch movements, in the United States and in Switzerland. The cost of living in Switzerland at the present time is as high as, if not higher than, in the United States; watchmakers' wages are higher than ever and, in addition, Swiss manufacturers have to con- tribute toward the support of their workers when factories are working half time or shut down completely. In 1908, the president of this company was told by a watch manufacturer that the factory of which he was vice president was producing a 15-jewel movement at a certain price and was also making up, at an additional cost of 25 cents, the very same movement in 17 jewels, which brought $5 additional for the two jewels. DIGEST OF TARIFF HEARINGS, H. R. 7456. 223 Rates suggested. The present (act of 1913) rates of duty on "watches more than protect the domestic industry. The wording as to markings on watch movements and cases, as provided for in the act of 1913, is ample. Remarks. If domestic watch manufacturers recognize advan- tages in the marking of the number of jewels and positions on the movement plates in both letters and numerals, it appears that they would put the idea into practice on their own movements, and thus make it impossible for some unscrupulous jewelers to change the markings on American movements, to be sold at a higher price. All additional marking provisions on watch movements, beyond those in the act of 1913. would serve no useful, decent purpose. Clean, healthy competition will benefit the American watch buy- ing public. It will likewise benefit the American watch industry as an industry, since reasonable competition will force domestic manu- facturers to produce a high-grade watch, sold on its merits, instead of relying on artificial classification. Witness : Mr. Frank D. Pavey, attorney, representing clients. (Brief; no appearance at hearings.) Remarks. The new requirements in regard to markings upon im- ported watch movements, in H. E. 7456, serve no purpose except to impose additional burdens and expense either upon the manufac- turers or the importers of Swiss watches. They are wholly unneces- sary for the purpose of determining the value of the watch a factor capable of exact determination by other and simpler means. How- ever, if the Committee on Finance decides to retain them, they ought to be made to take effect not less than four months, and preferably six months, after the date of the enactment of the bill. This would enable importers, in placing new orders, to impose the cost of these markings on the manufacturers. So far as orders already given are concerned, it is a great injustice to importers to impose a new require- ment of this character, as they will have to pay the cost of the addi- tional markings on goods ordered but not yet shipped. Goods which have already been shipped by the manufacturers will have to be re- turned to the manufacturers in order to have them marked and re- shipped to the importers. PARAGRAPH 368. CIXJCKS. WITNESSES. FAVORING PROPOSED OR HTOIIFR DUTIES : The New Haven Clock Co., New Haven, Conn. (Brief.) FAVORING LOWER DUTIES : The Kuehl Clock Co.. Chicago. 111. (Brief.) The Western Clock Co., La Salle, 111. (Brief.) Witness : The New Haven Clock Co., New Haven, Conn. (Brief; no appearance at hearings.) Costs and selling prices. Manufacturing costs in Germany are less than in the United States because of the low wages paid to workers abroad. German wages, in different lines of activity, range from $2.48 per week for female shop help to $3.64 for pattern makers and $5.37 for cabinet makers. 224 DIGEST OF TARIFF HEARINGS, H. R. 7456. Size of industry. The American clock industry employs upwards of 15,000 wage earners. Factories are located in Ohio, Illinois, New York, Massachusetts, and Connecticut. Remarks. American valuation is essential, because at present ex- change rates no American clock manufacturer can stand the competi- tion with foreign goods. It is also necessary to prevent the practice of undervaluation. The exchange situation is acting steadily to transfer the workshops of the world to Germany. In view of the fact that an income tax and an excess-profits tax are paid by American manufacturers to the Government, certain arrangements should be made about foreign competing goods being dumped on the market at their low cost just to raise money. The exemption of foreign factories from taxes on profits (because of the separation of these into small amounts) works a hardship upon the American manufacturer and should be taken into consideration. Since the great falling off in business in this country, it has been impossible to run clock factories at their full production and some are now shut down temporarily. Meanwhile, when there seems again to be a little beginning of demand, it is being supplied from foreign sources. German clock factories are rapidly reaching their prewar efficiency and quantity production. German clock-making machinery is fully equal to American machinery, much of it having been copied from American patterns. The crux of the demand for protection (after other conditions have become normal) is that of labor, which is paid here approximately three times as much, even at present, as in for- eign countries. Without tariff protection, the wages of clock work- ers must be leveled with those of Germany, which would reduce their pay below a fair living wage for an American wage earner. Persistent undervaluation in invoices is estimated by a Govern- ment representative to cost the United States, in lo^s of duties, from $10.000,000 to $40,000,000 a year. The infamous system of "Car- tels" has been revived by Germany since the war and is now flour- ishing with renewed vigor. Trade combinations there are encour- aged, and trade organizations urge their members to conceal the true foreign values from United States consuls and Treasury agents. The brief refers to the tariff increases now being made by leading European countries. Witness: The Kuehl Clock Co., Chicago. 111. (Brief; no appear- ance at hearings.) Costs and selling prices. Before the war, alarm clocks were sold by American producers at prices ranging from 40 to 45 cents each. At the present time these clocks are offered by American manufac- turers at 85 cents to $1 each. The present price of an imported alarm clock, comparable with these, is 65 cents without duty and other charges. Assuming that this alarm clock can be purchased abroad for 50 cents, the duty of 35 cents specific and 35 per cent ad valorem, based on the American valuation of 85 cents to $1. would amount to 65 cents, making a total landing cost of $1.15. without taking into con- sideration freight, insurance, and incidental charges. This would be the bare expense without including selling and general expense and profit. It is impossible to figure out what this clock could be sold DIGEST OF TARIFF HEARINGS, H. R. 7456. 225 for in the American market, but it is apparent that it could not be imported at all. Kates suggested. It is suggested that cuckoo clocks be separately classified and a rate of duty lower than for other clocks provided, because they form a distinct and separate article of trade, not com- peting with or replacing any other kind of clock. They are not now, and never have been to any extent, produced in the tlnited States, and it is extremely doubtful whether the particular things which go to make up the attractiveness and desirability thereof ever could be produced here. The American producer of clocks is at no disadvantage with the imported clock, with the present rate of duty at 30 per cent. If he could compete with imported clocks before the war, it is evident that he is fully able to compete now with the foreign article in this market. It is suggested that the specific rates provided in H. R. 7456, for clocks having no jewels in the escapement, be eliminated, leaving the ad valorem rate of 35 per cent to stand. Remarks. Alarm clocks are purchased in this country largely by people of moderate means, whose every-day requirements make the alarm clock an essential feature. An increase, therefore, in the price to the consumer results only in the enhancement of the profit made by the manufacturer. Exports of clocks (of all kinds) from the United States before and after the war were largely in excess of imports. Thus, in 1913 exports were approximately 25 per cent greater than imports, and in 1920 exports were eight times in value that of imports. It is manifest that an industry exporting eight times in value the imports needs no additional protection to enable it to compete with foreign- made goods. There is no objection to stamping on the dials the name of the country of origin, but there is nothing to be gained from the addition of the "manufacturer's name. Indeed, to do so would be practically impossible on many sizes and varieties of clocks. Several foreign factories have names so long that even the ordinary size dial would not be large enough to contain all the information required by this paragraph, without mentioning the numbers essential to the telling of the time. The name of the foreign maker neither adds anything to the selling value of the clock nor takes anything theref rom^in the presence of the name of the country of origin on the dial. It is asked, therefore, that the requirement of marking on the dials of clocks, having no jewels in the escapement, be confined to the name of the country of origin. No objection is made to the marking or stamping on the front or back plates, as provided for in the bill. Witness: The Western Clock Co., La Salle, 111. (Brief; no ap- pearance at hearings.) Remarks. The rates of duty on clocks, in H. R. 7456, do not seem to be equitable. For example, clocks costing $1.05 would be assessed at 35 per cent, or 36J cents duty. Clocks costing $1.15 would be assessed at 35 per cent, or 40J cents, and in addition 70 cents, or a total duty of $1.10|. This would mean that a difference in value of 10 cents per clock would make a difference in duty of 73 cents per clock. 226 DIGEST OF TARIFF HEARINGS, H. R. 7456. It is desirable to know on what basis the valuation for additional duty of $1.10 was arrived at. In the manufacture of the product of the Western Clock Co., which is substantially the same line, clocks are made costing just below and above $1.10 and the reason is not apparent why the division should be taken arbitrarily at that figure. PARAGRAPH 371. BICYCLES AND MOTOR-CYCLE SADDLES. WITNESS, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES Mr. L. V. Fauver, representing between 75 and 80 per cent of the bicycle and motor-cycle saddle manufacturers of America ; address, Elyria, Ohio. Hearings : Pages 2030-2031. Size of industry, The industry is very narrow and rather small, the value of the output not normally exceeding $1,500,000 per year. For the past year it has been substantially closed down. Rates suggested. Not less than 30 per cent on American valuation. The witness is fully in sympathy with the request of the motor-cycle industry that parts of motor cycles be classified separately from com- plete motor cj^cles. There is no reason for manufacturers of leather being classified with the motor-cycle industry. Saddle manufacturers do not wish to be included in the reduction requested by the motor-cycle industry. PARAGRAPH 371. MOTOR CYCLES. WITNESSES, AND INTERESTS REPRESENTED. FAVORING LOWER DUTIES : Mr. Walter Davidson, president of the Harley-Davidson Motor Co., repre- senting motor cycle manufacturers of the country; address, Milwaukee, Wis. Mr. William G. McCann. representing the Hendee Manufacturing Co.; address, Springfield, Mass. Hearings: Pages 2023-2026. Witness: Mr. W. Davidson, representing motor cycle manufac- turers of the country. Size of industry. There are seven active firms in the United States, with an invested capital of $18,000,000 and a pay roll of $9,000,000 for 6,000 employees. During the year 1920 they produced about 68,000 complete motor cycles. Rates suggested. Fifteen per cent ad valorem, with the following clause added : When imported from a country which imposes a duty greater than 15 per cent the duty would be equal to the duty of the foreign country, but not to exceed 50 per cent. It was requested that complete motor cycles should be considered separately from bicycles and parts of motor cycles and bicycles. There is no connection in the United States between the motor cycle and bicycle industries, and parts of both machines are subject to much more severe foreign competition than are complete motor cycles. The industry meets practically no competition outside of the United States;' only 41 motor cycles were imported in 1920, but over 50 per cent of the domestic production in 1920 was exported. Tha DIGEST OF TARIFF HEARINGS, H. R. 7456. 227 industry depends largely on the export business, and it is hoped that a lowering of American duties may aid the efforts which the industry is making to obtain reductions in the tariffs of foreign countries to which a large portion of its output is sold. Any duty higher than is necessary to give the American industry reasonable protection will tend to retard the development of American motor cycle business in foreign markets. Hearings : Pages 2026-2030. Witness : Mr. W. G. McCann, representing the Hendee Manufac- turing Co. Size of industry. Since 1913 the production and domestic con- sumption have decreased, while the export business has increased. The Hendee Co. should employ 2,000 men, but during the last few months it has operated with only about 300 or 400 on a half-time basis. Comparability. England and the United States are the two motor cycle producers of the world. The English output is confined chiefly to the small types of machines. There are also good machines made in Germany, but domestic manufacturers do not fear German com- petition. Rates suggested. The witness continues the argument of Mr. Davidson, requesting a reduction of the duty to 15 per cent. Many countries (England, Belgium, Canada, Italy, Australia, Spain, India, and Korea) have put in force excessively high tariffs, which have greatly hindered the development of American export to these coun- tries, and it is hoped that a reduction of the American duty will furnish effective propaganda for the reduction of foreign tariffs. Such a reduction will not result in a large increase in importation: The manufacturers of motor cycles in this country do not fear foreign competition, but rather invite it, as it would help in the development of the industry. PARAGRAPH 372. TEXTILE MACHINERY. WITNESS, AND INTEREST REPRESENTED. FAVORING LOWER DUTIES : Mr. Joseph F. Lockett, representing Leigh & Butler, importers; address, Boston, Mass. Hearings: Pages 1839-1851. Costs and selling prices. Leigh & Butler represent Messrs. Platt Bros., of England, the largest builders of textile machinery in the world. The cost of Platt's machinery at the British shops is nearly 50 per cent higher than the prices charged by American manufac- turers for similar machinery. Sales in the past few years, in nearly every instance, have been at prices higher than those of American machines and have been possible only because of the insistence of the domestic mills upon having Platt's machinery. An importer was recently asked to bid on the equipment for a small mill; the foreign quotation was nearly $1,250,000, while the American producer quoted about $500,000. Labor costs in England for textile machinery are about twice what they are in this country ; it was said not long ago by an official con- nected with one of the largest American machine builders that the 228 DIGEST OF TARIFF HEARINGS, H. R. 7456. labor cost per machine for textile machinery was less in the United States than in England. Prices in England have increased since 1909 over 200 per cent, while the pound has depreciated oifly about 35 per cent. Platt's prices in 1909 were list less 15 per cent, in 1915 they were list less 5 per cent, and the average peak advance since then has been list plus 200 per cent. Size of industi*y. Platt Bros, in England employ about 12,000 persons. Comparability. Platt's machinery is world famous for its con- struction, durability, and efficiency. It will last longer and require less repairs than American machinery. The bulk of the imported product is used by American cotton and worsted mills. There are some mills that will use only Platt's and the bulk of users of cotton- mill machinery prefer the foreign machinery if they can get it at a fair price. For most of Platt's machinery imported in the past 10 years a premium has been paid by the consumer in order to obtain it. Rates suggested. Free list. There is no real competition between English and American machine builders as to price. The major part of English textile machinery could never compete with Ameri- can machinery as to price unless Congress should, in addition to plac- ing it on the free list, grant a substantial bonus to the importer. The value of the imports of textile machinery during each of the years 1916, 1917, 1918 was the approximate cost of fitting up one small mill of about 25,000 spindles. PARAGRAPH 372. WATCHMAKERS' LATHES. FAVORING PROPOSED OR HIGHER DUTIES : The Moseley Lathe Co., Elgin, 111. (Two briefs, of July 15 and October 22, 1921, respectively; no appearance at hearings.) Comparability. The price of the Moseley lathe with ten-chuck combination is now $90. This is $10 less than the price in 1919. al- though wages have since been reduced not more than 5 to 10 per cent. The W. W. lathe, 10-chuck combination, and the Derbyshire (both made in Waltham, Mass.) are $86.35. A German imitation of these lathes, the Boley lathe, is being steadily imported into this country and is listed at $45. The German lathe copies the American design and is strictly competitive as regards quality. Rates suggested. A. high protective tariff of 200 to 300 per cent on the basis of foreign valuation ; under the American valuation plan, a rate materially higher than 35 per cent. PARAGRAPH 372. SHUTTLES FOR SEWING MACHINES, ETC. WITNESS. FAVORING LOWER DUTIES : J. A. Coates & Sons (Ltd.), manufacturers of needles, etc., East Orange, N. J. (Brief; no appearance at hearings.) Size of industry. Outside of the sewing machine manufacturers there is only one concern in America making sewing machine shut- tles the Johnson Shuttle Co., Chicago, 111. DIGEST OF TARIFF HEARINGS, H. R. 7456. 229 Retnarks. The Johnson Shuttle Co.'s prices are exorbitant be- cause of the lack of competition. Their prices are 300 per cent higher to-day than before the war, and they are not obliged, as others are, to come down in their prices, because there is no one to underbid them. PARAGRAPH 374. ALUMINUM, CRUDE, SCRAP, AND ALLOTS. < WITNESSES, AND INTEKESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : The Aluminum Co. of America. (Brief.) FAVORING LOWER DUTIES : Mr. Harris E. Galpin, representing the National Aluminum Foundries' As- sociation. Mr. Lawrence M. Brile, representing Brile & Ratner (Inc.), New York City. Witness: The Aluminum Co. of America. (Brief; no appearance at hearings.) Comparability. The company's price for ingot aluminum, sub- stantially less than cost, is 20 cents per pound. In November, 1921, German quotations for 98 to 99 per cent virgin aluminum ranged from 16^ to 17 cents and for 99 per cent, 17 to 17^ cents. Both France and Germany would probably accept a large order at 16 cents or a shade less. Norway is quoting 18 cents, but a small producer in Switzerland asks 17 cents. The chief producers in Switzerland and Great Britain are, however, holding closely to the American com- pany's prices. The European cost of making aluminum is substan- tially less than the cost in the United States. It takes 5 tons of bauxite, worth approximately $50, to produce 1 ton of aluminum. The European manufacturer has an enormous advantage, his raw ma- terial and transportation costs being trivial as compared with those paid in the United States. In this country, the haul from the mines to the smelting plants will average about 1,100 miles, while in France, for example, the haul is approximately only 150 miles. American bauxite is inferior, containing an average of 55 per cent of alumina as compared with 62 per cent in the European. The latter also con- tains only 3 per cent of silica, whereas the American contains 8 or 9 per cent. The removal of silica from bauxite is one of the most ex- pensive operations in the whole process of manufacture. The over- head expense of the Aluminum Co. of America is over 6 cents per pound, and there is an additional interest charge of nearly 6 cents, resulting from the investment by the company of a little less than $1 for each pound of aluminum produced in a year. European producing capacity was largely increased during the war, and present relative capacities are approximately as follows: Pounds per annum. England 26, 000, 000 France 37, 000, 000 Germany 76, 000, 000 Austria 10, 000, 000 Switzerland 52, 000, 000 Italy 15, 000, 000 Norway 48s 000, 000 Total 264, 000, 000 7213422 16 230 DIGEST OF TARIFF HEARINGS, H. R. 7456. Even in normal times the above countries can consume only a frac- tion of their production, and in several of the countries consumption is negligible. At the present time almost their entire surplus is des- tined for sale in the United States, since there is no substantial con- sumption elsewhere in Europe, Asia, Africa, etc. In 1911 the world consumption of aluminum outside of the United States was 55,000.000 pounds, or about one-fifth of the aggregate foreign capacity as given above. It is doubtful if the present foreign consumption is even as great as in 1911. The present producing capacity of the United States is approximately 180,000,000 pounds per annum, which com- pares with the maximum consumption (1920) of approximately 170,- 000,000 pounds, reduced in 1920 to only 75,000,000. Imports during 1921, based on the statistics of the first six months, have been at the rate of 45,000,000 pounds per arinum, or, roughly, one-half the total consumption. The principal importations come from Germany, France, and Switzerland production in all of which countries is protected by tariff or the more prohibitive barrier of importation licenses. The French tariff is 6.57 cents per pound on ingot, 9.81 cents on sheet, and 13.84 cents on wire and cable at normal rates of exchange. Importation into Germany is absolutetly prohibited. Size o industry. During the last 13 months the Aluminum Co. of America has borrowed $30,000,000, used principally to carry the heavy stock of aluminum which it has been unable to sell against foreign competition. On January 1, 1921, it employed over 20,000 men ; 11 months later it had only 8,000. The company is not a com- bination or a merger. It created the aluminum industry, and during its 33 years of existence has never bought, or merged with, an aluminum plant. All of its plants have been built with its own money, most of it earned in the business. During the last 30 years it has made on an average 15^ per cent per annum on the capital in- vestment. Of this, 2^ per cent has been paid in dividends and 13 per cent put back into the business. Its profits have come largely from fabricated goods, which have thus reached the consumer with but a single profit. Hearings : Pages 2044-2046. Witness: Mr. H. E. Galpin, representing the National Aluminum Foundries' Association. Costs and selling prices. The selling prices of aluminum foundry products are influenced largely by the price of the raw material aluminum the domestic production and supply of which are mo- nopolized by one concern the Aluminum Co. of America. It is written in the history of that company that the price of its product has been based upon the price of aluminum in Europe plus freight and duty. There is a point at which the desirability of aluminum as a metal may be subverted by the price which must be secured for castings; that point being passed, customers will look for and turn to another metal. Size of industry. The National Aluminum Founders' Association represents about 14 or 15 independently owned aluminum foundries, with an invested capital of approximately $9,000,000 or $10,000.000, and employing normally between 9,000 and 10,000 men. These DIGEST OF TARIFF HEARINGS, H. R. 7456. 231 foundries are not owned, controlled or connected by stock ownership with the Aluminum Co. of America. The membership of the or- ganization represents about 35 or 40 per cent of the foundry produc- tion business in the United States. Probably 30 per cent of the re- maining 60 or 65 per cent of the business is controlled by the subsid- iary companies of the Aluminum Co. of America. There are between 40 and 50 such foundries in the United States, besides many small ones (one-man foundries) which, if included, would make the total perhaps 200 or 300. Rates suggested. Any increase in the present rate of duty (2 cents per pound) is opposed; the duty, if not wholly removed, should at least be left on its present basis. In no event "should any but a specific rate be imposed. In view of the situation at the present time, it is contended that the independent manufacturers in the aluminum foundry industry should not be limited by -a prohibitive tariff to one source of raw material supply, which would be the effect if paragraph 374 of the Fordney bill, in its present form, became law. Hearings : Pages 2031-2043. Witness: Mr. L. M. Brile, representing Brile & Ratner (Inc.). Costs and selling prices. The overhead charges of 6 cents plus interest charges of 6 cents, a total of 12 cents, claimed by Mr. Davis as representing the costs of the Aluminum Co. of America, are false. In support of this statement he cited the average price of crude aluminum from 1910 to 1914, inclusive, as 21.61 cents per pound, whereas in 1914 the average price was 18.595 cents. Deducting 12 cents from the latter figure leaves only 6.595 cents per pound, out of which the American Co. had to pay for its raw material, production costs, and profit. When placing some bond issues, Mr. Davis stated that in no year since 1915 had the earnings of his company been less than $10,000.000. Although the earnings for 1914 are not available, it is known that the investment of the company has increased from $30,000,000 in 1913 to $200,000,000 at present, all out of earnings. Assuming, however, $10,000,000 earnings for 1914 and an output of 90,000,000 pounds, the profit alone per pound would amount to ap- proximately 11.25 cents; if the 12 cents overhead and depreciation charge be added to this, the total is 23.25 cents as compared with a selling price of 18.595 cents, with no allowance for raw material or direct production costs. The witness further asserts that foreign producers are subject to overhead and depreciation charges as well. He also charges that the Aluminum Co. of America maintains prices at just about the importation level. The quantity of aluminum uti- lized in industry would be materially increased if it were cheaper. Rates suggested. The rate on sheets, circles, etc., should be not more than 1| cents per pound in excess of the duty on ingot. Prior to the war witness could roll sheets for 5 cents and coils for 4 cents per pound ; perhaps one-third of this cost was for labor. He also suggests that "coils" (aluminum sheets or strips in rolls) be spe- cifically mentioned. 232 DIGEST OF TARIFF HEARINGS, H. R. 7456. PARAGRAPH 378 ROLLED BRASS AND COPPER PRODUCTS. WITNESS, AND INTERESTS REPRESENTED. FAVOKING PROPOSED OR HIGHER DUTIES : Mr. Frank H. Hoffman, representing the Detroit Copper & Brass Rolling Mills and the American Brass and Copper Statistical Exchange, compris- ing 15 manufacturers. Hearings : Pages 2047-2053. Costs and selling prices. The minimum German wages are 60 marks and the maximum 80 marks per day, respectively equivalent to 70 and 90 cents. Common labor in British plants receives about 23 cents an hour. Wages in American plants are 45 cents an hour. The French* labor scale is about one-third of the domestic. Copper sheets sell for 19 to 50 cents a pound ; seamless tubes from 19 to 65 cents a pound, small sizes going from 29 cents to $4.70 per pound. Brazed copper tubes vary in price from 30 cents to $1.40 per pound. Sheet brass sells for from 15 to 55| cents ; seamless brass tubes from 18 to 64 cents, and tubing from 28 cents to $4.60 per pound. Brazed brass tubes are priced from 27 cents to $1.37 a pound, brazed rods and sheets from 16 to 55 cents, and seamless brazed tubes from 22 to 68 cents a pound. The paragraph in H. R. 7456 dealing with copper and brass manufactures placed a poundage rate on all of these products, regardless of value. The value depends upon the size of the sheet or the diameter of the tube, on special tempering processes used in the manufacture, on special finishes and other factors, in all of which labor plays an important part. Size of industry. The copper and brass industry is very large ; it is essential to the national welfare. Production units are expen- sive, require heavy machinery, and large labor organizations. They can not be assembled, on short notice and expansion is necessarily slow. The products of this industry are vitally important to domestic welfare in times of war and enter largely into the manufacture of munitions. They are also important components of automobiles and other machinery. Domestic plants, while formerly at a dis- advantage in competition with the foreigner because of the higher labor wages paid here, had an advantage because of more up-to-date machinery. The foreigner has, however, been busy for some time in copying American methods of copper and brass manufacture. The representative of a prominent English manufacturer spent considerable time in this country and familiarized himself with American practice and equipment. All foreign nations producing brass and copper products are preparing to compete in the American market. Rates suggested. The following rates on copper and brass rods in place of the rates proposed in H. R. 7456, because of the difference in prices discussed under " Costs and selling prices " : Sheet copper, both hot and cold rolled, in the form of sheets, plates, etc., all lengths, but not over 36 inches wide; heavier than 24 ounces per square foot, 4 cents per pound ; more than 14 and not more than 24 ounces per square foot, 6 cents per pound ; more than 12 and not more than 14 ounces per square foot, 8 cents per pound ; 12 ounces or less per square foot, 11 cents per pound ; in addition to above duties, 1 cent per pound for widths between 36 and 72 inches, and 2 cents additional for widths over 72 inches; sheet copper not in- cluded in above and coated with tin. and polished. 12 cents per pound ; copper DIGEST OF TARIFF HEARINGS, H. R. 7456. 233 engravers' plate, not ground, 8 cents per pound ; copper engravers' plates, ground and polished, 16 cents per pound. Copper in rolls or coils: All widths over 2 inches, No. 23 Brown & Sharpe gauge and heavier, 4 cents per pound ; less than No. 23 but not less than No. 26 Brown & Sharpe gauge, 5 cents per pound ; less than No. 26 but not less than No. 31 Brown & Sharpe gauge, 6 cents per pound; less than No. 31 but not less than No. 34 Brown & Sharpe gauge, 1 cents per pound ; less than No. 34 Brown & Sharpe gauge, 10 cents per pound; in widths 2 inches and under, also not specified above, 12 cents per pound. Sheet brass and sheet bronze, brass and bronze plates, Muntz and yellow metal sheets and sheathing, widths 2 to 16 inches; No. 24 Brown & Sharpe gauge and heavier, 4 cents per pound ; less than No. 24 but not less than No. 30 Brown & Sharpe gauge, 5 cents per pound ; less than No. 30 but not less than No. 33 Brown & Sharpe gauge, 6 cents per pound ; less than No. 33 Brown & Sharpe gauge, 9 cents per pound; all other widths and gauges not specified above, 11 cents per pound. Brass and copper rods, bars, and strips, bolts, piston rods, and shafting and brass wire: Over five-eighths inch in diameter or equal cross section, 2$ cents per pound; three-sixteenths to five-eighths inch in diameter or equal cross section, 3$ cents per pound ; one-eighth to three-sixteenths inch in diameter or equal cross section, 4 cents per pound ; No. 11 Brown & Sharpe gauge to one- eighth inch in diameter or equal cross section, if rectangular, 6 cents per pound ; not specified above, 8 cents per pound. Seamless, brazed, and lock-seam or lapped tubes and pipes in copper, brass, and bronze : Heavier than li to 4 inches, inclusive, outside diameter, and No. 14 Stubs gauge and heavier, 5 cents per pound ; three-eighths to 1 inches, inclusive, outside diameter, and No. 14 Stubs gauge and heavier, 9 cents per pound; three-eighths to li inches outside diameter, inclusive, and No. 14 Stubs gauge and heavier, 10 cents per pound; more than 1 inch to 4 inches outside diameter, inclusive, and lighter than No. 14 Stubs gauge, but not lighter than No. 24 Stubs gauge, 15 cents per pound; three-eighths to 1 inch outside diameter, inclusive, and lighter than No. 14 Stubs gauge, but not lighter than No. 24 Stubs gauge, 16 cents per pound ; larger than 4 inches outside diameter and lighter than No. 14 Stubs gauge, 20 cents per pound. Seamless drawn brass, bronze, and copper tubing : One-eighth to 1 inch in diameter, both inclusive, No. 18 to No. 28 Brown & Sharpe gauge, both inclusive, 20 cents per pound ; one-eighth to 1 inch in diameter, both inclusive, No. 28 to No. 35 Brown & Sharpe gauge,' both inclusive, 40 cents per pound ; smaller than one-eighth inch in diameter, No. 19 to No. 35 Brown & Sharpe gauge, both in- clusive, 60 cents per pound. All copper and copper alloys wherein copper is the principal component part not otherwise specified in the above schedules, 12 cents per pound. The specific duties asked for in no case amount to more than 40 per cent on American valuation. Duties on sheet copper run from 18 to 30 per cent, with an average of 24. Copper in sheets, rolls, and coils runs from 20 per cent to 32 per cent, with an average of 26. On sheet brass and plates and brazed sheets and plates the duties run from 24 to 30 per cent, with an average of 28. On brazed rods and brass wire they run from 18 to 32 per cent, with an average of 25, and on tubes and pipes from 24 to 40 per cent, with an average of 30. The duties asked on manufactures of copper and alloys of copper not otherwise specified amount to 25 per cent. PARAGRAPH 378. COPPER, BRASS, AND BRONZE WIRES. WITNESS. REQUESTING RECLASSIFICATION : The Standard Underground Cable Co., of Pittsburgh, Pa. (Brief; no appearance at hearings.) Rates suggested. It is urged that copper, copper-clad, brass, and bronze wires be classified under paragraph 316 as eventually adopted 234 DIGEST OF TARIFF HEARINGS, H. R. 7456. by the House, and not included in paragraph 378 under any specific rate, as suggested by the American Brass and Copper statistical Exchange. Although the suggested rate of 4 cents per pound is sufficiently high for some, of the larger base sizes, it is entirely inadequate for the finer sizes of wire. Assuming even as low a price as 14 cents base for brass or bronze wire, and with a No. 30 wire taking an ad- vance of 10 cents above base, a specific rate of 4 cents per pound on the valuation of 24 cents would be about 16| cents, while at 20 per cent ad valorem it would be 4.8 cents. Experience indicates that foreign competition would be principally in the finer sizes of wire, as recognized in the amendment of the Ways and Means Committee to have these reinstated in paragraph 316 at an ad valorem rate. While a specific duty is naturally most desirable for some products, it would not be applicable to these wires, of which there are about 40 sizes, each size representing different manufacturing costs and all fluctuating with the general market conditions. PARAGRAPH 379. BRONZE POWDER. WITNESSES. FAVORING PROPOSED OB HIGHER DUTIES : The Bronze Powder Manufacturers' Association. (Brief.) FAVORING LOWER DUTIES: Leo Uhlf elder Co., New York City. (Brief.) Witness: The Bronze Powder Manufacturers' Association, Eliza- beth, N. J. (Brief; no appearance at hearings.) Size of industry. The association comprises nine manufacturers five in New Jersey and one each in Connecticut, New York, Pennsyl- vania, and Ohio. Four of these firms were in business before the war, supplying about one-half the bronze powder used in the United States. Two of these four have increased their capacity until, in- cluding the five new plants, the total capacity of American bronze- powder factories now exceeds the domestic consumption. The nine manufacturers are in active competition with one another besides competing with German products. Comparability. Under some government agency, all the German manufacturers are organized into a combination, \vhich fixes the prices at which these goods are to be sold in the respective foreign countries. These prices, as fixed in March, 1921, for shipping to other countries, are, in marks, double the prices at which these goods are sold to consumers in the United States. German competition is naturally severe, owing to cheap labor, but with the deliberate effort to undersell in America, indicated by fixing the price at one-half that to other countries, competition without a very high tariff is almost impossible. German bronze powder is being sold for export into the United States at 20 marks net per pound. Packing and trans- portation makes the cost of delivery here about 45 cents per pound. As against this it costs American manufacturers 65 cents per pound, of which the cost of the copper alloy (raw material) is 20 cents, manufacturing 30 cents, packing and transportation 5 cents, selling and overhead 10 cents. American manufacturers believe that al- though the German workman receives only about one-sixth of the DIGEST OF TARIFF HEARINGS, H. R. 7456. 235 wages paid in this country, the German manufacturers are losing money on the bronze powder exported to the United States, and that this loss is taken care of, through the syndicates, out of profits made in business in other foreign countries. The above remarks apply to bronze powders made from copper alloy and known in the trade as gold bronzes. Aluminum bronze powder is made by three of the companies represented in this brief and by other manufacturers in this country. Like gold bronze pow- der, it is used for decorative purposes, but it is also employed in fire- works, rockets, and certain explosives. In case of war-time necessity every plant manufacturing gold bronzes could utilize the same ma- chinery for making aluminum bronze powder. Rates suggested. " The bronze-powder manufacturers agree with the Tariff Commission that a specific duty is more practical than an ad valorem rate. They suggest that in addition to a permanent duty there should be devised some method to prevent ' dumping ' by an automatic increase of duty." Witness: Leo Uhlfelder Co., New York City. (Brief; no appear- ance at hearings.) Rates suggested. The rates on bronze powder in the Fordney bill to be reduced to between 8 cents and 12 cents per pound, which " would be about sufficient to protect the American industry." The firm asserts that the German bronze-powder manufacturers are im- mense users of American copper, and that the loss of this export trade would more than offset any injury done to the American bronze- powder industry, employing, as it does, less than 200 people, most of whom are foreigners. PARAGRAPH 380. GOLD LEAF. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. F. W. Rauskolb, representing the United States Gold Leaf Manu- facturers' Association. Mr. Frederick Pyre, manufacturer of gold leaf, Philadelphia, Pa. (Brief.) Hearings : Pages 2054-2055. Witness : Mr. F. W. Rauskolb. Costs and selling prices. Labor costs in the United States, per 100 leaves of gold leaf , are $1.16. Labor in Germany for the same product costs 11.4 cents, a difference of $1.046 per 100 leaves. Wages paid in the United States are $44 a week per man as against the Ger- man rate of 300 marks or $4.50 (the mark at H cents) . The weekly production per man is 5,000 leaves of gold. The raw material is gold, having the same value here as in Germany. German and Japanese prices for 500 leaves of gold leaf are $8.25. Rates suggested. One dollar per 100 leaves of gold leaf, 3| by 3| inches, this duty being necessary to counteract the advantage held by the foreign manufacturer of $1.04 per 100 leaves in his labor cost. Witness : Mr. Frederick Pyre, manufacturer of gold leaf, Phila- delphia, Pa. (Brief; no appearance at hearings.) Comparability. Labor costs in this country and in Germany, for 100 leaves, are, respectively, $1.16 and $0.114. 236 DIGEST OF TARIFF HEARINGS, H. R. 7456. Rates suggested. A duty of $1 per 100 leaves (being or equivalent to 3| by 3f inches) and proportionately. This does not quite equal- ize labor costs. PARAGRAPH 382. TINSEL WIRE, LAME OR LAHN. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. George M. Montgomery, representing the J. R. Montgomery Co., manu- facturers, Windsor Locks, Conn. FAVORING LOWER DUTIES: Mr. B. Wilmsen, Philadelphia, Pa., representing himself. Hearings : Pages 2056-2057. Witness: Mr. G. M. Montgomery, representing the J. R. Mont- gomery Co. Rates suggested. A brief submitted by the witness asserts that in the printing of H. R. 7456 an error crept into the text of paragraph 382 which entirely changes the meaning of certain clauses. The text proposed reads : Tinsel wire, lame or lahn, made wholly or in chief value of gold, silver, or other metal, 10 cents per pound and 25 per cent ad valorem; bullions and metal threads, made wholly or in chief value of tinsel wire, lame or lahn, 10 cents per pound and 35 per cent ad valorem ; ribbons, beltings, toys, or other articles made wholly or in chief value of tinsel wire, lame or lahn, or of tinsel wire, lame or lahn, and India rubber, bullions, or metal threads, not specially provided for in this section 60 per cent ad valorem ; woven fabrics, fringes, and tassels, made wholly or in chief value of any of the foregoing, 70 per cent ad valorem. whereas in the bill as reported by the Ways and Means Committee it reads: Tinsel wire, lame, or lahn, made wholly or in chief value of gold, silver, or other metal, 10 cents per pound and 30 per cent ad valorem ; bullions and metal threads made wholly or in chief value of tinsel wire, lame or lahn, 10 cents per pound and 35 per cent ad valorem ; ribbons, beltings, toys, and other articles made wholly or in chief value of tinsel wire, lame or lahn, and India rubber, bullions, or metal threads, not specially provided for, 45 per cent ad valorem ; woven fabrics, fringes, and tassels made of any of the foregoing, 55 per cent ad valorem. The error lies in the omission on page 82, line 18, of this bill, of the words " or of tinsel wire, lame, or lahn " after the word " lahn." The brief proposes also the addition of the words " wholly or in chief value " after the words " and tinsels, made." These changes would clarify the meaning of the paragraph and obviate possible litigation. Remarks. In a supplementary brief, filed subsequent to the testi- mony of Mr. Wilmsen (pp. 2056-2057) the Montgomery Co. asserts that during the war they manufactured most of the tinsel used in this country, oince the war they have made about one-third, the balance being supplied by other domestic manufacturers and by imports. The company denies emphatically that their product is inferior to the imported article and declares, further, that the highest price charged by them to Mr. Wilmsen or others purchasing tinsel, during or since the war years, was $280 per case of 100 kilos. The shipment mentioned by Mr. Wilmsen may have been purchased through New York jobbing houses, in which case it would be impossible to deter- mine its origin. Tinsel to-day may be landed in New York without DIGEST OF TARIFF HEARINGS, H. E. 7456. 237 duty for $160 per case of 100 kilos. The domestic article is selling at the present time for $205 f . o. b. manufacturing plants. Hearings : Pages 2055-2056. Witness : Mr. H. Wilmsen, representing himself. Costs and selling prices. The present import price of tinsel is about $190 per case of 100 kilos ; applying the rate of 6 per cent, as specified in the Underwood Act (equivalent to $11.40) and adding a charge of $1 per case for haulage and freight, the landed price becomes $202.40. When deliveries were not being made from abroad, witness was forced to turn to the American manufacturer, who charged him $425 per case of 100 kilos for inferior tinsel. Size of indust?*y. There are three toy and Christmas-tree factories in the United States, one in Philadelphia, one in Baltimore, and the other in Manitowoc, Wis. These employ about 500 persons. Comparability. Domestic tinsel is inferior to the imported article. Rates suggested. The rate of 5 cents per pound on tinsel wire, lame or lahn, as provided in the acts of 1897 and 1909 should be restored on the ground that duties as proposed in H. R. 7456 will force domestic manufacturers to use tinsel wire under the absolute control of the only manufacturer of it in the United States. The specific rate would permit importers readily to determine the amount of duty to be paid, would eliminate litigation, and relieve the United States appraising officers of considerable difficulty in determining values. Remarks. A brief, supplementing the testimony of Mr. George M. Montgomery (pp. 2056-2057), bears upon certain parts of the foregoing testimony. PARAGRAPH 383. QUICKSILVER. FAVORING PROPOSED OR HIGHER DUTIES : Hon. Samuel Shortridge, United States Senator from California. (Brief; no appearance at. hearings.) Costs and selling prices. England for years has controlled the quicksilver market, as the output of the mines of Spain, the largest and richest in the world, is under contract to the Rothschilds at a figure much below the cost of production in the United States. Size of industry. Quicksilver is produced in four countries Spain, Italy, Austria, and the United States. Rates suggested. The tariff provided in H. R. 7456 will enable sufficient mines to operate to supply the demand and save these mines to the country in case of war. Remarks. The writer submits a copy of a letter written by the Hon. John W. Weeks, Secretary of War, to the Committee on Ways and Means, House of Representatives, setting forth the importance of quicksilver in the manufacture of war munitions, drugs, chemicals, and certain electrical equipment, and referring to the capability of the domestic industry to meet the normal peace demands of the coun- try. It is pointed out, however, that it may be but a short time be- fore these demands can no longer be met from domestic supplies, this being possible because of the steady reduction in producing 238 DIGEST OF TARIFF HEARINGS, H. R. 1456. mines, brought about by the prevailing high cost of labor and sup- plies and declining market prices. The opinion is expressed that protection of the quicksilver industry is essential to the needs of the country, and a tariff sufficiently high to maintain it in times of peace is recommended to that end. PARAGRAPH 385. NICKEL. WITNESS. REQUESTING RECXASSIFICATION : The American Brass and Copper Statistical Exchange. (Brief; no appear- ance at hearings.) Specific provision is requested for nickel silver and tin bronze sheets and rods by inserting the following additional paragraphs : Sheet nickel silver and alloys of copper containing tin, widths over 2 inches and including 16 inches No. 24 Brown & Sharpe gauge and heavier, 8 cents per pound; thinner than No. 24 but not thinner than No. 30 Brown & Sharpe gauge, 10 cents per pound ; all other gauges and widths, 15 cents per pound. Nickel silver rods and rods of copper alloys containing tin, not under f inch in diameter or equivalent cross section, 10 cents per pound ; not under -ft to inch, 13 cents per pound ; not under % to 1% inch, 15 cents per pound ; and under i inch but not under No. 11 Brown & Sharpe gauge, 19 cents per pound. PARAGRAPH 386. PIG TIN. WITNESS. FAVOBING LOWER DUTIES : The National Association of Dairy Supply Houses, Chicago, 111. (Brief; no appearance at hearings.) Size of industry, Pig tin enters to quite a large extent into this business. The pig tin produced from Bolivian ores is regarded as unsuitable for the association's purposes. Rates suggested. The association asks that the duty of 2 cents per pound on pig tin, in H. R. 7456, be not imposed. These statements are included in a resolution adopted at a meeting of the association on October 11, 1921. PARAGRAPH 386. TIN SOLDER. WITNESSES, AND INTERESTS REPRESENTED. FAVORING LOWER DUTIES : The Solder and Bearing Metal Manufacturers' Association. (Brief of August 3, 1921.) The American Smelting & Refining Co. Frishmuth Bros. & Co., Phila- delphia, Pa. (Brief.) Witness : The Solder and Bearing Metal Manufacturers' Associa- tion. (Brief; no appearance at hearings.) Rates suggested. Protest is made against placing a duty on tin. The only tin that it is possible to smelt in the United States is made from Bolivian ore. This tin has such properties as to make it unfit for use for the manufacture of tin plate, high-grade solders and bear- ing metals, for rolling into foil, for manufacturing into collapsible tubes, or for tinning high-grade steel products. At the best, the association can not smelt and refine and use Bolivian tin to amount DIGEST OF TARIFF HEARINGS, H. R. 74.56. 239 to more than 25 per cent of its total tin requirements. A duty on Bolivian tin will not increase consumption, as it is now being used to as great an extent as it can be, owing to the fairly limited purposes for which it is adaptable. The tin produced from Bolivian ore is generally known as second-quality tin, although lately sold under the term of 99 per cent tin. Comparability. The Department of Commerce states that the cost of smelting and refining tin in the Straits Settlements, including overhead, is from 4 to 6 per ton. Inquiry in England indicates the same cost in that country; hence, any duty beyond $10 to $12 per net ton would exceed the entire labor cost expended on the smelting and refining of tin in the United States, given as from $10 to $15 per net ton in the brief. Witness : The American Smelting .& Refining Co. Replying to the above-cited brief under date of September 16, 1921, the company asserts that its electrolytic tin is purer than the best Straits tin, and has been used for all the products for which it is claimed to be suit- able by the Solder and Bearing Metal Manufacturers' Association. Touching the assertions made in regard to smelting and refining costs, the company calls attention to the fact that in the Straits Settlements and in England further refining is unnecessary, pure tin ores being available, whereas in the United States it is impossible to obtain pure ores for mixing with the Bolivian ore, which, when smelted alone, does not give a sufficiently high grade of product for tin plating. The proposed duty of 2 cents, therefore, would compensate only for this extra -cost of producing tin comparable with Straits tin, not to speak of the higher labor costs here as compared with those abroad. A further statement from the Solder and Bearing Metal Manufac- turers' Association, dated September 27, reiterates the statements made in the earlier brief (abstracted above), citing as evidence the > inferior quality of American tin and the various protests presented by consuming interests against the proposed duty. In support of the association's claim that the duty would benefit only the American Smelting & Refining Co., it is stated that the duty will be added to the price, not only of Straits tin, but of all other tins. In. spite of the unquestionable inferiority of 99 per cent tin it now sells for only one-half cent per pound less than Straits. Increasing the price on this tin would simply serve the purpose of enabling the smelters of Bolivian tins to get a better price for their product. As regards the statement of the American company that only by the electrolytic process is it possible to produce a good tin from Bolivian ore, and that it costs 2 cents per pound additional for that process, that is a confession that the company has a monopoly on this kind of tin and wants to have a duty equal to the entire cost of such refining. Witness: Frishmuth Bros. & Co., tobacco and cigarette manufac- turers, Philadelphia, Pa. (Brief; no appearance at hearings.) The firm protests against the iiuty on tin as adding to the cost of their product to the ultimate consumer. 240 DIGEST OF TARIFF HEARINGS, H. R, 7456. PARAGRAPH 386; ALSO PARAGRAPHS 389 AND 393. TINFOIL, ETC. WITNESS, AND INTEREST REPRESENTED. FAVORING LOWER DUTIES : Mr. Egbert Moxham, representing the Conley Foil Co. Hearings : Pages 2057-2067. Witness: Mr. Egbert Moxham, representing the Conley Foil Co. Size of industry. The tinfoil business is a long-established Ameri- can industry, carried on by a number of firms with plants established in various parts of the country; they use approximately 4,000 tons of tin per year, or about 6 per cent of the total consumption of the country. Rates suggested. The Fordney bill removes metallic tin from the free list and places on it a duty of 2 cents per pound. It advances the duty on lead from 25 per cent ad valorem to a specific duty of 2 cents per pound, equivalent at normal lead prices to 100 per cent increase. Tinfoil receives a protection of 35 per cent ad valorem, as compared with 20 per cent in the Underwood bill and 45 per cent in the Payne-Aldrich bill. It is the urgent contention of the tin- foil manufacturers of the United States that they are thus subjected to unjust discrimination. There exists to-day in this country no mining of tin, and the assessment of a duty on imports of tin in ore, while protecting no American industry, can not fail to increase materially to United States consumers the cost of all products into which tin enters, or to react most unfavorably upon manufacturers dependent upon tin for a considerable part of their raw material. In view of these considerations, the committee was strongly urged not to favor the levying of an important duty on tin in ore, on the broad general ground that it is not a protective measure and that it is unjust to impose on one commodity so abnormal a levy for revenue purposes only. Suggestions in detail follow : Tin : Tin should remain on the free list. The tin industry is not entitled to the protection sought. The dependence of the United States on the outside world for tin is so absolute as to make it almost self-evident that any import duty imposed by the United States will be followed by retaliatory duties on the part of producing countries. This would serve to build upon domestic prices not only the import duty proposed but the retaliatory export duties occasioned thereby. As to tin-foil, into which tin enters largely, this would work not only a decided hardship to the producer but also to the consuming public in the enhanced prices created. If the existing schedule on tin is changed, tin-foil should carry, in addition to such ad valorem duty as it may enjoy, a specific duty based on the metallic content of the foil to the extent of the specific assessments on tin over the present schedule. Lead: A protection of approximately 50 per cent ad valorem is unnecessarily high. Statistics show that this country is producing its full requirement of lead and is exporting large quantities, indi- cating that the industry is in a position to compete successfully with foreign producers. DIGEST OF TARIFF HEARINGS, H. R. 7456. 241 A suggested amendment to paragraph 393, following the words 41 35 per cent ad valorem," runs as follows : Provided, That any manufactured product covered herein, composed in whole or in part of metals upon which there has been imposed by this act specific duties, shall carry, in addition to the ad valorem duty herein enacted, a specific duty of the same rate as is enacted for the metal components by other provisions -of this act. PARAGRAPH 387. BOTTLE CAPS. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Egbert Moxham, representing the Conley Foil Co. Hearings : Pages 2057-2067. Witness : Mr. E. Moxham, representing the Conley Foil Co. Costs and selling prices. Although American methods in the manufacture of bottle caps are believed to be the most advanced in use, the prices that manufacturers are able to quote are materially higher than those of their foreign competitors. Foreign prices are lower by reason of lower values of materials (lead and tin) and labor. The following is a comparison of prices of bottle caps, as quoted by a large German manufacturer, with domestic prices in the United States (converted at the rate of 1 German mark equals 1.28 cents) : Plain bottle caps German price, per 1,000 $0. 54-$l. 18 American price, per 1,000 3.65- 4.75 Colored bottle caps German price, per 1,000 . 79- 1.45 American price, per 1,000 . 4. 49- 5. 59 To land caps in this country carrying charges would have to be added to the German figures. Size of industry. There were at one time a number of manufac- turers of bottle caps in the United States, but severe foreign competi- tion compelled one company after another to give up the manu- facture. To-day, so far as is known, the Conley Foil Co. is the only manufacturer now in business in this country. Rates suggested. The following provision is urged in place of paragraph 387 : Bottle caps of metal, collapsible tubes, and sprinkler tops, if not decorated, colored, lacquered, waxed, enameled, lithographed, electroplated or embossed in colors, 60 per cent ad valorem ; if decorated, colored, waxed, lacquered, enameled, lithographed, electroplated, or embossed in colors, 10 per cent extra ad valorem for every color or lacquer, enamel, lithographing (electroplating or embossing Bronze to be counted as two colors), plus a specific duty of 2J cents per pound. PARAGRAPH 389. TYPE METAL AND OTHER LEAD ALLOYS. WITNESS. REQUESTING ADDITIONS : The United Lead Co., New York City. (Brief; no appearance at hear- ings). Attention is directed to the omission of tin and antimony from the combinations of metals referred to in paragraph 389. Type metal, Babbitt metal, and solder are combinations mainly of lead, tin, and antimony, and the omission (presumably accidental) of the two latter metals would open up the opportunity of importing 242 DIGEST OF TARIFF HEARINGS, H. R. 7456. them mixed with lead, although H. R. 7456 clearly provides for i duty on tin and antimony in their raw state. PARAGRAPHS 390 AND 391. ALSO 74 AND 88, or SCHEDULE 1. ZINC ORES AND METAL ; ZINC OXIDE AND COMPOUNDS. (See also pars. 74 and 88 of Schedule 1, pp. 1295-1297.) WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. E. H. Wolff, representing the American Zinc Institute, New York City. Mr. William A. Ogg, president American Zinc, Lead & Smelting Co., Boston, Mass. (Brief.) Mr. Otto Ruhl, representing zinc-ore producers ; address, Joplin, Mo. Mr. F. W. Wallower, representing the Golden Rod Mining & Smelting Cor- poration, Joplin, Mo. Mr. Charles T. Orr, representing the Athletic Mining & Smelting Co., Webb City, Mo. Hon. Henry L. Myers, United States Senator from Montana, representing western zinc producers. Hearings : Pages 2067-2075. Witness : Mr. E. H. Wolff, representing the American Zinc Insti- tute. Costs and selling prices. Germany can produce slab zinc for 2 cents per pound. Belgian costs are a little higher because of higher wage and fuel scale. A Xew Tasmania installation will, two years hence, produce 100 tons daily at a cost of 4 cents per pound. Domestic wages are three to six times those abroad and to-day production costs are more than the price of the metal. Six and one- half cents per pound, exclusive of depreciation or profit, is the lowest domestic cost probable. Fuel and freight play an important part in domestic production costs and both of these items are far above the prewar scale. During the war domestic labor was placed on the 8-hour basis instead of 12 a change adding 30 to 35 per cent to the cost of production. During the last months of 1920 foreign zinc was landed at New York, duty paid, for 4J cents per pound. Size of industry. The domestic smelting capacity is 650,000 tons of slab zinc per annum. Production in July, 1921, was at the rate of 186,000 tons per year and stocks of metal on hand were sufficient to supply present needs for six or seven months. Geological Survey reports show one-half the production in 1921 as compared with the same period in 1920. During the first six months of 1921 imports amounted to 7,405 tons; exports, 2.255 tons; consumption, 83,865 tons. During the first six months of 1920 imports were nil ; exports, 70,000 to 90,000 tons ; consumption, 160,000 to 175,000 tons. Imports were growing until political disturbances in Europe cut off sources of supply. The domestic productive capacity doubled during the period 1914- 1916 and there are now 47 smelters located in nine States. The new mining districts of the Missouri, Kansas, Oklahoma field are the richest in the world. Rates suggested. The witness proposes the following schedule of rates on zinc and zinc products : Zinc ore containing up to 10 per cent, free. Zinc ore containing 10 to 25 per cent zinc, Ij cents per pound of zinc. DIGEST OF TARIFF HEARINGS, H. R. 7456. 243 Zinc ore containing above 25 per cent zinc, 2 cents per pound of zinc. Zinc dust, 3f cents per pound. Slab zinc, 2J cents per pound. Sheets, plain and coated, 3J cents per pound. Old zinc, 2J cents per pound. Zinc oxide containing less than 25 per cent lead, 2f cents per pound. The witness points out that in the lead schedule manufactures of lead are dutiable at higher rates than the metal, while in the pro- posed bill the compounds of zinc, such as the chloride, sulphate, and sulfide, are dutiable at the same or even lower rates than the metal. The bill as passed by the House provides for a temporary rate on zinc metal of 2 cents per pound. The witness requests that this be made permanent, as otherwise the ore producers will derive no benefit from the higher permanent rate provided on ore. In other words, equitable rates must be provided on all products of zinc ore or the schedule will fail to protect the miners. He requests that zinc oxide be considered with zinc metal in Schedule III. Hearings : Pages 2075-2079. Brief by William A. Ogg, American Zinc. Lead & Smelting Co. Costs and selling prices. Since 1914 increases in freight rates (now double prewar) have added considerably to costs. Taking 1 ton of Joplin concentrate as containing 1,000 pounds of recoverable zinc, increases in freight on this ore to smelters and of the metal to New York add 0.55 cent per pound to cost. Mining costs in the United States have increased from 50 to 100 per cent during and since the war and smelting costs have more than doubled. Costs may be decreased, but the prewar scale is gone for good. The development of electrolytic processes in foreign countries pre- viously handicaped by a lack of cheap fuel introduces large tonnages of low-cost zinc into" the world market. The exchange situation is another factor contributing to low foreign costs. German prewar costs were 80 per cent of American. Labor rates there to-day are one-fifth the American rate and costs probably one- third. As compared with an American cost of 6.6 cents per pound, German costs would thus be 2.2 cents per pound. This extreme difference is. however, not likely to be permanent. Zinc has recently been purchased in Europe for 4.6 cents per pound, or 2 cents below American costs plus freight to New York. Tasmanian costs (electrolytic production) will approximate 2.92 cents per pound with exchange at $3.50, or 4.06 cents with sterling at par. These costs are f. o. b. London or New York. Present and probable domestic costs. Present. Probable. Mini- mum. Cost of ore (60 per cent concentrate) per ton of 2,000 pounds $30.00 6.00 ! $30.00 6.00 $30.00 6.00 25.00 1 20.00 15.00 Total 61.00 i 56.00 51.00 .061 .056 .051 Freight to New York .005 .005 .005 Cost f. o. b. New York. 244 DIGEST OF TARIFF HEARINGS, H. R. 7456. The ore costs given are below domestic mining costs. Size of industry. The domestic smelting capacity was increased by 29,692 retorts during the war period and a large electrolytic plant has been erected. The European smelting capacity has been in- creased and the surplus will be obliged to seek new markets. Rates suggested. Specific duties on zinc ore, metal, and products. Comparing costs in the United States with those obtainable in Tas- mania, it will require a duty of 3 cents per pound to maintain the domestic industry on a prosperous basis. Hearings : Pages 2079-2086. Witness: Mr. Otto Ruhl. Costs and selling prices. During 1919 and 1920 the average value of 35 per cent ore laid down at points along the Rio Grande was $12 a ton. This ore contained 700 pounds of metal, while the Missouri concentrate contains 1,200 pounds. It requires, therefore, 1.7 tons of Mexican ore to yield the equivalent of 1 ton of Missouri concen- trates, resulting in a value of $20.40. The freight on this 1.7 tons of foreign ore on the Mexican border to Oklahoma smelters would be $11.72, or $6.90 per ton of ore, making a total cost of $32.13. During 1919 the average cost in the Missouri-Oklahoma field for 11 groups of properties, producing 92,000 tons of concentrates, was $47.50 a ton. Allowing for profit, freight rates to smelters, and other charges, the cost of Joplin ore becomes $57.17, or a difference be- tween the two products, having the same metal content, of $25 per ton, or approximately 2 cents per pound. Size of industry. The Missouri-Oklahoma-Kansas zinc district supplies approximately 40 per cent of the zinc-ore production in the United States. This production has dependent upon it a population of 150,000 to 200,000 persons. At the present time production is much depressed, this condition starting about a year earlier than that in other industries following the war. Rates suggested. In view of the difference in cost discussed above, the witness proposes the following changes: Zinc-bearing ores con- taining less than 10 per cent metallic zinc, free; ores containing 10 to 25 per cent metallic zinc, 1^ cents per pound ; zinc content, 25 per cent zinc or over, 2 cents per pound metallic content; zinc metal, blocks, pigs, or slabs, and worn-out zinc, 2f cents per pound; zinc oxide (schedule 1, par. 74) and white pigment containing zinc and not containing lead, 2f cents per pound ; zinc sheets, strips, coils, and other products, 3f cents per pound. Remarks. In the witness's brief, beginning on page 2081, are tables showing increases in cost on all supplies entering into the mining of zinc, monthly prices of zinc ore over a period of 24 years, imports from 1914 to 1918, and wage-scale comparisons between present Mexican wages and the prewar and present Missouri-Okla- homa wage. There is also a table showing the itemized cost in the 11 properties mentioned by the witness. Hearings : Pages 2086-2087. Witness : Mr. F. W. Wallower, representing the Golden Rod Min- ing & Smelting Corporation. Costs and selling prices. Mexican competition has so affected the Missouri zinc district that of 87 mills formerly in operation none are left at the present time. Several years ago there were 200 mills DIGEST OF TARIFF HEARINGS, H. R. 7456. 245 operating m the Oklahoma fields; to-day there are 25. Formerly 12,000 men were employed ; to-day there are 2,000. Rates suggested. Two cents a pound on ore: other rates as sug- gested by Mr. Ruhl. Hearings : Page 2087. Witness : Mr. C. T. Orr. representing the Athletic Mining & Smelting Co. Costs and setting prices. The lead contained in some Missouri ores is the only factor permitting operation of the mines at the pres- ent time. The lead recovered increases the value of the ore and so permits operation in the larger mines. The purely zinc mines are almost out of business. Rates suggested. Two cents a pound on ore and rates on other products as requested by other witnesses. Hearings : Pages 2087, 2088. Witness: Hon. H. L. Myers, representing western zinc producers. Costs and selling prices. Witness asserts that costs run 2J cents per pound in the West, but the balance of his testimony on this para- graph tends to the implication that he regards domestic costs on zinc metal as being 2^ cents above foreign costs. Size of industry. Western zinc producers are in a bad way and most mines are shut down. Rates suggested. Would be satisfied with rates proposed by the witnesses representing other producers. PARAGRAPH 390; ALSO PARAGRAPHS 302, 386, AND 389; ALSO PARA- GRAPH 47 OF SCHEDULE 1 AND PARAGRAPH 207 or SCHEDULE 2. PRODUCTS ENTERING INTO THE MANUFACTURE OF STEEL. WITNESS, AND INTERESTS REPRESENTED. FAVORING LOWER DUTIES : Mr. John A. Topping, chairman of the board of directors of the Republic Iron & Steel Co., representing 15 independent steel companies, producing about one-half of the steel output of the United States; address, New York City. Hearings: Pages 1710-1739. Costs and selling prices. The raw materials entering into steel manufacture, such as ferromanganese, ferrosilicon, tin, zinc, etc., add materially to its cost. The proposed increase in taxes on these ma- terials, as proposed in the Fordney bill, would add $23,800.000 per annum to the cost of steel, this amount being distributed as follows : Raw material. Annual re- quirements. Pro- posed tax. Tax per annum. Tons. W 000 Per ton. $37 05 $2 964 000 00 300,000 5.00 i .'(MI o<>o. (X) Manganese ore, 48 per cent 750,000 150 000 10. 75 10.00 8,062,500.00 1 500 000 00 Pounds. 61,949,922 Ptr Ib. .02 1,23S,998.00 Zinc (first two years) 426,986,416 .02 8, 539. 72S. 00 Total 23 805 226 00 22- -17 246 DIGEST OF TARIFF HEARINGS, H. R. "7456. The labor cost in the manufacture of steel is greater in the United States than in the principal competing countries of Europe Bel- gium, England, and Germany. In Germany, based upon returns from 20 different cities, published by the Kiel Institute of World Economics, the labor cost in the production of steel has materially declined. A machinist \vhp earned in 1914 $1.49 per day in gold earns to-day only 41 cents in terms of gold. This comparison does not take into account the difference between the international gold exchange value of the mark and its lowest purchasing power, due to the governmental regulation of prices, which has given the mark an unnatural buying power in excess of its international exchange value. A very moderate estimate of the real purchasing power of the ma- chinist's daily wages would make the 41 cents per daV equivalent to about $1.23 per day. In the United States wage rates are about 52 per cent higher than in 1914, yet in the steel industry as a whole the wages of labor have probably been more thoroughly liquidated than those affecting any other group of large employers. When the act of 1909 was put into effect the rate of wages paid by American steel producers and all other employers was about 52 per cent lower than it is to-day. The freight costs for assembling raw material to-day are 100 per cent more than they were in 1914. Thus, for a ton of crude pig iron the freight charges alone amount to about $10.50, as against about $5 in 1909. In addition to other costs, the freight charges on the finished steel product shipped to points along the coast add materially to the do- mestic selling price as against the price of the foreign product. For example, the cost of steel sheet and structural shapes laid down in New York is $2.23 a hundred ; the German price at the same point, including freight and insurance but exclusive of the duty, is $1.47. The higher price of the American product in New York is partly due to a freight rate from Pittsburgh to New York of $7.60 per ton. The steel producers of the United States are satisfied with the rates, with a few slight exceptions, on steel products in the Fordney bill, provided the rates on raw material, such as ferrosilicon, ferroman- ganese, etc., are not so high as to increase materially the cost of pro- ducing finished steel. Size oj industry. The United States census report for 1914 credits the steel industry with a capital investment of nearly $4,300,000,000, an annual pay roll of over $723,000.000, and a total value of products of $3,223,000,000. Since 19 .4, under the stimulus of war de- mand, the steel-ingot capacity of this country was increased from 40,000,000 tons to 55,000,000 tons, an increase" of about 37 per cent. The total number of steel employees under full operation would closely approximate 1,500,000 persons, with an annual pay roll close to $1,000,000.000 based upon 1914 wage rates and approximately $1,500.000.000 based upon present wage rates. The witness strongly opposed the duties embodied in schedule 1, paragraph 47; schedule 2, paragraph 207; and schedule 3, paragraphs 302, 386, 389. and 390. With regard to the first, he held that no duty on fluorspar is neces- sary for an industry protected by the freight charges from the coast to inland points. As to the second, the magnesite industry had flourished under free trade. With respect to manganese, paragraph 302 of schedule 3, it would be difficult to justify any duty whatsoever, seeing that there is no real market for the domestic lean and high DIGEST OF TARIFF HEARINGS, H. R. 7456. 247 silicon manganese ores when the richer foreign products of Brazil, India, and Russia are available. Ferromanganese is a blast-furnace product like pig iron, and is entitled to a duty relative to pig iron, or about three and one-half times the rate imposed upon pig iron; this would be about $4.25 per ton instead of the proposed rate of $39.42 per ton. The witness also protested against the duties on ferro- silicon. There can be no justification for an increased import tax on pig tin, lead, and zinc from a protective-tariff standpoint at least. In the opinion of the witness, a reduction of rates of duty on the raw materials mentioned is more desirable than an increasa in the rates on finished steel products, because there is a surplus product of finished steel, which is ordinarily exported. This export product comes into competition with foreign steel, and it is therefore desir- able to reduce costs of production in the United States as much as possible. Besides, this export product is an important factor in keep- ing labor employed in the United States. PARAGRAPH 393. HAIR CLIPPERS. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES: Mr. Charles F. Wiebusch, representing manufacturers of hair clippers. FAVORING LOWER DUTIES : Adolph Kastor & Bros. (Brief.) Hearings : Pages 1941-1945. Witness : Mr. C. F. Wiebusch, representing manufacturers of hair clippers. Costs and selling prices. During the past 12 months, thousands of pairs of clippers, sold at ruinously low prices, have flooded this market from Germany, estimated at several hundred thousand pairs in all. The goods are on the shelves of practically every jobber and retailer of this class of goods in the country. Clippers are offered by German manufacturers at prices which, even with 35 per cent duty added, are considerably less than the cost of production of cor- responding American models. Size of industry. The hair-clipper industry, while not one of the large industries of the country, nevertheless is important. Rates suggested. Under schedule 3, paragraph 357, before the word "Provided" there should be inserted "hair clippers, 25 cents each and 35 per cent ad valorem." The rate of 35 per cent under paragraph 393, even if based on the American valuation plan, affords an entirely inadequate protection under existing conditions. Hearings: Pages 1928-1929. Brief : Adolph Kastor & Bros. Costs and selling prices. The following are prices of German clippers and comparative American clippers ; No. 1 clipper, 28 cents American, 55 cents; No. 0, 32 cents American, 80 cents; No. 00, 37 cents American, 90 cents. Applying the requested tariff of 25 cents each and 35 per cent ad valorem, the following would be the prices of the German articles : No. 1 clipper, 72 cents ; No. 0, 85 cents ; No. 00, 93 cents. Applying the rate under paragraph 393 of 35 per cent 248 DIGEST OF TARIFF HEARINGS, H. R. 7456. ad valorem, the following would be the prices of the German articles : No. 1 clipper, 47 cents ; No. 0, 60 cents ; No. 00, 69 cents. Rates suggested. It is earnestly urged that hair clippers and toilet clippers be classified under the basket clause forming para- graph 393 of the Fordney bill. The specific duty of 25 cents per piece, plus 35 per cent ad valorem, would be prohibitive and act as an embargo, whereas an ad valorem duty of 35 per cent under para- graph 393 would afford domestic manufacturers ample protection without strangling importation. Remarks. A letter, dated September 19, 1921, from Wiebusch & Hilger (Ltd.), hardware and cutlery, New York City, to the chair- man of the Senate Committee on Finance, in behalf of themselves and three manufacturing firms, refers to the brief summarized above. It is submitted that the Kastor calculations are based on prices of American makers whose clippers do not compare in quality with the product of the four leading American manufacturers, nor even with the quality of German clippers. The letter takes issue with the assertion that a specific duty on these goods is unnecessary for the protection of American manufacturers. In a separate and supplementary letter, dated September 21, 1921, from the American Shearer Manufacturing Co., of Nashua, N. H., one of the firms represented in the cited letter, exception is taken to the Kastor claimi that hair and toilet clippers should not be classi- fied as cutlery. Asa matter of fact, the material used in their manu- facture is of higher grade than that employed in scissors, shears, etc., and the goods involve the employment of a large proportion of skilled mechanics. As the original producers of hair clippers in the United States the firm stigmatizes the Kastor brief as an attack on an old American industry. Complaint is made, as in the group letter, that the comparative American prices, cited in the brief, are fallacious. " The Kastor brief is in substance an argument against the American valuation plan." PARAGRAPH 393. MINERS' SAFETY LAMPS AND OXYGEN BREATHING APPARATUS. FAVORING PROPOSED OR HIGHER DUTIES : The Mine Safety Appliances Co., Pittsburgh, Pa. (Brief; no appearance at hearings. ) Size of industry. The manufacture of flame safety lamps, electric safety cap lamps, and self-contained oxygen breathing apparatus commonly termed " mine apparatus," in the United States is prac- tically a war-time development. Prior to the war all flame safety lamps were imported, as at that time no manufacturer would make up the necessary equipment for their manufacture in this country. On account of the necessity of the mining industry there w T as good and sufficient reason for keeping them on the free list. During the war, the supply 'being cut off from Germany, it became necessary to build these lamps in this country, and several kinds of electric safety cap lamps for mining use are now manufactured here. These are real safety devices, in- stalled in the gaseous mines of this country during the past five DIGEST OF TARIFF HEARINGS, H. R. 7456. 249 years to the number of over 200,000, with the result of practically eliminating mine disasters arising from gas and dust explosions. Before the entry of the United States into the war all self-con- tained oxygen breathing apparatus was imported from Germany or England, 90 per cent coming from the Draeger Co., Lubeck, Germany. The first orders for breathing apparatus for the Ameri- can Army were for the Fleuss Proto, made by Siebe, Gorman & Co., in London. This order, placed in October, 1917, was not executed in time to reach the American Expeditionary Forces before the sign- ing of the armistice. The American company, however, when finally authorized by the Government to build 200 sets of Gibbs apparatus, made delivery within 90 days. This form of apparatus, developed by engineers of the Bureau of Mines at a cost of many thousands of dollars, was man- ufactured under license from the United States Government. The apparatus was made not only during the war but has since been in- troduced throughout the mining regions of this country and Canada, replacing both German and English equipment. Compaa'dbility. There are now two standard makes of flame safety lamps, one made by the Koehler Manufacturing Co., of Marl- boro. v Mass., and the other by the Wolf Safety Lamp Co. of America, Brooklyn, X. Y. Both of these lamps are more serviceable and prac- tical than any foreign lamp developed prior to the advent of the American industry, and they have the approval of the United States Bureau of Mines. There is no foreign oxygen breathing apparatus that satisfactorily meets the specifications laid down by the Gov- ernment in connection with their tests for equipment of this char- acter. Rates suggested. Since the Bureau of Mines has no authority to enforce the use of standard approved mine safety equipment, a pro- tective tariff would be a means of safeguarding the American mining industry. Kern-arks. As none of the foreign flame safety lamps have been ap- proved by the Bureau of Mines, there is no good reason why such equipment should remain on the free list, thus allowing inferior, un- approved safety lamps to come in competition with American lamps. There are several electric safety cap lamps manufactured in this country, but the principal one is that perfected by the Edison Stor- age Battery Co.. of Orange, N. J., in 1914, and approved for gen- eral mining use by the Bureau of Mines early in 1915. Inferior elec- tric safety cap lamps can readily be imported from Germany and sold in competition with the higher priced domestic lamps. PARAGRAPH 393. SPRING CI>OTHESPINS. WITNESSES. FAVORING PROPOSED OR HIGHER DUTIES : The Demeritt Co., Waterhury, Vt.. and the U. S. Clothespin Co., Mont- pelier, Vt. (Joint brief; no appearance at hearings.) Costs and selling prices. The selling price of 40. cents per gross for domestic pins does not represent the cost of manufacture,^ as the price has been reduced in an effort to compete with recent German importations. 250 DIGEST OF TARIFF HEARINGS, H. R. 7456. Size of industry. There are six manufacturers of spring clothes- pins in the United States. The two joining in the present statement have a combined output of about $185,000 per 'year, and employ 85 people at an average daily wage of $3 to $4. Comparability. Two years ago German clothespins were being sold in Sweden at 6 marks per gross. The lowest price at which spring clothespins are now being sold in the United States is 40 cents per gross and, assuming that the German price has been advanced to 8 marks per dozen, a duty of 35 per cent ad valorem would permit their sale in New York at 20 cents per gross, plus freight and selling expense. This is confirmed by a quotation of 30 cents per gross by importers. Before the war, spring clothespins were imported in large quantities from Germany, Xorway, and Sweden, and were sold at from 18 to 21 cents per gross one-third less than the domestic cost. Rates suggested. Spring clothespins made from wood and wire to be specifically mentioned, and made dutiable at 60 per cent ad valorem. PARAGRAPH 393. TWIST DRILLS. REQUESTING RECLASSIFICATION : H. Boker & Co., New York City, importers. (Brief; no appearance at hearings. ) Size of industry. About 23 American manufacturers are pro- ducing twist drills, the output in the year 1920 being approximately $40,000,000. Exports of domestic twist drills have for many years been a very large item. Comparability. British 1-inch taper-shank twist drills are now quoted in Liverpool at $3.10. An Amercian drill of the same type is sold at $4.50. Under the proposed tariff, the duty on the British product would be $1.58 ; landing charges, $0.16, and selling expenses, $1.09. would bring up the total landed cost to $5.44. without the importer's profit. The cost of French, Swedish, and German drills has been found to be much higher than that of British-made goods. Rates suggested. Twist drills to be taken out of the " basket " paragraph, and placed in paragraph 340, with saws, dutiable at 15 per cent ad valorem. VARIOUS PARAGRAPHS (AS BELOW). ORE AXD METAL PRODUCTS. WITNESS. AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Herbert W. Smith, representing the American Mining Congress; address, Washington, D. C. Hearings. Pages 1607-1614. RATES SUGGESTED. Par. 1. Arsenic. Recommends specific rate of from 3 to 5 cents per pound in place of the ad valorem rate proposed. Par. 64. Barytes. Approves rate proposed by Hon. M. E. Rhodes. Par. 1523. Bismuth. Suggests 25 cents per pound to give smelters an incentive to save it and thus conserve the country's resources. DIGEST OF TARIFF HEARINGS, H. R. 7456. 251 Par. 1539. Cadmium. Suggests 25 cents per pound for same reason. Par. 211. Graphite. Approves rates proposed by Mr. Weed. Par. 389. Lead. Electric storage batteries and plates, paragraph 320, are largely manufactured of lead; manufacturers desire 40 per cent duty to bring this product into line with other lead manu- factures. Par. 302. Manganese ore reserves and productive capacity are adequate, in witness's opinion. One ton ferromanganese requires 2^ tons ore. The prewar cost was $30 to $40 per ton ; present cost is $65. Par. 47. Magnesite. Wage rates in Austria are less than the male base rate of $1 per day, because of women employed. Par. 383. Quicksilver. A slight adjustment is necessary to cor- respond to rate on mercury compounds in schedule 1. Par. 391. Zinc. Desires changes as recommended by Mr. Ruhl and other witnesses, making the temporary provision permanent. Pars. 286 and 1670. Tin. Tin smelters in the United States use Bolivian ore and compete against foreign metal. The industry asks for a duty of 5 cents per pound on tin ore ajid 10 cents per pound on the metal. Witness suggests 4 cents rate on metal, with ore free. Par. 374. Aluminum. In view of new aluminum developments on the Pacific, the witness recommends an increase in duty on aluminum to 7 cents per pound on block or pig and 11 cents on sheet. The proposed rates of 5 cents and 9 cents, respectively, are the minimum. SCHEDULE 4. WOOD AND MANUFACTURES OF. PARAGRAPH 402. LOGS, FIR, SPRUCE, CEDAR, AXD HEMLOCK. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES: Mr. W. D. B. Dodson, representing Columbia River Loggers' Information Bureau, Portland, Me. (Brief.) Hearings : Pages 2103-2106. Size of industry. There are 32 shingle mills in the Columbia River district which are absolutely dependent upon independent loggers for their raw material. The flooding of the American market with Canadian shingles would close down these mills and would result in the accumulation and waste of cut cedar in the entire area. This would throw hundreds of men out of employment, and make it neces- sary for the fir product of the logging camps to carry the burden of loss and waste in cedar cut. The same condition would prevail in the Puget Sound and Gray Harbor districts. At present, one Cana- dian operator is selling rafts of cedar logs in Puget Sound. In the Columbia Eiver district alone, in western Oregon, there are to-day 48 independent logging operators. A table showing the number of feet of timber and the names -of the owners, in western and eastern Oregon, will be found on page 2106. Rates suggested. A protective tariff is desired as being the only means to protect the American shingle market. While a mere anti- dumping act would not be a sufficient protection against the Cana- dian product, it is proper to notice that the Canadian Parliament, 252 DIGEST OF TARIFF HEARINGS, H. R. 7456. by act of 1907, has protected the Canadian Provinces against dump- ing into Canada by foreign countries. Tariff protection against Canadian competition is needed. Cheap product from a foreign country, if not met by a tariff, will kill the American wood industry. Remarks. At present there are no logging camps on the Columbia River nearer than 9 miles to the booming grounds. In the State of Washington, where the lumber industry has been more active for a long period of time, the logging camps are still farther remote from tidewater. In British Columbia, where the logging industry is of more recent undertaking, there is much timber directly on tidewater, and also a far greater amount on short rail hauls to booms. This short haul gives Canada a far greater advantage on the original cost of input of the logs into the water. The navigable waters reach far inland, which will give them a very great advantage over a long period. Canadian labor is another advantage, orientals being em- ployed on a 9-hour and, in some instances, on a 10-hour schedule, whereas American labor works only 8 hours, at far better pay. PARAGRAPH 402. PULP WOOD. * WITNESSES. REQUESTING MODIFICATION : Paper pulp manufacturers of Pennsylvania. (Brief; no appearance at hearings. ) Remarks. These manufacturers, believing the intent of para- graph 402 of Schedule 4 to be to protect pulp wood, regard its present form as tending in the opposite direction. As the paragraph is written, it might invite Canada to impose an export duty on logs cut from freehold lands, in which case the duty imposed by the para- graph would immediately apply. This would play into the hands of those who would restrict the exportation of wood from such lands or impose an export duty on such woods. It is asked, in order to leave pulp wood on the free list beyond all doubt, that the words " other than pulp wood " be inserted after the word " hemlock " in line 18, page 77 of the bill. PARAGRAPH 404. LOGS, MAHOGANY, AND OTHER HARDWOOD. WITNESSES, AND INTERESTS REPRESENTED. FAVORING LOWER DUTIES : Mr. Joseph S,. Auerbach, representing the Mahogany Association of the United States. The Mahogany Association of America, and 50 others. (Brief.) Mr. Thomas Williams, representing the Mahogany Association of the United States and Ichabod T. Williams & Sons. Mr. Reuben Arkush, representing Williard Hawes & Co., New York City. Mr. Frank G. Otis, representing Otis Manufacturing Co., New Orleans, La. Palmer & Parker Co., importers and manufacturers of mahogany, Boston, Mass. (Brief.) The Rica Veneer & Lumber Co., Grand Rapids, Mich. (Brief.) The Henry H. Sheip Manufacturing Co., Philadelphia, Pa. (Brief.) Hearings : Pages 2106-2107. Witness: Mr. Joseph S. Auerbach, representing the Mahogany Association of the United States. DIGEST OF TARIFF HEARINGS, H. R. 7456. 253 Kates suggested. The proposed duty of 10 per cent on mahogany and other hardwood logs, and 15 per cent duty on manufactured lumber, will give only a negligible return to the Government. The expense of handling, measurements, etc., will, as at present, be largely in excess of this duty. Accordingly, a uniform governmental policy, time out of mind, to let in free of duty raw materials not produced or producible here and impose reasonable protection upon the manufactured article, is wholly departed from without benefit to the Government and with distinct disadvantage to the importer and manufacturer. Other witnesses would show that the burden would amount to a great deal more than the 10 per cent ad valorem duty. Witnesses: The Mahogany Association of America, and 50 others. (Brief submitted in 24-page pamphlet form to the Senate Com- mittee on Finance by Davies, Auerbach, and Cornell, counsel for objectors.) It is stated that paragraph 404 of H. R. 7456 represents a radical departure from a uniform governmental policy in tariff legislation the policy of keeping on the free list raw material not produced or producible in this country, and imposing a duty upon the manu- factured article only. The parties now presenting their views in opposition to this new departure ask only that mahogany and other tropical hardwood logs be permitted to remain on the free list. Xo gain will accrue to the Government from the proposed duty r as the additional cost of measuring, handling, and so forth, would greatly exceed the $450,000 gross derivable from the duty. Other portions of the pamphlet discuss in detail the potential conditions entailed by a duty, as affecting landing costs, the manu- facturers concerned, steamship and other transportation companies, and American labor. Under all these heads, detrimental results are to be looked for and even more far-reaching injury will be inflicted upon American export trade. Manufacturing interests would have to surrender for a long time any hope of continuing that trade. It is suggested that instead of adding new burdens to industry at a time of general business depression, the success of business should be pro- moted by legislation where needed to that end. The closing 16 pages of the pamphlet are taken up by a transcript of minutes of hearings before the Senate Committee on Finance, August 27, 1921. at which several of the recorded objectors testified in the spirit of the brief. Hearings : Pages 2108-2112. Witness : Mr. Thomas Williams, representing the Mahogany Asso- ciation of the United States and Ichabod T. Williams & Sons. Size of industry. Probably $25,000.000 has been invested in the manufacturing of hardwoods and in the establishment of agencies in the Tropics for production. Rates suggested. The witness opposes the proposed import duty upon mahogany and other hardwoods. Logs of tropical hardwoods are imported from Africa, Central America, and Mexico, almost ex- clusively on American bottoms, and are imported practically ex- clusively by American manufacturers and importers. The business represents a great many steamers. The imposition of the proposed tax would divert the importation of mahogany logs to foreign coun- tries, and would lead to the manufacturing of such logs into lumber 254 DIGEST OF TARIFF HEARINGS, H. R. 7456. and veneers in foreign countries for ultimate importation into the United States by foreign interests. This duty on raw material would injure the* American mechanic and would affect hundreds of thousands of men. In 1920 the importations of mahogany and cedar logs into America was about 50,000,000 feet, representing approxi- mately a value of $4,500,000. Hearings: Pages 2112-2114. Witness: Mr. Reuben Arkush, representing Williard Hawes & Co., New York City. Size of industry. Mills for converting the logs into lumber and veneers are established in New York and vicinity, Philadelphia. Baltimore, Louisville. Xew Orleans, Mobile. Cincinnati, Cleveland, Indianapolis, and in all the important Middle West cites. Rates suggested. The witness protests against the proposed duty on rough mahogany and cedar logs, and other rough cabinet woods. Millions of dollars are invested in American mills for converting logs into lumber and veneers. To impose a duty on these logs will only encourage the building of mills in Mexico, Cuba, and other places of production. As none of these woods grow in this country, a duty is not required for protection. Importation of these hard- woods has been encouraged to protect the diminishing supply of do- mestic hardwoods. The 10 per cent duty, plus the additional cost by reason of delaj-s and rehandling, would considerably enhance the price of mahogany and cedar lumber to the manufacturer, which would be reflected" in the cost of furniture to the consumer. The witness sees no benefit in the proposed tax and only a great handi- cap to the industry. Hearings: Pages 2114-2117. Witness: Mr. Frank G. Otis, representing Otis Manufacturing Co., Xew Orleans. La. Costs and selling prices. The price paid for 1,000 feet of ma- hogany lumber, in the log, varies from $80 to $100, and the cost of freight amounts to about $40 or $50. The average selling price on the company's log run is about $160 to $170. The average net profit on sales is about 10 per cent. Size of industry. There are about 10 mills, representing an in- vested capital of approximately $20.000,000. The sawing of the logs is an important item in the manufacture, and requires the employ- ment of thousands of laborers. Rates suggested. The company is opposed to the proposed duty, thinking that no benefit will be derived therefrom. A brief sub- mitted by 50 leading importers and manufacturers includes a table of expenses (see p. 2116) which will necessarily result from the duty. The total expense is given as $10,925.05, against which the amount of duty collected would not exceed $5,000, showing a serious and direct loss to American shipping and to the importer and subsequent manu- facturer. It is urged that the present provision of the Payne- Aldrich tariff bill be left undisturbed. Witness: Palmer & Parker Co., importers and manufacturers of mahogany. (Brief: no appearance at hearings.) Remarks. The firm strenuously opposes any duty on logs, such as mahogany, cedar, etc. The firm has been in business since 1833 and has never paid duty on logs. It approves of a duty on lumber. DIGEST OF TARIFF HEARINGS, H. R. 7456. 255 The effect of the 15 per cent duty proposed in H. R. 7456 would be that foreigners would start up mills and no mahogany would be sawed in this country. As a means of meeting the competition thus set up with the aid of cheap labor, and in order to conserve capital invested in west Africa, it might become necessary for the firm to erect a mill in that country. Witness: The Rice Veneer & Lumber Co., Grand Rapids, Mich. (Brief; no appearance at hearings.) Remarks. The brief is a protest against the proposed duty on mahogany and cedar logs. These materials are not produced in this country, but mills for their manufacture have been erected, includ- ing a neAv one for the company. The proposed duty would put these mills out of commission and deprive many persons of employment. The sawing would be done at the ports of export. Other points made are the disproportionate cost of measuring and handling at the ports of entry, and the inroad which would be made upon the domestic supply of hardwood, already greatly depleted. Witness : The Henry H. Sheip Manufacturing Co., Philadelphia, Pa. (Brief; no appearance at hearings.) Remarks. The firm not at present in the cedar business, but handling other tropical hardwoods, refers to the insistent cry to save the redwood forests. The proposed imposition of a 10 per cent duty on Spanish cedar logs will kill cedar imports, just when there is a tendency to revert to that wood for cigar boxes, after having been too expensive during the war. With such duty, California redwoods will go on being cut down for cigar boxes. PARAGRAPH 405. POLES, CEDAR. WITNESS, AND INTEREST REPRESENTED. FAVORING LOWER DUTIES: Mr. T. M. Lane, attorney, representing the cedar pole industry. Hearings: Pages 2117-2130. Costs and selling prices. Poles are generally sold in America at price delivered at destination and, naturally, selling prices in the United States are as varied as the points of delivery. Size of industry. The annual consumption in the United States is estimated at from 3.500,000 to 5,000,000 poles, 95 per cent of which are cut from domestic forests. About 5 per cent of the poles are imported. Rates suggested. The witness submitted a brief requesting that ad valorem classification of cedar poles be abolished, and that they be given the same treatment as the other round timber in the act. All other round timber is either free or dutiable at a specific rate, poles being the only exception. It is suggested that cedar poles be placed in the same classification as poles used for telegraph wire, under paragraph 401. The industry would be satisfied with a specific duty, but urges that poles be put on the free list instead of dutiable at iO per cent upon American valuation. Changes are also suggested in paragraphs 401, 402. 405. and 1683. (See page 2129.) Remarks. It takes 150 years to grow a 30-foot pole in Michigan and from 75 to 100 years to grow the same pole in the northwestern 256 DIGEST OF TARIFF HEARINGS, H. R. 7456. part of the United States. At the present rate of consumption the supply will be exhausted within this generation. There is a great scarcity of poles in the United States. Poles are a cheap commodity on which freight is relatively high. PARAGRAPH 408. SHINGLES, CEDAR. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. George A. Bergstrom, representing the Pacific Timber Co., Everett, Wash. Mr. E. E. Case, Raymond, Wash., representing himself as manufacturer. Mr. W. C. McMasters, representing the McMasters Shingle Co., Ken more, Wash. Hearings : Pages 2130-2135. "Witness: Mr. George A. Bergstrom, representing the Pacific Timber Co., Everett, Wash. Costs and selling prices: The* witness states that at the time of closing the company's mill the price of the average cedar log of Brit- ish Columbia mills was $16 per thousand delivered at the mill, while the American cost was $18 base, or an average of $19. This makes the operation of the American mills impossible under existing con- ditions, as it practically involves a differential of $3 per thousand in favor of British Columbia mills for the raw material. The selling price of shingles is $2.60 on ordinary clears. With 30 per cent labor, about 20 per cent overhead, and about 50 per cent raw material, no profit is left. Size of industry. The company has invested $200,000 in the in- dustry and employs 100 American" laborers. Comparability. Red cedar in the Province of British Columbia amounts to 125,000,000,000 feet as compared with 25,000,000.000 feet remaining in the State of Washington and 12,000,000,000 feet re- maining in the State of Oregon. White labor in Canada costs $3.60 for nine hours' work, or 40 cents per hour. Domestic wages are $3.60 for eight hours, or 45 cents per hour; other white labor in pro- portion. Rates suggested. The company favors the 50 cent per thousand rate on shingles proposed in H. R. 7456. Hearings: Pages 2135-2144. Witness: Mr. E. E. Case, representing himself, as manufacturer. Comparability. At least 50 per cent of the shingle mills in Ore- gon and Washington are shut down, while the Canadians have been running their mills at full capacity. About 80 per cent of all the shingles that British Columbia cuts is sent to the United States, while the American mills are closed and the railways idle. In 1920 the Oregon and Washington manufacturers utilized 700,000.000 feet of cedar logs, and 14,000,000 feet were imported from Canada. Can- ada has the advantage of cheap labor, and transportation facilities with cheaper rates. The Canadian mills have increased 300 or 400 per cent since the tariff on shingles was taken off. Kates suggested. The witness regards the request of 60 cents per 1,000 on shingles as very moderate. DIGEST OF TARIFF HEARINGS, H. R. 7456, 257 Remarks. The greatest detriment to the American shingle and cedar log industry is the lack of transportation facilities, coupled with high freight rates. High labor cost is another hindrance. Sub- stitutes have also been detrimental. Hearings : Pages 2144-2145. Witness: Mr. W. C. McMasters, representing the McMasters Shingle Co. Rates suggested. The company's concern took a referendum of Washington and Oregon shingle mills and found that the majority favor the 50 cents per 1,000 shingles as proposed in H. R. 7456. The witness has many letters on file, stating that the British Columbia mills are underselling the American. PARAGRAPH 411. REED AND RATTAN. WITNESSES, AND INTERESTS REPRESENTED. FAVORING LOWER DUTIES : Mr. Charles H. Demarest, representing the Rattan and Reed Importers' As- sociation. Mr. William S. Ferris, representing the Sidway Mercantile Co. Mr. Carl Gerdau, representing the Otto Gerdau Co. The S. A. Jacobson Co. (Inc.), importers and commission merchants, New York City. (Brief.) Hearings: Pages 2145-2149. Witness: Mr. Charles H. Demarest, representing the Rattan and Reed Importers' Association. Cost and selling prices. Reed and rattan, unmanufactured, sell in the market to-day at 9 cents per pound, and cost landed at New York approximately 7 cents per pound. In large quantities they sell at 7-| and 8 cents. The machine-made reed is used in the manufacture of chairs and sells from 25 to 35 cents and up to 60 cents per pound, and even higher for the smaller sizes. Size of industry. There are about 10 manufacturers in America who make the machine-made reed, mainly for their own use. Rates suggested. A brief filed by the witness points out that a duty of 20 per cent, based on the value of machine-cut reed of comparable size used by broom manufacturers, would make the duty 12 cents a pound on 7-cent reed, and therefore restrict manufacturers from using the material, In other words, there would be a 150 per cent duty assessed on reed, hand made. The industry wants a specific duty on the better qualities"and less than 20 per cent on the cost value. Reeds unmanufactured should stay on the free list. The witness sug- gests several changes in paragraphs 411 and 1683. A 10 per cent ad valorem, or a specific duty of 2 cents per pound, should be placed on rattan, which is also a raw material, and on the free list under the present and previous tariffs. Remarks. Crude hard-cut reeds are imported from China, mainly for use in brooms and baskets, the better selections for cheap chairs, furniture, etc. Machine-cut reed, imported from Germany and China, compares in value with machine-cut reed made in America, by a few American manufacturers only, mainly for their own use. 258 DIGEST OF TARIFF HEARINGS, H. R. 7456. Hearings : Pages 2149-2155. Witness: Mr. William S. Ferris, representing the Sidway Mer- cantile Co., Elkart, Ind. Costs and selling prices. China hand-cut reed is worth from 15 to 25 cents per pound. The price of Chinese reed is 20 cents per pound, and of American reed, 40 cents per pound. In April, 1921, the best grade of machine-cut reed, Chinese, was offered for 31 to 34 cents per pound, carrying charges to port of entry and duty paid. American machine-cut of the same grade was 40 cents per pound. Size of industry. There are about 10 American cutters of reed, 4r of whom are manufacturers of reed furniture ; 2 are large operators. The approximate investment in this industry is $3,000,000 and it employs about 600 operatives. There are 130 'manufacturers of reed products. The baby-carriage manufacturers have a capital invest- ment of about $15,000,000 and employ, under normal conditions, about 8,000 operatives. Therefore, upward of 100 manufacturers of furniture have an investment of about $40,000,000, and employ normally 27,000 operatives. The cost of labor varies with the class of work from 25 to 30 cents per hour. Rates suggested. The rate on rattan to be 10 per cent. If the rate is increased to 20 per cent, it will be to the advantage of the 10 American cutters of reed only ; the 130 manufacturers of reed prod- ucts would be placed at a distinct disadvantage and the additional amount would be taken from the profits or passed on to the consumer. Remarks. Reed is absolutely essential in the manufacture of baby carriages and reed furniture; no substitute material of equal value has been found. Xo other single item of material entering into the cost of baby carriages and reed furniture equals the value of the reed used. It is impracticable for a large number of concerns to cut reed in the United States, because of the limited market for the by- products, which represents at least 25 per cent of the rattan. Some conception of the profit may be obtained by consulting a table on page 2140. as part of a brief submitted by a great many concerns. A supplementary brief controverts the claims made by another witness that a satisfactory substitute for reed is being largely used by baby- cafriage manufacturers. Hearings : Pages 2155-2156. Witness : Mr. Carl Gerdau, representing the Otto Gerdau Co. Rates suggested. The present duty of 10 per cent on reeds and cane and the 20 per cent as proposed in H. R. 7456 are both too high. Both reeds and rattan should be placed oh the free list. The few large furniture manufacturers desire a tariff on reeds, because a tariff will aid their furniture business and keep thousands of the smaller competitors entirely without reeds or cane, or enable the former to sell to them at prices sufficiently high to make serious com- petition in furniture impossible. There is absolutely no reason to fear competition with Chinese handmade reeds, this being so in- ferior that it does not compete against American reed. This argu- ment is brought up only with the purpose of obtaining a monopoly of the reed-furniture industry through a tariff on reeds. By placing reeds on the free list the small wicker-ware manufacturers who do not cut their own reeds, and the few large manufacturers who cut their own reeds and cane, will be placed on a fair and equal basis. Remarks. In a brief dated August 6, 1921, the company discusses at length the origin of, and the manufacturing methods applied to, DIGEST OF TARIFF HEARINGS, H. R. 7456. 259 the material known as rattan " a long, flexible stick, growing only in the Far East." Reference is made to the leading American firms in this business, only one of which devotes itself exclusively to re moving the bark of the rattan, with the object of placing the bark and the core on the market for the thousands of smaller furniture, baby carriage, and basket manufacturers. It is alleged that the large manufacturers have always desired to put their many small competitors out of business by means of a prohibitive duty dn reeds and chair canes. In this connection the brief states that the proposed 20 per cent tariff would benefit only the half dozen large furniture manufacturers, employing only a few hundred in the cutting of the rattan. Prewar conditions are so changed that foreign competi- tion in reeds and canes is no longer to be feared. In these circum- stances American manufacturers can well afford to be content with no duty at all on these materials. Witness: S. A. Jacobson Co. (Inc.), importers and commission merchants, Xew York City. (Brief; no appearance at hearings.) Remarks. The brief protests against the application of the Ameri- can valuation plan to imports of reeds from Germany, France, Eng- lancl. and China. This, it is alleged, would bring about a prohibition of imports. There are six or eight American manufacturers of reeds, with different prices on the various sizes and qualities, so that a proper valuation by the customs authorities would be impossible. Not only so, but "a duty on that basis would penalize the thousands of users of reeds in this country. PARAGRAPH 411. RATTAN, REED, AND GRASS FURNITURE. WITNESSES, AND INTEBESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Fred W. Green, representing the Ypsilanti Reed Furniture Co. FAVORING LOWER DUTIES : Mr. E. F. Ganahl, representing the O'Connor-Harrison Co., importers and exporters. The Mentzer-Piagett Co., importers and brokers, Grand Rapids, Mich. (Brief.) Hearings : Pages 2161-2164. Witness: Mr. Fred W. Green, representing the Ypsilanti Reed Furniture Co. Costs and selling prices. The highest price ever paid for a ma- chine to cut reeds was $1,350. The cost of engaging in the manufac- turing of baby carriages is approximately $5,000. The labor cost of splitting rattan into reeds is between 5 and 6 cents per pound. . Rates suggested. The company is opposed to the 10 per cent duty on reed and to the new wording. " unmanufactured reeds." German and other importers became wealthy under the 10 per cent duty and collected large sums, which should have gone to the United States, through conflicting decisions on the " unmanufactured reed " ques- tion. The United States will lose vast sums of money if this phrase is put back in the tariff. The company does not think the 20 per cent rate prohibitive, having found by calculation, using the selling price of August 20, 1921, and the 20 per cent as basis, that in all instances the Chinese price was below the domestic for both handmade and machine-made reeds. 260 DIGEST OF TARIFF HEARINGS, H. R. 7456. Remarks. The difference between Chinese hand-cut reeds and machine-made reed lies, to a large extent, in the quality of rattan used by the Chinese. The Chinese method of making reed is crude and cheap, the material used of the cheapest, which results in such a large waste that it would not pay to bring it to the United States. American manufacturers have had to import a good quality of rat- tan, out of which they could not only get reed, but also the outer part of the cane. " Fiber," used to a great extent in making baby carriages, is made of twisted paper. When finished, the Menominee fiber can not be distinguished from the reed; it is almost impossible for an expert to tell the difference. The witness gives the names of 11 American firms now engaged in cutting reed in this country. The expense of establishing the reed industry is nominal. Labor cost in China is very much lower than in the United States. One factory in China employs about 20 men, of whom at least 15 are blind sol- diers. If a Chinese merchant gets $3.50 for a chair, he thinks he is getting an enormous sum of money. China sells her goods f. o. b. Hearings : Pages 2158-2161. Witness : Mr. E. F. Ganahl, representing the O'Connor Harrison Co., importers and exporters. Costs and selling prices. A domestic reed chair sells at retail on the Pacific coast for $24 or higher, while an imported grass chair retails at about $12. Many American families can not afford the domestic furniture, but can afford the foreign. A table is submitted, as part of a brief, showing how the present wholesale price of an im- ported grass chair is reached. Comparability. One of the main reasons for a revised tariff is European competition, caused solely by depreciated European ex- change. As oriental exchange is not depreciated, the furniture under discussion is in an entirely different class from the products of Europe. Rates suggested. The witness opposes the proposed rate of 50 per cent ad valorem on rattan, reed, and grass furniture, which would entirely stop the importation of furniture of this class. American manufacturers have never manufactured, and are not at present manu- facturing, grass, peel, or rattan furniture to any extent. The pro- posed duty of 50 per cent on a grass chair w r ould result in : 1. An increase in duty of $8.63, or 2,980 per cent. 2. An increase in wholesale selling price of $11.83, or 297 per cent. 3. An increase in retail selling price of $23.86^ or 297 per cent. If it is found necessary to place an additional duty upon fiber furniture, a rate of not over 10 per cent based on American valua- tion, or not over 35 per cent based on foreign valuation, should be placed on rattan, peel, and grass furniture. Any rates in excess of these will make business impossible. In the event that increased revenue is not required, an assessment of lower rates is requested, as these rates are not required to protect American manufacturers. The wording of the paragraph should be changed, as the term " fiber " is extremely ambiguous, and, under the wording as pro- posed, it is possible that Treasury decision would regard grass, peel, and rattan as fiber furniture. Remarks. Grass, peel, and rattan furniture is one of the best non- competing commodities that can be imported from south China. DIGEST OF TARIFF HEARINGS, H. R. 7456. 261 The imported furniture is of an entirely different quality from the domestic reed or fiber furniture. Comparability. In a brief dated July 26, 1922, the O'Connor Harrison Co. presents the leading arguments in support of the con- tention against the proposed duty. While this stands at 50 per cent in H. R. 7456, it would amount to 350 per cent or more if based on American valuation an " excessive and prohibitive duty." It is held that imported grass, reed, and peel furniture does not compete in any way with that of domestic make, the qualities being incom- parable. There would be a distinct hardship on the American pub- lic in the doubling of present prices. AVitness : Mentzer Piaget Co., importers and brokers, Grand Rapids. Mich. (Brief; no appearance at hearings.) In a printed circular submitted to the Committee on Finance, the firm asserts that H. R. 7456, as relating to Chinese sea-grass and rattan furniture, would increase the present rate of duty over 1,300 per cent. Comparability. As this class of furniture is not made in America, this prohibitive duty is not needed as a protective measure and would, beside, deprive the Government and the American merchant marine of a substantial revenue through the reduced volume of im- ports. The proposed duty is contrasted with the rates in previous tariffs and the location of " a nigger in the wood schedule " is sought. It is contended that Chinese sea-grass and rattan furniture should be returned to its proper classification under paragraph 414. Ob- jections to the American-valuation plan include the necessity of sell- ing goods six to eight months in advance of importation; a firm price, indispensable under this condition, would become impossible, and there would be a pyramiding of prices that would make the cost of Chinese furniture prohibitive. Kates suggested. It is pointed out that a duty under the Ameri- can-valuation plan would be a duty on transportation costs as well as on the value of the article a factor of considerable importance with bulky articles, such as those in question. A duty of 5 per cent on that plan would be the maximum that an importer could pay. PARAGRAPH 411. SPLIT BAMBOO. WITNESS, AND INTEREST REPRESENTED. FAVORING LOWER DUTIES : Mr. F. A. Steiert, representing A. Steiert & Sons. Hearings: Pages 2156-2158. Rates suggested. The witness would put split bamboo on the free list. He states that if the proposed duty of 2 cents a pound, or 66| per cent, is placed on this product the industry of making brooms for street-cleaning purposes will be eliminated, as will also about 50 per cent of the broom pushers in the various cities. Remarks. The split-bamboo fiber is of a vegetable nature and grows in the Orient; it can not be gro>vn in America; it does not interfere or compete with anything. It is used for making munici- pal brooms for street-cleaning purposes. 7713422 18 262 DIGEST OF TARIFF HEARINGS, H. R. 7456. PARAGRAPH 411. OSIER OR WILLOW. WITNESS, AND INTEREST REPRESENTED. FAVORING LOWER DUTIES : Mr. William R. Ryan, representing the Universal Willow & Reed Ware Co. Hearings : Pages 2164-2166. Costs and selling prices. The retail price of a Bar Harbor chair to-day is $5. It costs $2.35 for American labor, $2.16 for American material, total cost, $4.51, no allowance being made for overhead, etc. The imported chair in May cost $3.95, but, finding safe compe- tition, was raised to $4.95. Size of industry. Before the war 65 per cent of osier or willow used in the manufacture of furniture was imported from Germany, and about 25 per cent from France. Less than 10 per cent was grown in America. To-day more than 500 acres of osier or wilhnv are under cultivation, and about 80 manufacturers in the United States are making willow furniture. The capital invested amounts to about $1,500,000, and about 5,000 people are engaged in the manufacture. The average hours of labor are about 49| per week, with an average pay for common labor of between 30 and 35 cents per hour. The pay of mechanics and skilled laborers is between 45 and 90 cents per hour. Comparability. German competition is feared, as imports of wil- low furniture have increased as follows : In 1919, $3,040 ; 1920, $28,114; and for six months, 1921, $35,547. An American firm has been approached by a representative of a German corporation and asked to give up its factory and sell German willow furniture at prices with which the American industry can not compete. Rates suggested. The wording of paragraph 411 to be changed; page 80, line 4, after comma following the word " bamboo " insert the words " osier or willow " ; line 5, after comma following the word "grass" insert the words "osier or willow"; line 8, strike out " 25 " in figures and insert " 10," which is the present rate. If the rate on raw material is increased, it will eliminate American manu- facturers. The witness submitted a brief, from which the above notes are partly taken. PARAGRAPH 411. WILLOW FURNITURE. WITNESS, AND INTEREST REPRESENTED. FAVORING LOWER DUTIES : Mr. James F. Donnelly, representing the Mentzer-Piaget Co., Grand Rapids, Mich. Hearings: Pages 2167-2171. Costs and selling prices. A chair selling on the American market for $9 wholesale would be sold at a loss under the proposed tariff. The $4.50 left would have to include the cost of the chair ($2.25 at present rate of exchange) ; ocean freight, $2 or $2.25; rail freight, $1.81 ; and in addition pay the salesman's commission and a 2 per cent discount. A brief submitted includes a table of costs of a typical Chinese chair under various tariff rates. (See p. 2153.) Rentes suggested. A 5 per cent ad valorem rate or a specific duty. Paragraph 411. page 80, line 3, to be changed to read, beginning at word " furniture " : " Furniture made with frames wholly or in part DIGEST OF TARIFF HEARINGS, H. R. 7456. 263 of wood, rattan, reed, bamboo, or malacca. and covered wholly or in part with rattan, reed, grass, rattan peel, or fiber of any kind, 5 per cent ad valorem." As a substitute, based on specific duty, to read as follows : " Small pieces. 35 cents ; regulation chairs and rockers, 75 cents; larger pieces, such as settees, lounges, recliners. extension chairs, etc., $1." With the application of the American valuation plan this shows an increase of approximately 50 per cent over the present rate of duty. PARAGRAPH 413. PORCH AND WINDOW BLINDS. WITNESSES. FAVORING PROPOSED OB HIGHER DUTIES : The Aeroshade Co. The Hough Shade Corporation. The Raymond Porch Shade Co. The Shred wood Curtain Co. (Joint brief; no appearance at hearings.) Remarks. It is pointed out that the two widely different kinds of porch and window shades now being imported into the United States call for a division of paragraph 175, Schedule D, of the 1913 tariff act, in which the distinction between wooden and molded slats on the one hand and bamboo, reed, and similar material on the other shall be duly recognized. A duty of 45 per cent ad valorem is re- quested on the former and of 60 per cent on the latter. Attention is directed to details of German wages and to the advan- tages enjoyed by Japan, not only in this respect but in the much lower cost of a material (bamboo), reproducing itself without culti- vation every few years. PARAGRAPH 413. BASKETS. REQUESTING RECLASSIFICATION : H. Bayersdorfer & Co., florist supplies, Philadelphia. Pa. (Brief; no ap- pearance at hearings.) Rates suggested. As importers of baskets to the extent of 71 to 100 large cases at a time, the firm is impressed by the " almost 100 per cent examination " necessary to give effect to the provisions of this paragraph as drawn; that is to say, distinguishing between plain and stained. It is suggested, in order to meet this, that the paragraph be supplemented by the words : " Baskets, natural or stained, dyed, painted, polished, grained, or creosoted, 30 per cent ad valorem." This would do away with the lower rate of 25 per cent on natural baskets and would greatly simplify procedure. PARAGRAPH 414. BROOM HANDLES. WITNESS. FAVORING LOWER DUTIES : Mr. Samuel Wasserman, New York City. Hearings: Pages 2171-2172. Costs and setting prices. The cost of manufacturing handles ranges from $5 to $7 per 1,000, according to factory conditions. 264 DIGEST OF TARIFF HEARINGS, H. R. 7456. This would bring the cost to the manufacturer to about $30 per 1,000 for first grade. The present selling price is about $50 per 1,000. The prevailing prices before the war were $18 to $20, during the war $80, and after the war $50 per 1,000. Size of industry. There are between 35 and 40 broom-handle factories in the United States, and about 1,000 establishments en- gaged in the manufacture of brooms, with an output of 50,000,000 brooms annually. One concern has been in the broom-manufactur- ing industry nearly 40 years and employs, when on full time, sev- eral hundred men, with a large wage list. Rates suggested. The witness objects to the proposed duty of 25 per cent ad valorem. Broom handles are now on the free list and should remain there. Putting and keeping broom handles on the free list has the effect of stabilizing prices, will enable the manufac- turer to turn out his product at a lower price, and the consumer will reap the benefit. Remarks. The hardwood from which handles are made costs about $40 per 1.000 feet, from which about 1,700 handles can be manufactured. During the war it was almost impossible to obtain the necessary supply of broom handles at any price. America's supply of beech, birch, and maple, the hardwoods used in the manu- facture of broom handles, is very limited, and domestic forests are now being denuded of these very valuable hardwoods, which could be much better utilized in the building of homes. The importation of hardwoods necessary to make broom handles should therefore be welcomed. PARAGRAPH 414. BENT- WOOD FURNITURE. WITNESS. FAVORING LOWER DUTIES : Jacob & Josef Kohn (Inc.), New York City. (Brief; no appearance at hearings. ) Costs and selling prices. The firm objects to the proposed increase of the duty on bent-wood furniture from 15 per cent on its foreign market value to 25 per cent of its American market price. This, it is contended, means an increase from 15 per cent to 100 per cent. An imported dining-room chair, for instance, sold at $10 to the furniture dealers in the United States, would be dutiable at $2.50, practically increasing the selling price by that amount. Foreign prices still average about 70 per cent above pre-war Amer- ican-made bent-wood chairs show a marked advance over pre-war prices, in spite of voluntary reductions already made. The addition of 100 pe'r cent in duties would result in the ruin of importers. A further reduction has been made in prices even since the appearance of the firm before the Ways and Means Committee in the late spring of 1921. Even if the present foreign value basis be maintained, this pro- posed increase in the rate will seriously jeopardize imports and expose the public to the operations of combinations of domestic manufac- turers. DIGEST OF TARIFF HEARINGS, H. R. 7456. 265 SCHEDULE 5. SUGAR, MOLASSES, AND MANUFACTURES OF. PARAGRAPH 501. SUGAR. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Francis Kine Carey, Baltimore, Md., representing the National Sugar Manufacturing Co., Sugar City, Colo. Mr. W. D. Lippitt. representing the Great Western Sugar Co., Colorado, Mr. C. H. Allen, representing 1,200 farmers organizing a sugar factory. Mr. R. D. Mead, representing the Hawaiian Sugar Plantation Association. Mr. Raymond Pitcairn, representing estate of John Pitcairn. Mr. G. W. McCormick, representing the Menominee River Sugar Co., Me- nominee. Mich. Mr. Frank C. Lowry. Mr. Isauro Gabaldon, representing Philippine sugar interests. Philippines. Mr. F. R. Hathaway, representing the Michigan Sugar Co., Detroit, Mich. Mr. C. C. Hamlin, representing the United States Sugar Manufacturing Association, Colorado Springs, Colo. Mr. A. E. Carlton, representing the Holly Sugar Corporation, Colorado Springs, Colo. Mr. Joe B. Chaffee, representing the American Cane Growers' Association, Louisiana. Mr. John M. Rogers, representing the Louisiana Cane Growers' Associa- tion, New Orleans, La. Mr. Robert E. Milling, representing the American Cane Growers' Associa- tion. The American Farm Bureau Federation. (Brief.) Mr. Charles DeB. Claiborne, New Orleans, La., representing southern and national banking interests. The Chamber of Commerce of Honolulu. (Brief.) The North Platte Valley Water Users' Association. (Brief.) Mr. R. D. Bowen. (Brief.) FAVORING LOWER DUTIES : Mr. Henry A. Rubino, 79 Wall Street, New York City, representing the Miranda Sugar Co. Mr. E. P. Shattuck, representing the Cuban American Sugar Co. Mr. F. L. Craycraft, 55 Broad Street, New York City, representing the Pressed Steel Co. of Cuba. Mr. E. A. S. Clarke (Brief) Mr William W. Matos. (Brief.) Mr. Samuel M. Vauclain, representing the Baldwin Locomotive Works. (Brief.) E. Atkins & Co. (Brief.) Hearings : Pages 2257-2264. Witness: Mr. Francis King Carey. Baltimore, Md., representing the National Sugar Manufacturing to., Sugar City, Colo. Size of industry. The company manufactures annually about 1,000.000 tons of granulated sugar in 95 beet-sugar plants in 17 States. The replacement value of the factories is between $175,000,000 and $300,000.000. The company pays out annually for supplies, to farmers for beets, and to laborers, about $100.000.000. The acreage planted to beets is 880,000. Over 100,000 farmers, employing 85,000 laborers, are engaged in the beet-sugar industry. The factories employ about 35,000 men. Hates suggested. Sufficient to equalize the cost of producing im- ported raw sugar, plus freight and refining cost, with the average cost of manufacture of standard granulated sugar by the beet-sugar plants of the United States. 266 DIGEST OF TARIFF HEARINGS, H. R. 7456. Remarks. The beet-sugar industry is distinctly the creature of Government propaganda, especially that of Mr. James Wilson, Sec- retary of Agriculture. The product is manufactured in the inland parts of the country, where it is safe from invasion. It is a stabilizer of price. In 1920, when Cuban sugar rose to the preposterous price of 23 cents per pound, beet sugar sold at an average of less than 12 cents per pound. The rise in the price of Cuban sugar did not and could not take place until the supply of beet sugar was exhausted. The beet-sugar industry was the first great American industry volun- tarily to submit its operation to the control of the food administra- tion, for which patriotic action it received the commendation of Mr. Hoover. The witness denied injury to children from work in the beet fields. Hearings : Pages 2264-2268. Witness: Mr. W. D. Lippitt, general manager, representing the Great Western Sugar Co. Size of indust)~y. Sugar beets are grown in 17 States. The sugar- beet territory may be roughly divided into three major groups: The Pacific coast area (18 factories), the Rocky Mountain area (55 factories), and the eastern area (33 factories). In 1921, 800,000 acres of sugar beets were grown, yielding 7,500,000 tons of beets about 9^ tons to the acre. About 100,000- farmers, 85,000 field workers, and 35,000 mill operatives were engaged in growing and handling the crop. The crops are grown almost entirely by inde- pendent growers who, under contract with the factories, received $50,000,000 for their beets. Approximately the same amount was paid for operating, supplies, labor, and railroad freights. From the fact that normally about 60 per cent of the cost covers payments to farmers for beets, it will be apparent that the industry is^ essen- tially agricultural. Remarks. Beet-sugar factories employ a staff of trained agricul- turists who act in an advisory capacity to farmers. They also assist in combating pests. The factories, through their field department, attend to the distribution each year of from 50,000 to 75,000 field workers. Field labor shortage is practically unknown, as these labor- ers can work on other crops when not needed for the beets. A crop requiring cultivation is desirable for the soil. Corn, cotton, and potatoes are such crops. Beets serve the same purpose and flourish in regions where the other crops are not available. As the centers of population are in the East and the agricultural regions in the West, it is of importance that food should be transported in concen- trated form. This end is attained by beet sugar. An acre of sugar beets produces 2,500 pounds of pure white sugar. The beet tops and the residual pulp and molasses are valuable for live stock. These mere by-products from an acre of sugar beets will produce about 300 pounds of meat in addition to the ton and a quarter of sugar. Hence, in addition to the 1,000,000 tons of sugar, the beet sugar in- dustry should be credited with an annual contribution to the national food supply of 240,000,000 pounds of meat products. Hearings : Pages 2269-2274. Witness: Mr. C. H. Allen, Defiance, Ohio, representing the sugar industry on its agricultural side. DIGEST OF TARIFF HEARINGS, H. R. 7456. 267 Remarks. The witness showed that production of sugar was an agricultural rather than a manufacturing industry. The big question is how congressional action will affect' the farmer, the soil, and the economic interests of the country as a whole. It may be granted that sugar can be raised more cheaply in the Tropics. The question is, therefore, why grow sugar when it can be bought cheaper ? The answer is found in the fact that sugar production tends to national independence from other countries, that it in- creases the growth of other crops, and that it is in the interest of conservation of the soil. The era of cheap fertile land has passed ; the area of farming land is not increasing in proportion to increase in population. This results in an increase in the value of land and a tendency to an increase in the price of food products. It has been proved that sugar-beet cultivation in proper rotation increases the growth of other crops. It is therefore an industry worthy of en- couragement. Many crops deplete the soil, so that in many regions of the country lands formerly fertile need much replacement of mineral constituents to render them again fertile. There has been in recent years a vigorous movement for conservation. Of all the materials mentioned as demanding conservation none is so important as the mineral constituents of the soil essential to fertility. Sugar is elaborated from rain and air and sunshine inexhaustible mate- rials. Would it not be wise to raise domestic sugar, reaping fer- tility at home, rather than to ship out wheat, containing from 30 to 60 cents worth of raw material, and buy with it sugar which is only sunshine and rain and take not an ounce of fertilizing matter from the soil ? Hearings : Pages 2306-2307. Witness : Mr. Royal D. Mead. Honolulu, Hawaii, presenting brief in behalf of the Hawaiian Sugar Planters' Association. Rates suggested. The existing rate (1.60 cents from 96 sugar from Cuba) ; as a permanent policy, the maintenance of such tariff on raw sugar as will equalize the marginal cost of production between the domestic industry as a whole and its principal foreign competitor, Cuba, such rate to be computed from cost schedules by the United States Tariff Commission. Remarks. Overproduction in Cuba is in violation of the spirit of the reciprocity agreement, which was in intent to give Cuba, in the matter of sugar, only a substantial preference over other foreign nations in order that she might supply all import requirements of this country. In so far as further production necessitates encroach- ment upon the domestic market and displacement of domestic sugars it is not warranted by any moral obligation toward Cuba. Cuba has officially claimed, to be the cheapest sugar producing country in the world. Why. therefore, may she not seek the world markets for her surplus production, instead of dumping it on the American market at a loss, forcing a consequent loss to domestic sugar producers? Hearings : Pages 2274-2276. Witness : Mr. Raymond Pitcairn, Philadelphia, Pa., representing the Owosso Sugar Co., Owosso, Mich. Size of industry. Sugar plants of Michigan alone supply 250,- 000.000 pounds of sugar per annum and pay to Michigan farmers $2,000,000 for beets. 268 DIGEST OF TARIFF HEARINGS, H. R. 7456. Rates suggested. Two cents per pound full duty ; 1.60 cents Cuban duty. Remarks. Many beet-sugar plants are practically in the hands of their bankers and creditors; others are weakened and impoverished by heavy burdens of indebtedness piled up during the last two years following the war. Plants must now decide whether they will oper- ate' or shut down during the coming year. Unless adequate protec- tion is assured they will shut down, the factory organizations will be disbanded, the plants will suffer deterioration, and farms will lose their beet crops. Anything short of the present emergency tariff as a fixed and continuing measure will leave the business open to con- stantly recurring periods of jeopardy. The beet-sugar industry in Michigan and the Middle West was established through the efforts of the United States Government. In response to earnest solicitation on behalf of the Government and because of promised aid in the form of a tariff, money was subscribed, the plants were built, and extensive sugar-beet farming in the Middle West cultivated. Will the Gov- ernment desert the industry which it has been instrumental in build- ing up ? Hearings : Pages 2276-2294. Witness: Mr. George W. McCormick, Menominee, Mich., repre- senting the Menominee River Sugar Co. Costs and selling prices. Granulated beet sugar is quoted at $4.80 per 100 pounds to-day. If Cuban sugar is dumped on the domestic market as threatened, sugar w T ill be sold for $3.80 per 100 pounds. The average cost of producing beet sugar, as estimated by 16 of the largest factories, is $5.09 per 100 pounds. Size of industry. About 43 companies are operating. Their con- dition is such that if they were called upon to settle up they could not do it. The number of factories has increased from 6 in 1897 to 106 in 1921. These are located in agricultural areas of 17 States, and are attracting laborers and farm hands. To-day, America has about $190,000,000 invested in the beet-sugar industry, approximately 85,000 laborers in the beet fields and 35,000 engaged in the operation of the factories. Comparability. The deplorable condition of the beet-sugar in- dustry has been brought about by the importation of sugar from foreign countries. Through the preferential treatment given to Cuba she has practically a monopoly of the American market. In September, 1919, the price of Cuban raw sugar f. o. b. New York was 5.88 cents per pound. In April following, that is to say, when domestic sugar was practically exhausted and Cuba saw no other competition, she raised the price until it reached 26 cents per pound, and retailers were forced to pay 30 to 35 cents. As the Cuban and other foreign sugars were not governed by the rules and restrictions laid down for the American industry by the Equaliza- tion Board, they sold to American refiners at top high prices. In November, 1919, American standard granulated sugar was quoted, delivered in New York at 11^ cents per pound, when Brazilian raw sugars were sold in the same market at 14 and 16 cents per pound. In 1920, American beet sugar sold from $2 to $4 per 100 pounds be- low the actual cost of production, this being due to a demoralized market glutted with sugar from all parts of the world. DIGEST OF TARIFF HEARINGS, H. R. 7456. 269 Remarks The sugar-beet industry of the United States finds itself to-day in the most critical condition of its history ; it stands on the very verge of disaster. There was a staggering loss on the crop of sugar produced in 17 States in 1920-21 when the highest scale of wages was paid. Cuba is holding about 1,250,000 tons of sugar over from last year's crop, and it is reported that she threatens to throw this on the American market at 1 cent per pound. The quoted price on raw sugar, freight paid, delivered at Xew York, sold in the months of January and March, was 2 cents per pound. More than this, veiled threats are being made that unless propagandists get what they are asking for a revolution will follow and the United States will be obliged to intervene, with annexation as the inevitable result. Hearings : Pages 2288-2289. Witness: Mr. Frank C. Lowry, representing the United States Equalization Board. In the course of Mr. George M. McCormick's testimony, Mr. Lowry obtained permission to make a statement, summarized as follows : The equalization board went out of business January 1, 1920. The crops of Cuban sugar did not come in until after that time, when there was a shortage of sugar in the East. The beet-sugar people were called upon to rurnish 100,000 tons to relieve the situation when sugar was selling at 9 cents per pound a price fixed by the Govern- ment. The beet sugar brought into the eastern territory and sold at 10^ cents was based on the new crop. The cane-sugar price of 9 cents w r as based on the cost of production, and the price was ar- ranged for the whole crop. After January, when the equalization board no longer controlled prices, they soared to the top. It was after the price of Cuban sugar went up that the Porto Kican and Hawaiian products went up the same way, from $11.33 to $22 per ton. Hearings: Page 2251. Witness : Hon. Isauro Gabaldon, Eesident Commissioner from and representing the Philippines. Comparability. Philippine competition in the American market with Cuban sugar is made impossible because difference in freight rates and other items highly favor Cuban sugar. Rates suggested. The present emergency tariff act on sugar should be made permanent in order to protect the industry in the Philippines. If the Cuban interests succeed in reducing the rates, the Philippine product will be entirely driven from the American market. As the Philippines enjoy the American market on terms of equality with domestic producers, they are naturally concerned over legislation threatening their disposition of the sugar which they have produced at heavy and abnormal expense. They are un- der the further disadvantage, applying to all duty-free sugars, aris- ing from the drawback regulations. Hearings : Pages 2294-2297. Witness: Mr. F. R. Hathaway, secretary and treasurer, represent- ing the Michigan Sugar Co., Detroit, Mich. Size of industry. Duty-free sugar of the United States (conti- nental and insular) amounts to 2,000,000 tons; Cuba produces about 4,000.000 tons. The combined output is 6,000,000 tons, of which amount only 4,000,000 tons can be consumed in the United States. 270 DIGEST OF TARIFF HEARINGS, H. R. 7456. Rates suggested. The company favors the rates proposed in H. R. 7456. A high protective tariff can not work to the disadvantage of Cuba except in one particular to keep her from monopolizing the domes- tic market. Cuba's protection against Dominican and South Ameri- can sugar is greater under the proposed bill than it can be under a 1-cent tariff. All previous tariffs since 1890, except that of 1894. have been in a measure a protection to the domestic industry. The minimum recorded price of American beets (1916-17) is $6 per. ton, corresponding to a rate of $2.50 per 100 pounds of sugar, to which must be added the transportation cost, the acreage, and the cost of manufacturing. Cuban sugar can be laid down for $2 per 100 pounds in the United States a fact in itself sufficient to demon- strate the necessity for a protective tariff. Hearings: Pages 2297-2302. Witness : Mr. C. C. Hamlin, representing the United States Sugar Manufacturers' Association. Comparability. The industry is confronted with a tremendous overproduction of sugar in Cuba, which supplied, and must con- tinue to supply, half of the American sugar demand. Cuba is pro- ducing in quantity to supply all United States requirements. There must be a contraction in production, so that supply and demand will be to some degree balanced ; until that condition arrives there will be no stability in the sugar industry. If Cuba had marketed her sugar holdings in 1920 she would not be in such a deplorable condition to-day, when she threatens to eliminate the American industry. Rates suggested. The witness does not think that the propaganda for a 1-cent duty on Cuban sugar is fair. If an adequate tariff is enacted. Cuba will manufacture at a reasonable cost that will help settle this market and insure sugar to the consumer at a reasonable price. Increased United States consumption will take care of the increased supply. The sugar-beet industry is not destined to increase. Remarks. Since the development of the beet-sugar industry the United States has enjoyed the cheapest sugar in the world. The sup- ply produced here has been the greatest stabilizer of prices of sugar in the home market, and the greatest calamity that could befall the American consumer would be to have the industry destroyed. In a letter submitted, Mr. Henry A. Rubino states that the Great Western Sugar Co. in 1919-20 produced 30 per cent of the entire amount of sugar of the United States. This company operates some 16 factories, located in Colorado. Montana. Wyoming, and Nebraska. Its growth and success were entirely due to the Payne- Aldrich and Underwood tariff acts. Hearings : Pages 2303-2306. Witness: Mr. A. E. C'arlton. representing the Holly Sugar Cor- poration. Colorado Springs, Colo. Size of industry. The witness states that his company stands sixth in American production, producing 1.000,000 bags of beet sugar annually. Hates suggested. If the domestic industry is to be continued, not a temporary but a permanent tariff must be provided, capable of covering the readjustment period in Cuba. A duty of 2.4 cents per pound is required; this would result in a cost of 2 cents raw and a DIGEST OF TARIFF HEARINGS, H. R. 7456. 271 refining charge of 1 cent in a price of 5.45 cents for refined sugar in New York. A freight rate of 50 cents per bag should be deducted from this for all companies west of the Missouri. Even with a duty of $2.40 on Cuba, the net yield to domestic beet factories would be $4.90. At anything under this, the price to the farmer would be practically nothing. Remarks. The beet-sugar farmers as well as the factories have had tremendous losses during 1920-21. The farmer is the mo^t impor- tant element in the industry and he can be protected by the tariff. The beet-sugar factories would have been unable to function and treat the beets that they contracted for had it not been for the Wai- Finance Corporation. Hearings : Pages 2307-2315. Witness: Mr. Joe B. Chaffe, representing the American Cane Growers' Association, with a membership of about 450. Cost mid selling prices. Cost of production in one mill was $5.33 per ton of sugar ; the harvesting, etc., $1 ; overhead expenses, $1 ; making a total cost of production of $7.33 per acre: (sic) against this an average of $3.85 per ton will be received from the factory, showing a loss of $3.48 per ton. This was the highest of one fac- tory. Losses in other factories were, in one case a loss of $1.99 per ton, in another 65 cents per ton, and in another 82 cents per ton. Tables on costs for 1920 are printed in full on pages 2314-2315. The cost of labor is $1.25 per day without board. Size of irfiflustry. The witness represented the smallest unit but the oldest sugar producers in America, having been producers over a hundred years in Louisiana. They have 600,000 acres under culti- vation, which, at a cost of $125 per acre, would amount to $75,000,- 000. They have 189 sugar factories, appraised in 1914 at $33,000,000. Their railroad equipment is estimated at $3,500,000, and they own 48,000 mules, valued at about $7,200,000. These and other invest- ments make a total of $120,000,000 invested in the industry. They employ about 350,000 laborers and grow about 45 per cent of all cane crushed, 55 per cent of which is grown by independent farmers on their own lands. Hearings: Pages 2315-2338. Witness: Mr. John M. Rogers, representing the Louisiana Cane Growers' Association. Size of industry. There are 241 establishments operating Louisi- ana cane and American beet sugar and 18 refiners engaged in refining exclusively. Comparability. In 1920 the invested capital in the Louisiana cane- sugar industry was $125,000,000; in beet sugar, $600,000,000. The Hawaiian investment was about $175,000,000, and the Porto Rican about $150,000,000. The total investment of capital in the produc- tion of sugar in America and its insular possessions is at least $1,050.000.000. The Cubans started with an investment of $600,- 000.000. which has grown in a short time to a billion dollars ; if their investment continues at this rate, the Cuban sugar production will exceed that of the rest of the world. Rates suggested. Analyses of sugar costs, from various sources, show that to equalize costs the following tariff rates must operate as against Cuba. 272 DIGEST OF TARIFF HEARINGS, H. R. 1456. War Industries Board : Louisiana* cost, 3.98 cents per pound; Cuban, 1.45 cents ; the difference to equalize cost would be a tariff of 2.53 cents. Department of Commerce, Miscellaneous Series 53 : Louisiana factory cost, 3.973 cents: Cuban cost, 1.445 cents; tariff required would be 2.528 cents. Tariff Commission, by Doctor Wright : Louisiana cost, 4.480 cents; Cuban. 1.70 cents a difference of 2.78 cents : deducting 0.379 cents, to bring the Louisiana line of sugar to a raw basis, makes a difference of 2.401 cents. These authorities show that Louisiana needs a tariff of 2^ cents, as against Cuba, to equalize costs. A tariff equalizing costs of production in America and Cuba, means a continuation of the sugar industry in the United States and its insular possessions. With a general tariff of 2.50 cents, Cuba would have an advantage, under the 20 per cent differential, of 50 cents per hundred pounds. With a tariff of 3| cents, Cuba would be 2, an advantage of 62 cents (sic). A low tariff on Cuban sugar would completely destroy the continental producer. A tariff equaliz- ing the cost of American production would not only be a protection to the American sugar industry but a direct protection to the con- sumer as well. Remarks. There are about 40,000 Chinese in Cuba, and Chinese are coming into Cuba at the rate of 8.000 annually practically under contract to work in the sugar-cane industry. Tables on costs, pro- duction, etc,, were submitted as exhibits. In a later brief (pp. 2402-2408) the witness objected to the polari- scopic test for molasses and sirups as not being a true-value test, taking no account of their food, feed, and manufacturing value. The brief enters at length into the adaptability of molasses as a basis for a balanced feed ration on account of its high carbohydrate content, its high digestibility, and. ordinarily, its cheapness.' Reference is made to the report of a committee appointed in 1918 by Mr. Herbert Hoover, then food administrator, in which a true analysis of the various grades of sirups and molasses is given. Hearings : Pages 2339-2343. Witness : Mr. Kobert E. Milling, representing the American Cane Growers' Association, New Orleans, La. Rates suggested. A tariff of 1 cent per pound is not sufficient; a rate of 2 cents is essential if the American industry is to survive. Cuba can raise sugar at 1^ cents per pound because of her labor con- ditions ; this is not possible in America. Remarks. The question of tariff rates lies between the Cuban producers and the American refiners on the one hand and the Ameri- can producer on the other, the competition being unequal. From 1898 to 1913 the American sugar industry increased by 1.650 per cent. Since 1913 the increase has been only 4 or 5 per cent. Hearings : Pages 2348-2354. Witness : The American Farm Bureau Federation. (Brief; no appearance at hearings.) Siz,e of industry. The United States and insular possessions pro- duce about 2.000,000 short tons of sugar annually, slightly less than one-half of the annual domestic consumption. Most of the remain- der is imported from Cuba. Comparability. Under the terms of the reciprocity treaty of 1903, Cuba enjoys a reduction of 20 per cent from the regular duty paid by, DIGEST OF TARIFF HEARINGS, H. R. 7456. 273 other countries shipping to the United States. Large stocks of the 1920 sugar crop are still in the Cuban warehouses, having been held because of the low price in 1920-21 following heavy shipments to America by other countries. This surplus sugar now threatens to swamp the United States market and destroy American producers. Factors to be considered by Cuba in considering new markets for her sugar are the tariff duties assessed by importing nations, and ocean freight rates, both of which are higher than in the United States; even with the American duty trebled it would still be to Cuba's advantage to ship to the United States. Rates suggested. The federation favors the proposed rate of 1.6 cents per pound. The consumer in Washington pays 6 cents per pound for sugar, of which 1.6 cents is tariff duty, constituting a con- sumption tax of 26.6 per cent. This is paid willingly in most cases to protect the American producer, but a higher rate would be ob- jected to. Both the American producer and the American consumer must be protected. A better policy would be to adopt President Harding's proposed elastic tariff, with the Fordney bill provision of 1.16 cents per pound on sugar testing not above 75 (amounting to 1.6 cents per pound on Cuban sugar of 96 polariscopic test) as a minimum duty. This would give the American producer a protec- tion averaging six-tenths of 1 cent per pound over and above the protection received prior to the adoption of the emergency tariff in May. 1921. With the Fordney rate as a minimum and with a pos- sible maximum authorized by Congress as an item of an elastic tariff, the President might, by proclamation, fix the higher rate if at any time it should become evident that American producers were losing ground to the detriment of the country. Remarks. With the exception of one big crop in 1920-21, the sugar-beet crop in the United States has not been materially in- creased since 1913-14. It is generally conceded that cane-sugar pro- duction in Louisiana has practically reached its maximum. Tables giving statistics on production, imports, and exports of sugar from 1911-12 to 1920-21 will be found on pages 2352-2354. A later brief (pp. 2383-2397) states that the polariscopic test ig not a true index of the sugar content of molasses : its use has resulted in most of the imported molasses being in the lowest of the three grades. Discussing the operation of H. R. 7456, the use of the Clerget method of sugar determination is laid down as essential. Considerable space is devoted to the numerous uses of molasses from the table down to stock feed and distillation. Hearings: Pages 2343-2346. Witness: Mr. Charles De B. Claiborne, representing southern and national banking interests. Remarks. In the course of a general statement dealing with southern conditions and sentiment the witness, a New Orleans banker, reviewed the sugar situation with particular reference to Cuban prices. He wished to have it clearly understood that a large majority (80 or 90 per cent) of southern bankers are in favor of high protection, for the coming year at any rate. A duty of 1.6 cents per pound on sugar is not enough to encourage bankers to make loans to the industry. If sugar is to live in Louisiana, the 274 DIGEST OF TARIFF HEARINGS, H. R. 7456. duty must be such as will maintain that commodity at 4 cents per pound. The idea that the American people are ordained to save the entire world is a type of national egotism. It is now necessary to save southern and western industries if financial institutions are to re- main solvent. Witness: The Chamber of Commerce of Honolulu. (Brief; no appearance at hearings.) Rates suggested. A powerful effort is being made to induce the United States Government to grant a reduction on the present tariff duty on Cuban sugars, in order to relieve the present financial dis- tress of Cuba, without regard to the effect that such reduction would have upon the American industry. In spite of the present tariff protection, the producers of sugar in the United States are strug- gling to carry on their industry, with production cost in excess of the market value, due to overproduction. Domestic producers would undoubtedly be ruined if the desired reduction of the present tariff rate on Cuban sugars should be granted. The chamber of commerce petitions the United States to maintain the present tariff on foreign- produced sugar as a necessary protection to the home consumer, re- garding a nucleus of home production as an essential protection of the American consumer against control of the foreign sugar trade. Witness: The North Platte Water Users' Association. (Brief; no appearance at hearings.) Rates suggested. The association indorses the 2 cents per pound duty on sugar as proposed. THe beet-sugar industry of Nebraska and 17 other beet-sugar producing States is facing a desperate emer- gency. It would be detrimental to that interest that any reduction- in the tariff be made, or that any increase beyond the present 20 per cent preferential should be granted to Cuba. Witness: Mr. R. D. Bowen. (Brief; no appearance at hearings.) Rates suggested. The witness is convinced that the tariff duty on sugar should not be less than 2 cents per pound. Men, women, and children work in the Louisiana cane fields from, be fore daylight to long after nightfall, and sometimes into the night. They are doing this to furnish the American people with sugar, and he does not be- lieve that the people of America would oppose the duty of 2i cents per pound if they knew what the cane and beet producers of this country are up against. A tax on sugar is the most evenly divided tax that can possibly be levied on American industries. Hearings : Pages 2184-2208. Witness : Mr. Henry A. Rubino, representing the Miranda Sugar Co., Oriente, Cuba. Size of industry. The witness, in his testimony and in a submitted brief, show T ed that over $1,000,000,000 of American capital was in- vested in the sugar industry in Cuba, while the total amount of American capital invested in the domestic sugar industry the beet- sugar industry in the United States and the cane-sugar industry in Porto Rico, in the Hawaiian Islands, and in the Philippine Islands was only $545,258,476. About 2.100,000 tons of sugar is produced in the United States and insular possessions annually. Of the 4,- 500,000 tons of sugar consumed in the United States. Cuba furnished DIGEST OF TARIFF HEARINGS, H. R. 7456. 275 about 2,500,000 tons. Cuba is conceded to be the largest sugar-pro- ducing country in the world. Kates suggested. The company opposes a tariff increase on sugar. The Fordney emergency tariff increased the duty on raw sugar from 1 cent per pound to 2 cents per pound, and, with the differential of 20 per cent in favor of Cuban sugars, brought the duty to 1.16 cents a pound, or six-tenths of a cent a pound higher than before. Remarks. The argument of the witness was to the effect that American investments in Cuba deserved equal consideration with investments in the United States, that the duty of $1.60 per 100 pounds levied upon Cuban sugar under the emergency tariff had been borne by the Cuban producer without benefit to the American con- sumer, and if continued under the Fordney bill would continue to be borne by the Cuban producer ; and that this burden would " ruin^ our industry in Cuba and utterly destroy our American investment there." Details of American interests in Cuba are given in tables on pages 2198-2201. Hearings : Pages 2210-2215. Witness : Mr. Edwin P. Shattuck, representing the Cuban- Ameri- can Sugar Co., the Francisco Sugar Co., the Tuinucu Sugar Co., and the Tacajo Sugar Co. Size o\f industry. American producers of sugar in Cuba repre- sent more than 50 per cent of the production of the island. Cuba supplies the United States with about 50 per cent of its annual consumption. The capital investment of United States citizens in Cuba is estimated at over $1,000,000,000, being more than the com- bined American investments in the sugar industry of the United States, the Philippines, Ha\vaii, and Porto Rico. Rates suggested. A differential of 1 cent per pound between Cuban sugars and those of the United States is sufficient; more is unwar- ranted. Remarks. The increased duty affects only Cuba, as imports from other countries are negligible. Cuba is under the protection of the United States and her sovereignty is restricted by treaty, thus plac- ing upon the United States heavy moral, if not legal, obligations. Imports into Cuba from the United States amounted last year to over $515,000.000. Of all countries, Cuba stands fourth in absorb- ing United States exports. To destroy or lessen the prosperity of the Cuban sugar industry will decrease United States exports of food and manufactured products to Cuba. The Cuban trade is of im- mense value to United States shipping interests. The action of Cuba in immediately following the United States in declaring war on Germany was of great importance. With her long coast line, she prevented the use of harbors by the German fleet; she also sup- pressed enemy propaganda in her own territory and in adjoining countries. Slie furnished sugar to the United States during the war at a low rate. The offer of the 1919-20 crop was not accepted, but it showed her desire and purpose. The failure to accept it and the fear of sugar scarcity drove the price of sugar to 23| cents per pound in this country. The increased duty under the emergency tariff was a severe blow to Cuba. It became operative in the last part of May, during the peak of the Cuban crop and during the stagnation of the sugar mar- 276 DIGEST OF TARIFF HEARINGS, H. R. 7456. ket. The producer in Cuba was compelled to absorb the additional duty of 0.6 cent per pound. The day before the act was signed Cuban sugars were selling at 3.875 cents per pound and on the following day at 3.275. The act depreciated the value of sugar in Cuba $35,000,000. For a few years after the passage of the reciprocity act in 1903 Cuban producers received the benefit of the 20 per cent concession, but after a few years this benefit was transferred to consumers in the United States. On the other hand, producers in the United States who export to Cuba have received continuously the free benefit of the concession of 20 per cent upon imports into Cuba. If Cuba is to be denied the reciprocal advantages which she supposed she would receive under the reciprocity treaty, she will be compelled to jnodify her own tariff schedule and increase her duties against Ameri- can goods in order to be in a position to buy cheaper elsewhere. Hearings : Pages 2241-2250. Witness : Mr. F. L. Craycraft, representing the Pressed Steel Co. of Cuba. Rates suggested. A full-duty rate of 1.256 cents per pound, a Cuban rate of 1.0048 cents per pound or, if a higher full-duty rate be established, a sufficient preferential to make the Cuban rate 1.0048 cents per pound. Remarks. The witness, in addition to testimony, submitted a brief. His chief emphasis was placed on the value of Cuba as a market for American goods and the injury to the American producer which would result from injury to Cuba and its ability to purchase condi- tions already resulting from the duty imposed in the emergency tariff and likely to result from the Fordney bill should the latter become a law. Imports from the United States in 1920 were valued at $515,000,000 and exports to the United States at $720,000,000. The witness submitted elaborate tables showing article by article for the years 1919 and 1920 the total export's of the United States and the exports to Cuba. In the case of many products Cuba stood first among all nations as a consumer of American products. He raised the question whether a country which had proved itself such a valu- able customer should have its chief industry the one upon which it relies to pay for its imports killed by the proposed tariff. He further pointed out that the concessions made by Cuba in favor of United States imports ranged from 20 to 40 per cent, while the con- cession received by the island on sugar was only 20 per cent. Finally, because of Cuba's peculiar relation to the United States, she deserves special consideration. Witness : Mr. E. A. S. Clarke. (Brief; no appearance at hearings.) Rates suggested. The witness urges that the duty of 2 cents per pound on sugar now in force under the emergency tariff be reduced to a permanent tariff of 1 cent per pound for Cuba. Under present conditions of small demand and large crop the Cuban producer has had practically to assume the increase in duty, with the result that his selling price, far from showing him a profit, shows in substan- tially all cases an actual loss. If the prosperity of Cuba is to be shut off by the high tariff, American producers will be unable to do business and will" lose a large profitable and permanent market. This is one of the effects on the general economic prosperity of the country which can result from an unduly high tariff. DIGEST OF TARIFF HEARINGS, H. R. 7456. 277 Remarks. Any action which reduces the profit of the Cuban sugar producer is a blow to the American capital which has been invested in such large quantities in sugar production in Cuba. Cuba ex- panded and increased her sugar-producing capacity during the war at the instance of the United States, and her ability to market her crop should not be curtailed in an unfriendly way by a Government which owes a peculiar duty to Cuba and is bound not to discrimi- nate economically against her. Witness: Mr. William W. Matos. (Brief; no appearance at hearings.) Rates suggested. A 2-cent tariff on Cuban sugar will be ruinous and will seriously injure American capital invested in the island. As the rate of exchange between the two countries is equal. Cuba offers the best foreign market to-day for all American goods. A tariff increase on sugar would largely destroy this. A 2-cent tariff will quickly curtail sugar production, will reduce Cuba's capacity to buy and pay, and will open the way for foreign merchants to do big business in Cuba, securing much of the American business. Remarks. In 1920 the value of American products sent to Cuba exceeded $500,000,000, more than the total of all products sent by the United States into Spanish America. During the World War Cuba sold sugar to the American Government with very small profits, while paying American sellers the full prices charged for manufac- tured goods and food products. Witness: Mr. Samuel M. Vauclain, representing the Baldwin Lo- comotive Works. (Brief; no appearance at hearings.) Rates suggested. The company objects to the 2-cent tariff pro- posed on Cuban sugar. They have a total of approximately $3,000,- 000 credits among Cuban railways and plantations, and if the United States be curtailed as an outlet for sugar by a high tariff, the com- pany's interests w 7 ould suffer heavily; many of the Cuban plantations whose notes the company holds would be forced into bankruptcy. Witness: E. Atkins & Co. (Brief; supplementing appearance at hearings.) Rates suggested. The company does not favor an increase in the tariff on Cuban sugar. The emergency act of May, 1921, advanced the tariff on it by 60 per cent, making the present tariff on sugar much higher than it had been for many years. The domestic sugar industry is firmly .established and, in conjunction with Cuba, assures an annual supply of sugar greater than the consumption. The tariff tax cannot be defended as a revenue measure, because its annual cost to the con- sumer will be over $150,000,000, of which approximately only one- half will find its way into the United States treasury. An excise tax of one-half cent per pound assessed on all sugars consumed, in ad- dition to the old tariff, would produce about $45,000,000. This would give ample protection to the domestic industry and would yield the Government approximately $90,000,000, which is more than will be secured through the proposed tariff bill, while its cost to the con- sumer would be less. A message to the Cuban Congress asks that a tariff duty of 30 per cent be placed on articles preceding from countries raising the duties on Cuban sugar and tobacco. 77134_22 19 278 DIGEST OF TARIFF HEARINGS, H. R. 745(5. PARAGRAPHS 501 AND 502. SUGAR. WITNESSES, AND INTERESTS REPRESENTED. FAVORING LOWER DUTIES : Mr. Edwin F. Atkins, representing E. Atkins Co., New York City. Arbuckle Bros., New York C.ty. (Brief.) Mr. H. S. Rubens, representing the American committee on Cuban emer- gency, New York City. The Hershey Chocolate Co., Hershey, Pa. (Brief.) Hearings : Pages 2173-2184. Witness : Mr. Edwin F. Atkins, representing E. Atkins & Co.. Boston and Xew York. fiemarks. The witness holds that rates under H. R. 7456 are higher than rates under preceding acts for 30 years : that they would check importations and reduce revenue. Pointing out that Cuba was in financial straits, he rehearsed the relations between the United States and Cuba, leading to the reciprocity treaty, and claimed that these relations placed upon the United States an obligation to aid Cuba. He feared that the disastrous situation in Cuba might lead to polit- ical disturbance calling for intervention. The proposed rates would tend to make the situation worse. Cuba was a large purchaser of American commodities, ranking in fact as fourth among all. the value of such imports exceeding $500,000,000. The Fordney bill would reduce the buying power of Cuba, with the inevitable loss of trade to American concerns. If the Fordney bill is enacted, domestic manufacturers or refiners coming within the scope of paragraph 502 would be able to import full-duty-paying sugars at 25 per cent less than the full tariff rates :. these sugars could be imported by the beet-sugar factories or by Louisiana refiners at a duty of 1.50 cents per pound, while Cuba would pay 1.60 cents. The object of the treaty with Cuba was to give the island a preference of 20 per cent over all like imports from other countries. Any tariff act that prevents the complete carrying out of treaty obligations with Cuba would manifestly be a breach of international faith, which it is not believed the Government of the United States intends to commit. Hearings : Pages 2208-2210. Witness : Arbuckle Bros., Xew York City. (Brief submitted by Mr. M. E. Goetzinger.) hates suggested. Same as before the passage of the emergency tariff ; ultimately to come on the free list. Remarks. The witness represents refiners pure and simple, having no interest in sugar production. The refiners are dependent upon Cuban sugar, being unable to use domestic raw beet sugar because none is made in this country for sale. They can not often use Louisiana cane sugar, because little comes north. They do use some sugars from Porto Rico, Hawaii, and the Philippines, but these are insufficient to satisfy the eastern demand. The use of Cuban raw sugar is consequently not a matter of choice but of necessity. If the cost of the raw material were to be legislated out of line with the law of supply and demand, there would result a depression in the refining industry^ involving unemployment, idle capital, diminished supplies. DIGEST OF TARIFF HEARINGS, H. R. 7456. 279 and increased cost to consumers. The unemployment would affect some six or eight thousand employees in New York alone, to say nothing of employees in other refining centers Boston, Philadelphia. Baltimore, and Savannah. To raise the duty will not do away with the surplus now existing in Cuba. 80 long as that surplus remains it will depress the sugar market. The faster it is consumed the more quickly will the crisis be passed and a return to normal conditions brought about. Freight charges establish natural zones for the product of the beet sugar manufacturers on the one hand and the eastern refiners on the other, with a neutral zone between. When an increase in the duty makes it possible for the domestic industry to penetrate the eastern cane sugar zone the eastern consumer who pays a large part of the tariff bill has just cause to hold up a warning finger and ask to be heard from. Speaking of paragraph 502. the witness pointed to " a new and truly startling innovation in the present bill (H. R. 7456) in its proposed discrimination against the eastern refiners by giving to beet factories and to refiners of domestic cane a substantial reduction in the duty on all foreign sugars which they may choose to use in their establishments. A more brazen and un-American proposal scarcely can be conceived, nor can we believe that it will receive serious con- sideration." Hearings : Pages 2215-2240. Witness: Mr. Horatio S. Rubens, representing the American com- mittee on Cuban emergency, New York City. Costs and selling prices. Cuban sugar is now (December, 1921) be- ing quoted for January delivery in New York at 2 cents per pound. This is not a reflex of the cost of production. There has not been a sale of Cuban sugar on the New York market since the beginning of the year that has not been below the cost of production. Size of industry. The witness called attention to large American investments in the Cuban sugar industry which, he claimed, should have equal consideration with American investments in the beet sugar industry, especially in view of the peculiar relation of wardship in which Cuba stands to the United States. He pointed out that the refining interest, having an investment of between $400.000.000 and $500,000,000 as compared with $175,000,000 in the beet sugar interest, and employing tens of thousands, of American laborers, was de- pendent upon Cuba for its raw material and that this at least was an American industry employing American capital. Rates suggested. One cent per pound. Remarks. In reply to the charge that Cuban labor was receiving only 65 cents per day. the witness stated that labor in Porto Rico was receiving only 50 to 60 cents. The truth was that there was no work at that season and. rather than permit people to starve, labor was " invented." The 65 cents per day did not represent the wage rate through the year. The witness also called attention to the employ- ment, of child labor in the beet fields. The children so employed are not American citizens: they are Japanese. Mexicans, and Russians of a type who will not become citizens or, if they do, will become 280 DIGEST OF TARIFF HEARINGS. H. R. 7456. parents of children that for lack of education will be a menace to the community. He was fearful of the rate proposed in the Fordney bill, not so much with reference to the emergency brought about by present conditions, but because it might become permanent and pre- vent Cuba from ever coming back to prosperity. He pointed out the great value of a prosperous Cuba to the United States as a market for its goods, both manufactures and farm products. On paragraph 502 the question raised the provision under which 25 per cent reduction should be allowed to certain American pro- ducers of sugar if they imported a certain quantity of sugar, this to be twice as much as they produced or refined from 'American produc- tion. The situation now is that the full-duty-paid sugar is sold on the basis of Cuban sugar, so that the full duty-paid sugar must ab- sorb the difference between the Cuban rates and the full rate. The refiner buys the sugar at a lower price and then adds the full duty, or 2 cents, to it, and that sum total is not more than the Cuban sugar with $1.60 added to it. As the refiners get a drawback, the refiner will buy only the full-duty sugar. He will not buy the Cuban sugar, because he will get 2 cents a pound drawback for what he pays H cents for. In the other case he will get onlv $1.60 for what he paid $1.20 for. In a brief dated August 5, 1921, the witness contributes observa- tions summarized below : When the United States entered the World War Cuba was asked officially whether she would sell that years entire sugar crop to the United States. She voluntarily agreed to the plan, ignoring the law of supply and demand, which would have enriched her beyond her dreams, and accepted the price fixed by the United States, '4.6 cents per pound. In the following year the United States again purchased the entire Cuban crop at the fixed price of 5.5 cents per pound. These sugars were handled by the Sugar Equalization Board, which resold them at a profit of over $30,000,000 at the expense of the Cuban producer and to the advantage of the United States Treasury. During this period everything was done to induce Cuba to increase to the uttermost her production of sugar, deemed so important an aid to winning the war. So far from Cuba being responsible for the rise in the price of sugar in 1920, she offered her sugar to the United States at a very reasonable price., but the Government refused it. Now, when sugar is low because of her great production, the United States proposes to penalize her by an increase of duty. Sujrar is Cuba's principal staple, upon which her economic future depends. The island has in the past 20 years been a most valuable customer of American interests, but she can neither pay her debts, nor purchase as in the past, if her sugar crop is rendered unprofitable or heavily curtailed. A falling off of revenue will seriously cripple the Cuban Government at the risk of governmental bankruptcy. If the United States were to annex Cuba, because of distress brought about through American tariff action, the result would be free entry of sugar into the United States, and the condition of American producers who so thoughtlessly demanded this increase of 2 cents per pound duty DIGEST OF TARIFF HEARINGS, H. E. 1456. 281 would be the reverse of what they are seeking. If Cuba should be reduced to a state of control or ownership by the United States, the rest of the Latin-American world might consider the proposed tariff as a means to an end the end of the independent Republic of Cuba. Witness: The Hershey Chocolate Co. (Brief; no appearance at hearings.) Kates suggested. The company opposes the 2 cents per pound tariff on sugar as proposed, and is opposed to anything above 1.256 cents per pound for Cuba. The company is a producer of sugar in Cuba for its own manufacturing operations in the United States, and, as such, is opposed to the principle embodied in the provision of paragraph 502, permitting the importation of sugar, for certain pur- poses specified, at three-fourths the rate of duty. Unless a similar provision for reduction of duty is made applicable to manufacturing consumers of sugar in the United States, producing sugar for their own use in Cuba or elsewhere, the provision is inequitable. Such persons, including the company itself, would have to sell their sugar abroad, and repurchase it in the United States from some other manu- facturer of sugar privileged to avail himself of the benefit of the proposed -new paragraph. PARAGRAPH 502. SUGAR. WITNESSES, AND INTERESTS BEPKESENTED. FAVORING PROPOSED OR HIGHER DUTIES: The United States Sugar Manufacturers' Association, New York City. (Brief.) The Porto Rican sugar producers. (Brief.) Mr. Frank J. DilHnghain, representing the South Porto Rican Sugar Co. Hearings : Pages 2302-2303. Witness : Brief submitted by Mr. Henry T. Oxnard for the United States Sugar Manufacturers' Association. Rates suggested. Referring to H. R. 7456, which provides for the importation of double the amount of domestic manufactured sugar at three-fourths of the regular rate on other sugars, the witness states that such a provision would be class legislation and would also be abortive so far as any permanent good to any portion of the domestic sugar industry is concerned. Owing to the geographical location and prohibitive freight rates, there would be no possibility of the great bulk of the domestic producers, especially of beet sugar, availing themselves of any of the benefits of this provision. With few excep- tions, none of the American beet sugar factories are near enough to the coast or the Great Lakes to be able to import and refine foreign sugar. The effect of the adoption of paragraph 502 would be detri- mental to both the domestic beet and cane sugar industries. The do- mestic beet-sugar industry is practically opposed to the incorporation of this paragraph in the proposed tariff bill. Hearings: Pages 2251-2255. Witness: The Porto Rican sugar producers. (Brief.) >'/.?.' (>j 'm of industry. Approximately $9,000,000 worth of pickled mackerel and herring is produced annually. Comparability. At times, Alaskan herring sells for more than the imported. Rates suggested. One cent per pound on mackerel and codfish and one-half cent on herring. The duties in the Fordney bill are regarded as prohibitive, the proposed rates on mackerel and herring, for in- stance, ranging from 42| to 67^ per cent ad valorem. These pickled fish are largely the food of the poor, and it is proposed, under the bill, to subject them to higher duties than those on food luxuries. The 322 DIGEST OF TARIFF HEARINGS, H. R. 7456. United States can not produce enough fish of the required sort to supply the demand/ Hearings: Pages 2989-2991. Witness: Mr. J. L. Fawsitt, Irish trade commissioner to America, representing the Irish salt-fish industry. (Brief.) Remarks. American supplies of native salted mackerel and her- ring are inadequate to meet the large domestic demand. Ireland is an important source of this food, which is mainly consumed by the work- ing classes. A duty would restrict imports, increase prices, and dis- courage the growing Irish trade with the United States. The Irish fishing industry is declining, with fewer persons and boats now employed and an annual catch very much smaller than a decade or more back. Witness : S. H. Levin's Sons, importers, Philadelphia, Pa. (Brief; no appearance at hearings.) Rates suggested. Salt mackerel and herring to be put on the free list. The highest duty which the trade can stand is the 1 cent per pound on mackerel and three-quarters cent on herring provided in the act of 1909. Remarks. The proposed duties on salt fish would amount to al- most 100 per cent ad valorem. Such a high duty would ruin the industry. The duties proposed are also far too high for revenue purposes. Witness: The Norwegian Minister to the United States, letter transmitted by Hon. Charles E. Hughes, Secretary of State. (Brief; no appearance at hearings.) Rates suggested. The writer desires that salt fish remain on the free list. Remarks. The United States produces only a part of the salt fish necessary to supply the demand ; domestic production will always be limited because of its nature. Salt fish is a necessary food for the working classes. The proposed duties are such as to make importations from Xor- way practically impossible. Hearings: Page 3014. Witness : United States Senator Frederick Hale, representing some of the herring packers of Maine.' Rates suggested. The witness proposed to change the wording of paragraph 719 as follows : On line 3, page 88. after the words " ad valorem," insert the words " smoked herring, skinned or boned, 2 cents per pound." In line 5, page 88, strike out the words " herring skinned," so that the para- graph will read: Salmon, pickled, salted, smoked, kippered, or otherwise prepared or pre- served, 25 per cent ad valorem ; finnan haddie, 25 per cent ad valorem ; smoked herring, skinned or boned, 2 cents per pound ; fish, dried, salted, or unsalted, If cents per pound ; fish, skinned or boned, in bulk or in immediate containers, weighing with their contents more than 30 pounds each, 2^ cents per pound, including the weight of the immediate container with the contents. Remarks. The witness described this as " a technical correction " but appeared to agree with, Senator Smoot, of the committee, that " really it is lowering the duty from what the House has." DIGEST OF TARIFF HEARINGS, H. R. 7456. 323 Witness : The Foreign Commerce Association of the Pacific Coast. San Francisco, Calif. (Brief; no appearance at hearings.) Comparability. The Japanese canned crab meat is of the species called " Taraba," found only in Japanese waters. American crab meat is served only fresh, the meat being too soft and the season be- ing too short for canning. There is no competition between the American fresh crab and the Japanese canned product. Rates requested. The association desires that crab meat be placed on the free list or that, at least, the duty be reduced to a reasonable basis. Remarks. The proposed duty is too high for revenue purposes. Hearings : Pages 2980-2983. Witness: Hon. Wesley L. Jones, United States Senator from Washington. Rates suggested. The following substitute is suggested : " Paragraph 718. All halibut, salmon, swordfish. and sableflsh, fresh, frozen, or packed lit ice. 2 cents a pound : Provided, That no halibut, salmon, or sablefish, fresh, frozen, or packed in ice. taken from the North Pacific Ocean or its tributary waters, shall be admitted into the United States through a foreign country, unless same shall be in bond from an American port. All other fish, fresh, frozen, or packed in ice, not specially provided for, 1 cent a pound." Insert a new paragraph after paragraph 718 : " Halibut and salmon from the waters of the North Pacific Ocean, fresh, frozen, or prepared, for shipment at or shipped from a foreign port, 3 cents per pound." Remarks. Canadian authorities have put into effect all sorts of restrictions and discriminations through their orders in council against American .fishermen and American fish, with the avowed purpose of diverting the business to Prince Rupert and then send- ing the fish over the Grand Trunk Railway to eastern markets. Tim purpose of this amendment is to protect and keep under the American flag the fishing ships in the Xorth Pacific and to encourage the shipping of fish over American railroads. This request is supported by memoranda from the Seattle Cham- ber of Commerce and the Commercial Club of Ketchikan. Hearings : Pages 2983-2988. Witness: Mr. H. C. Strong, representing the Commercial Club of Ketchikan. Alaska. Size of industry. During 1920, 258 fishing boats of American registry operated out of Prince Rupert, Canada. Comparability. Fish found off the coast of Alaska are of the highest quality found anywhere in the world. Rates requested. The witness desires that the following amend- ment to the fish paragraphs be adopted : Provided, That no fresh or frozen fish taken from the North Pacific Ocean or tributary waters shall be admitted into the United States through any for- eign country except when the same shall be in bond from an American port. Remarks. Prince Rupert is the market place for the Alaskan fishing industry. This is due to a combination of geographical and commercial circumstances, together with the support and in- tense interest of the Canadian government. Passage of the above proposed provision would transfer this American industry from Canada to Alaska. 324 DIGEST OF TARIFF HEARINGS, H. R. 7456. Alaskan ports have all the facilities for handling these fish and preparing them for the market. Statements favoring protection of the Alaskan fishing interests were submitted from Gov. Bone, of Alaska, from Mr. Herbert Hoover, United States Secretary of Commerce, and from the Com- mercial Club of Ketchikan, Alaska. PARAGRAPH 722. CRAB MEAT. WITNESSES. FAVORING PROPOSED OR HIGHER DUTIES: Letter from the Stuart Co. (Inc.) to Hon. Wesley L. Jones, Senator from Washington. Memorandum of John N. Cobb, director, College of Fisheries, University of Washington. FAVORING LOWER DUTIES : Japanese importers of crab meat. (Brief.) Hearings: Page 3016. Letter from the Stuart Co. (Inc.) to Hon. Wesley L. Jones, Sena- tor from Washington. Costs and selling prices. Wages are a large part of the cost in producing canned crabs; Washington and Oregon packers are handicapped by costs higher than Japanese. Size of industry. Alaska can produce 500,000 cases of canned crab meat annually, which is considerably in excess of domestic requirements. In the first 10 months of 1920 imports of Japanese crab meat were valued at over $2.000,000. Several Washington and Oregon packers are struggling to build up the industry. Comparability. Only the meat from the Dungeness type of crab is used, while the Japanese u e the large spider crab, which is larger and much coarser in texture. Rates suggested. On crab meat. 26 per cent ad valorem. Hearings : Pages 3016-3019. Witness : John X. Cobb, director. College of Fisheries, University of Washington. (Brief.) Costs aaid selling prices The declared value of imports of crab meat during 1920 averaged 53 cents per pound. The retail price in Seattle markets in October, 1921. was 60 cents. Size of industry. While domestic production at present is not large enough to supply the demand, given protection from Japanese imports it soon would be. There are three canneries in operation in Alaska and three more building. Canneries in Oregon and Washing- ton have canned crabs and under a favorable tariff will again do so. Domestic waters could produce annually 500.000 cases or more of Dungeness crab meat without depleting t)ie supply. Com-parability. The spider crab, the one canned in Japan, is noted for the pinkness of the claw meat, which makes it especially good for garnishing dishes. The Dungeness crab is found in abun- dance off the Alaskan coasts, and in Washington and Oregon waters. The spider crab is found in deeper water. The blue crab is packed on the eastern coast. Rates suggested. Twenty-six per cent ad valorem on crab meat. DIGEST OF TARIFF HEARINGS, H. R. 7456. 325 Remarks. If domestic production were stimulated, American business interests would benefit more than from the imports. Witnesses: Japanese importers of crab meat. (Brief transmitted at the request of the Japanese ambassador.) Costs and selling prices. The October, 1921, prices were $7.25 per dozen 1-pound cans of lobster as compared with $4 for canned crab meat. Rates suggested. The importers desire that imported crab meat remain on the free list. Remarks. Lobster, which is in the same class as crab meat, was left on the free list. The proposed duty on crab meat is prohibitive. PARAGRAPHS 724, 731, AND 778. BUCKWHEAT AND BRAN. WITNESSES, AND INTERESTS REPRESENTED. FAVORING LOWEE DUTIES : Mr. C. M. Cox, representing the St. Albans Grain Co., St. Albans, Vt. Hearings : Pages 3019-3026. Costs and selling prices. In October, 1921, the price of bran in Dakota was $9 per ton, while it was $20 in New England. Size of industry. Production of buckwheat in 1920 was 13,- 789.000 bushels, while imports were 227,000 bushels. Rates suggested. Ten cents per 100 pounds on buckwheat and bran ; $2 per ton on hay and 50 cents per ton on straw. Remarks. In New England, buckwheat is used principally as feed for hens. Bran comes in from Canada when the mills are running only part time and the domestic supply is inadequate. An ad valorem rate, based on values at the point of entry, would be unfair because of the great difference in eastern and western prices. Such a rate would cause much litigation, PARAGRAPH 726. MACARONI. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES: Mr. B. R. Jacobs, representing the National Macaroni Manufacturers' Association. Washington, D. C. The Jefferson Macaroni Co., Reynoldsville, Pa. (Brief.) The Connellsville Macaroni Co., Connellsville, Pa. (Brief.) Hearings : Pages 3026-3035. Witness: Mr. B. R. Jacobs, representing the National Macaroni Manufacturers' Association, Washington, D. C. Costs and selling prices. A recent quotation on first-grade maca- roni was 5.6 cents duty free in New York. In 1920 conversion cost in eastern United States was 3.98 cents per pound as compared with 1.65 cents in Italy. Wages in Italy are 70 to 80 cents per day as compared with $6 to $7 here. Domestic macaroni sells for about 8 cents per pound. Size of industry. In 1920 450,000.000 pounds of macaroni, valued at $45,000.000, were produced in the United States. The invest- ment in the business is about $16.250,000 and wage earners number 12,000. 7713422 22 326 DIGEST OF TARIFF HEARINGS,, H. R. 7456. Comparability. Although domestic macaroni is just as good as the imported, Italian macaroni, because of its reputation, commands a price premium of 3 cents per pound. Italians accept the domestic as a substitute for the imported only when it is impossible to get the latter. Rates suggested. On macaroni, 3.5 cents per pound ; on noodles, 4 cents per pound. Remarks. The Italian embargo has not been removed long enough to allow the present strength of Italian competition to be apparent. Witness: The Jefferson Macaroni Co., Reynoldsville, Pa. (Brief; no appearance at hearings.) Rates suggested. A duty of 3 to 3| cents per pound on macaroni is necessary to protect the industry. Remarks. The industry, which was greatly expanded during the war, when imports were cut off, is now threatened by large imports from Europe. Witness: The Connellsville Macaroni Co. (Brief; no appearance at hearings.) Rates suggested. A duty of 3^ cents per pound on alimentary pastes is absolutely just. PARAGRAPH 730. WHEAT, AND WHEAT PRODUCTS. WITNESSES, AND INTERESTS BEPEESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. W. O. Hamilton, president of the New York State Millers' Association, Caledonia, N. Y. Mr. James F. Bell, representing the Washburn-Crosby Co., Minneapolis, Minn. Mr. L. R. Moses, president of the Southwestern Millers' League, Kansas City, Mo. Mr. A. P. Husband, representing the Millers' National Federation, Chi- cago, 111. Hon. Edwin F. Ladd, United States Senator from North Dakota. REQUESTING RECLASSIFICATION : Mr. A. L. Goetzman, representing the Millers' National Federation, Min- neapolis, Minn. Hearings : Pages 3059-3060. Witness : Mr. W. O. Hamilton, president of the New York State Millers' Association, Caledonia, N. Y. Rates suggested. On a 196-pound barrel of flour, four and one- half times the duty on a bushel of wheat, plus 50 cents. Remarks. The mills in the State of New York have a capacity of about 60,000 barrels per day. Under the operation of the emergency tariff act all of them are substantially out of business except one unit operating on bonded wheat. Hearings : Pages 5068-5099. Witness : Mr. James F. Bell, representing the Washburn-Crosby Co., Minneapolis, Minn. ; also a number of northwestern and Illinois mills and the New York Millers' Association. Rates suggested. The witness is not interested in whether or not duties are put on wheat and flour. American millers are ready to compete with the world on an equal basis. But if a duty is put on DIGEST OF TARIFF HEARINGS, H. R. 7456. 327 wheat, the millers want a compensatory duty on flour. The rate on flour per barrel of 196 pounds should be five to six times that on a bushel of wheat, or four and one-half times plus 50 cents per barrel. Remarks. The witness's testimony is concerned chiefly with Title III, sections 314 and 316. dealing with drawback and bonding special provisions. The above reference is included as bearing upon the general question of flour and wheat duties. Hearings : Pages 3039-3045. Witness : Mr. L. E. Moses, president of the Southwestern Millers' League, Kansas City, Mo. dost and selling prices. High-grade flour of southwest hard wheat sells for $6.25 per barrel, packed and delivered in New York. Kansas City patent flour is worth about $7 a barrel by the sack. This is the flour sold in the United States and has to return the profit derived from the entire product, as there is not a miller in the United States who figures any profit on " feed." The lower grades of flour are exported to Europe, at prices in competition with foreign mills whatever can be got. , Rates suggested. On a 196-pound barrel of flour, four and one- half times the duty on 1 bushel of wheat plus 50 cents. A specific duty on by-products is also desired. An ad valorem duty would pro- tect American wheat, subject as it is to fluctuations, better than a specific duty if the " feed " is protected by a specific duty. On the basis of computations laid before the committee, the witness arrived at the figure of $1.21| as the proper duty on a barrel of flour and $1.51 on patent flour requiring 6 bushels and 2 pounds of wheat for its production. Remarks. Some flour sent to the United Kingdom is high grade compared with other export flour. About 50 per cent of the flour going to the United Kingdom is what is there termed " a patent " but here termed " a straight." Fifty per cent is made as an offal from what American people consume. Of the 100 per cent flour, an average of about 75 per cent of the best part is put into flour for American consumption. The additional 50 cents duty proposed is protective, not prohibi- tive. The export milling business allows the miller to keep down his overhead; thus it pays even though he derives no direct profits from that source. Under the emergency tariff (35 cents per bushel on wheat and 20 per cent ad valorem on flour) the valuation taken was that at the Canadian mill. This resulted in a bushel of wheat imported in the form of flour paying a duty of 18 cents as against 35 cents if imported as wheat. Until Canadian flour came in, the mills were running 90 per cent capacity, and after that only 62 per cent. Hearings : Pages 3045-3055. Witness : Mr. A. P. Husband, representing The Millers" National Federation, Chicago, 111. Costs and selling prices. In November, 1921, Canadian flour sold in Boston, duty paid, for $7.50, or 80 cents to $1 below what Ameri- can flour sold for. 328 DIGEST OF TARIFF HEARINGS, H. R. 7456. 8ize of industry. The milling industry is fourth in importance in the United States. Rates suggested. The federation favors a specific duty on both wheat and flour and desires that the specific duty on a barrel of 196 pounds of flour, be four and one-half times the specific duty on one bushel (60 pounds) of wheat plus 50 cents. Remarks. On an average, nearly 5 bushels of wheat are required to produce a barrel of flour. The emergency act duty of 20 per cent ad valorem on wheat products, compared with 35 cents per bushel on wheat, has not given sufficient protection and has allowed considerable imports of flour. By means of lower rates on flour from the Shipping Board, the millers are able to ship to all parts of the world. Some soft wheat lor crackers goes to Canada. The average miller does not figure on making any profits on his export business. The increased production allows him to keep down his overhead. The American trade demands the highest grade flour, while the export trade takes lower grades. Hearings : Pages 3061-3071. Witness : Hon. Edwin F. Ladd, United States Senator from North Dakota. Rates suggested. The proposed duty on flour is not high enough in relation to the duty on wheat. It should be raised to 65 cents per 100 pounds. Hearings : Pages 3036-3038. Witness : Mr. A. L. Goetzman, representing the Millers' National Federation. Rates suggested. A duty to be put on flour equivalent to that on wheat. The proposed rates of 25 cents per bushel on wheat and 50 cents per hundred on flour would be a discrimination against flour of 51 cents per barrel, since it takes 6 bushels and 2 pounds of wheat to make a barrel of family patent flour. To make a barrel of " 100 per cent flour," 4^ bushels of wheat are required. The witness asked for a duty of 25 per cent ad valorem on wheat flour, semolina, crushed or cracked wheat, bran, shorts, and middlings against pro- tection of 25 cents per bushel on wheat. PARAGRAPHS 735 AND 736. APPLES AND BANANAS. WITNESS. FAVORING LOWER DUTIES : The American Fruit and Vegetable Shippers' Association, Chicago, 111. (Brief; no appearance at hearings.) Rates suggested. Crab apples and bananas to be put on the free list. Very few crab apples are produced in the United States for commercial purposes, and practically all of the carload movement of crab apples comes from British Columbia. As no bananas are produced in this country there is no occasion for protection of an American industry. Large quantities of bananas are consumed by workingmen who are least able to pay a duty. DIGEST OF TARIFF HEARINGS, H. R. 7456. 329 PARAGRAPH 736. BANANAS. WITNESS. REQUESTING RECLASSIFICATION : The British ambassador, letter transmitted by Hon. Charles E. Hughes, Secretary of State. (Letter of August 16, 1921, in the interests of Jamaica.) Size of industry. Jamaica is normally the largest banana pro- ducing country and produces one-third of the world's consumption. Rates suggested. If a final decision is made to imposs a duty on bananas, the Government of Jamaica trusts that it will be levied pro rata on count bunches instead of as a flat rate per stem, regardless of weight and size. Remarks. The stems of Jamaica bananas are small compared with those shipped from other countries. They are divided into four classes : (a) Payable bunches, the average weight being only 48 pounds r as compared with 70 pounds, the weight of a payable bunch grown in Central America, (b) Bunches having eight hands, counted by the trade as being three-fourths of a bunch. (c) Bunches having seven hands, counted as one-half of a bunch. (d) Bunches having six hands, counted as one-fourth of a bunch. Jamaica is the only banana-producing country in which internal competition is maintained to the resultant benefit of the consumer. The cordial trade relations between the United States and Jamaica should not be disturbed. PARAGRAPH 737. BERRIES. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Edwin M. Frye. representing Maine blueberry producers, Harrington, Me. Hearings : Pages 3073-3075. Costs cmd selling prices. The average price of blueberries for the last three years has been 16 cents per quart as compared with 6 and 7 cents in 1909. In 1920, canned blueberries sold at $9.50 per dozen Xo. 10 cans as compared with $4.50 in 1909. Size of industry. The estimated value of canned blueberries in three Maine counties in 1920 was $1,440,000. The farmers are just learning to cultivate blueberries successfully. Rates suggested. The witness asks for 25 per cent ad valorem on canned blueberries and 1^ cents per pound on the raw. Remarks. A bushel of blueberries weighs 42 pounds, and the pro- posed duty of 1 cent per pound is equivalent to 1^ cents per quart. The price 'has increased since 1909, so that the ad valorem equivalent of the proposed duty on raw berries is less. Canadian berries are raised on Crown lands on which no stumpage is charged, while blueberry land in Maine varies in value from $4 to $100 per acre. 330 DIGEST OF TARIFF HEARINGS, H. R. 7456. PARAGRAPH 738. CHERRIES. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Hon. Wesley L. Jones, United States Senator from Washington. FAVORING LOWER DUTIES : Mr. James A. Rheinstrom, representing the Rheinstrom Bros. Co., Cincin- nati, Ohio. Hearings: Page 3076. Witness : Senator Jones, of Washington. Rates suggested. On cherries, fresh or in brine, 2 cents per pound. Hearings : Pages 3076-3078. Witness : Mr. J. A. Rheinstrom, representing the Rheinstrom Bros. Co. Costs and selling prices. In February, 1921, the price of imported preserved Italian cherries was $3.25 per gallon in 50-gallon barrels. Comparability. Foreign cherries are smaller and have a special R(&z$ suggested. The witness opposes the proposed duty of \\ cents per pound on raw cherries the raw material of his industry and suggests a duty on the finished article of 1 cent per pound and 35 per cent ad valorem, as in the Payne- Aldrich Act. Remarks. It is claimed that a duty on the raw material will make it impossible to manufacture maraschino cherries in this country in competition with imports of the finished product. Manufacturers are unable to obtain domestic cherries of the smaller varieties, which can be used to better advantage. PARAGRAPHS 740, 745. 746, 748, AND 749. PRESERVED FRUITS. WITNESS, AND INTEREST REPRESENTED. FAVORING IXUVER DUTIES : Mr. Mario Narizzano. representing the Causse Manufacturing & Importing Co., packers of glac6 fru'ts, Boundbrook, N. J. Hearings : Pages 3078-3080. Costs and selling prices. French glace cherries are being imported and sold at 25 cents per pound. This is at least 7 cents below the American cost of production. Size of industry. The company's plant employs from 75 to 100 persons. Rates suggested. Fruits in brine to be put on the free list and a duty of at least 1 cent per pound plus 35 per cent ad valorem to be put on prepared fruits. Remarks. The witness indorses the stand of Mr. J. A. Rheinstrom on cherries. The American glace fruit industry was able to survive under the duties of the 1913 act only because of European war con- ditions. DIGEST OF TARIFF HEARINGS, H. R. 7456. 331 PARAGRAPH 740. CITRON AND CITRON PEEL, ORANGE AND LEMON PEEL, CRUDE OR IN BRINE. ' *, . WITNESS, AND INTERESTS REPRESENTED. REQUESTING RECLASSIFICATION : Mr. R. U. Delephena, representing R. U. Delephena & Co. and La Manna, Azena & Farnan, New York City. Hearings : Pages 1230-1231. Witness : Mr. R. U. Delephena, representing R. U. Delephena & Co. and others. Rates suggested. The witness pointed out that citrons are shipped in a saline solution and when dried and ready for use have shrunk 20 per cent. Consequently, a differential of at least 4 cents per pound between the crude and the finished product is requested, to retain the preparation of the finished product in this country. The witness thinks that paragraph 740 was intended to read : Orange and lemon peel, crude or in brine, 2 cents per pound ; candied or otherwise prepared or preserved, 4 cents per pound. PARAGRAPH 742. GRAPES. WITNESS, AND INTEREST REPRESENTED. FAVORING LOWER DUTIES : The New York Fruit Exchange. (Brief; no appearance at hearings.) Rates suggested. Almeria grapes are imported from Spain in air- tight barrels containing about 40 pounds. The cost of production and delivery in New York is about $4 per barrel. It is urged that a higher duty would restrict imports. The consumer would be forced to pay luxury prices for an article now within reach of the masses. Remarks. The foregoing summarizes the reference to grapes in a lengthy discussion of imported vegetable foodstuffs generally. PARAGRAPH 742. CURRANTS. WITNESSES. FAVORING LOWER DUTIES : The Dried Fruit Association of New York. (Brief.) The W. H. Marvin Co., Urbana, Ohio. (Brief.) Witness: The Dried Fruit Association of New York. (Brief; no appearance at hearings.) Size of industry. Experiments in growing currants in California and in the Southern States have met with so little success that buyers have been unable to obtain samples and prices. Rates suggested. A reasonable increase in duty would be one-half cent per pound; anything more would mean a duty equal to 50 per cent ad valorem if currants should go back to their prewar price of 4 cents per pound. Remarks. The same rate should apply to currants imported in their original condition and to "Greek cleaned." The latter also have to be recleaned in the United States. 332 DIGEST OF TARIFF HEARINGS, H. R. 7456. Hearings : Pages 3080-3081. Witness : The W. H. Marvin Co., packers of cleaned currants and mincemeat, Urbana, Ohio. (Brief.) Costs and selling prices. The present price of currants, c. i. 'f. New York, is 10 to 15 cents per pound compared with a prewar price of 4 to 6 cents. Size of industry. Currants are not successfully grown in the United States, although attempts to grow them have been made in California and in the Southern States. Rates suggested. On raisins, 3 cents per pound; on currants, in original condition, 1^ cents per pound ; cleaned, in bulk packages, 2 cents per pound; cleaned, in cartons or shelf packages, 3 cents per pound. Remarks. The duty on cleaned currants should be higher than on uncleaned ; that on package goods should be still higher in order to protect domestic cleaners and packers. Since, in contrast to the case of raisins, there is no domestic cur- rant growing industry to protect, the duty on currants should be lower than on raisins. Currants, as well as raisins, are necessary for satisfactory mincemeat, plum pudding, fruit cake, etc. The proposed 2| cents per pound will be prohibitive if currant prices recede to the pre-war basis. PARAGRAPH 743. LEMONS. INTEBEST REPBESENTED. FAVORING LOWER DUTIES : Brief presented by the New York Fruit Exchange. Hearings : Pages 3084-3088. Costs and selling prices. The average delivery cost of imported lemons from Sicily to New York is $1.48 per box and to Indianapolis $2.30. At present (August 29, 1921) California lemons are selling at from $4.50 to $5 per box and imported lemons at from $2.50 to $3.50 per box. Rates suggested. The exchange opposes the proposed increase in duty from 1 cents to 2 cents per pound as giving California pro- ducers a monopoly and allowing them to fix high prices. The duty should not be increased above 75 cents per box. PARAGRAPH 743. GRAPEFRUIT. WITNESSES, AND INTEBESTS BEPRESENTED. FAVORING LOWER DUTIES : Mr. John D. Potts, representing the Isle of Pines Citrus Fruit Growers, Glen Ridge, N. J. The Isle of Pines Chamber of Commerce, Nueva Gerona, Isle of Pines, West Indies. Hearings : Pages 3089-3094. Witness : Mr. John D. Potts. Costs and selling prices. In 1920 the growers' cost of grapefruit delivered in New York was $4.21 per box. In the same year, the New York price was $4.85 per box, leaving a margin of 64^ cents to cover cost of fertilizer and labor in orchard. DIGEST OF TARIFF HEARINGS, H. R. 745G. 333 Size of industry. Over $100,000 invested by one American in one orchard. The total American investment exceeds $2,000,000. Rates suggested. The proposed duty, allowing for the 20 per cent Cuban reciprocity deduction, equals 56 cents per box, which would act as an embargo. Remarks. The duty on grapefruit is not needed to protect do- mestic growers in Florida, because the bulk of the imports comes in during August, September, and early October, before Florida begins to ship in quantities. The Florida producers have a considerable ad- vantage in freight rates to New York and Chicago. Witness : The Isle of Pines Chamber of Commerce, Xueva Gerona, Isle of Pines, West Indies. (Brief; no appearance at hearings.) Costs and selling prices. In 1920, the cost of picking, packing, freight to New York, and duty averaged about $3.75 per box. The cost of raising is 75 cents per box and the average commission 35 cents, making a total cost of $4.85. The average selling price in 1920 was $3.50 per box, showing a loss of $1.35 per box. Size of industry. In 1920, Florida shipped 5.000,000 boxes of grapefruit as compared with 200,000 from the Isle of Pines and about the same amount from Cuba. Rates suggested. The brief protests against the proposed duty of 1 cent per pound, which would mean an increase from 28 to 80 cents duty per box. Remarks. The Isle of Pines and Cuba grapefruit is shipped from six weeks to two months before the Florida crop. As soon as Florida begins to ship, the Isle of Pines stops shipping on account of the duty and high freight. The proposed duty will be prohibitive, so that no revenue will be derived from it. PARAGRAPH 743. LIMES. FAVORING PROPOSED OR HIGHER DUTIES : Mr. William J. Matheson. New York. (Brief; no appearance at hearings.) Costs and selling prices. In Florida, wages are $2.50 and $3 per day and other things in proportion. The growers in the West In- dies, the principal source of imported limes, pay on an average 25 cents per day or less. Their water transportation is cheaper than, domestic rail transportation. Rates suggested. On limes, 2 cents per pound. Remarks. If a duty of 2 cents per pound on lemons is justifiable, an equal duty on limes is much more so. That rate would not be prohibitive, but would help Florida growers to reduce their present losses. PARAGRAPH 744. OLIVES. WITNESS. AND INTEREST REPRESENTED. FAVORING LOWER DUTIES : Mr. H. C. Newcomb, representing the Spanish Green Olive Importers' Asso- ciation. Hearings : Pages 3094-3098. Rates suggested. The rate on green olives in brine should not exceed 15 cents per gallon, having regard to the welfare of the 334 DIGEST OF TARIFF HEARINGS, H. R. 7456. domestic packing industry and the aim to produce the greatest revenue. Remarks. There is no domestic industry able to furnish either of the varieties of green olives imported; the witness regards the pro- tection asked for by the California ripe olive industry as unfair to American industry and consumers. Cases of poisoning by ripe olives have been reflected in a reduced consumption of both ripe and green olives ; it has not been made plain that Spanish green olives, owing to the different method used in preserving them, are free from this danger. If the old, long-standing rate of 15 cents per gallon were restored it is estimated that it would bring in $1,000,000 revenue from Spanish olive importations. PARAGRAPH 746. PINEAPPLES. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. George McClellan, representing the Hawaiian Pineapple Packers' Asso- ciation. FAVORING LOWER DUTIES : Mr. W. A. Rodenberg, Representative from Illinois, and Mr. Harold Knut- son, Representative from Minnesota. (Joint brief.) Mr. Victor Elting, representing the West Indies Fruit Importing Co. Hearings : Pages 3105-3107. Witness: Mr. George McClellan, representing the Hawaiian Pine- apple Packers' Association. Cost and setting prices. 'The, average wholesale price per crate is $4.50. Rate suggested. The rates to remain as in the Fordney bill with the addition of a special provision for pineapples in crates or other containers as follows: "Fresh pineapples in crates or other con- tainers, 11 cents per cubic foot." This rate would be practically equivalent to $7.50 per 1,000. Remarks. While agreeing with the representative of the im- porters that a cubic-foot provision for pineapples in crates would be desirable, the witness maintained that the trade could stand the pro- posed rates. Witnesses : Mr. W. A. Rodenberg, Representative from Illinois, and Mr. Harold Knutson, Representative from Minnesota. Rates suggested. The duty on canned pineapples, instead of being increased 300 per cent (to 3f cents per pound) above the present duty of 20 per cent ad valorem, should be reduced. - Remarks. The proposed duty on canned pineapples was increased to 3f cents by amendment on the floor of the House. The principal beneficiary of this increase would be the Hawaiian Pineapple Co., which at the present time is making large profits. The proposed duty would tend to give the Hawaiian canners a monopoly and increase the price to consumers. Not all of the Ha- waiian producers and canners are in favor of the increase. Hearings : Pages 3099-3105. Witness: Mr. Victor Elting, representing the West Indies Fruit Importing Co. DIGEST OF TARIFF HEARINGS, H. R. 7456. 335 Size of industry. The production of pineapples in 1920 and 1921 was as follows : Cuba. Florida. Porto Rico. 1920 Crates. 91S.944 Crates. 70,500 Crates. Ho, 000 1921 1,010 000 40,500 160,000 Kates suggested. Fresh pineapples to be put on the free list or else be put back on the basis of the act of 1913, with the cubic foot and not the piece as the basis. Remarks. The witness objects to the piece basis of computing the duty because (1) the duty increases as the value per crate decreases, (2) the cost of administration would be excessive, and (3) the neces- sary delay would involve loss by spoilage. The proposed rate, if applied to the 1921 crop, would show an average duty of $0.256 per crate as against $0.1176 under the act of 1913. This would be an increase of 117f per cent, which would discourage the industry and seriously affect American transportation interests, manufacturers of supplies, importers, dealers, and the consuming public. The Porto Rican and Florida crops are not adequate for American needs. PARAGRAPH 748. GLACE FRUITS. FAVORING PROPOSED OR HIGHER DUTIES : Townsend's California Glac Fruits Corporation, San Francisco, Calif. (Brief; no appearance at hearings.) Costs and selling pieces. French labor is much cheaper than Cali- fornian; wages of women in France are about 40 cents per day of 10 hours, compared with domestic wages of $16 per week of 48 hours. Wages of men in France are 80 to 85 cents per day of 10 hours, as against $4.50 for 8 hours in California. The rail rate from Cali- fornia to Xew York is $6.16^ per hundred weight, as compared with about $1.25 per hundred weight from France. Rates suggested. On glace fruits, 8 to 10 cents per pound. PARAGRAPH 750; AND ALSO PARAGRAPH 50. FLAXSEED AND LIXSEED OIL. WITNESS. FAVORING PROPOSED OR HIGHER DUTIES : Spencer Kellog & Sons (Inc.), Cincinnati, Ohio. (Brief; no appearance at hearings. ) Costs and selling prices. Average operating costs in the best equipped mills in this country are 50 cents per bushel, as compared with 25 cents per bushel in Europe. This means a difference in cost of 10 cents per gallon of oil. Size of industry. In 19021909, the average acreage of flaxseed in this country was 2,750,000. In 1914-1920 this had declined to 1,684,- 000, while the requirements of oil had risen from 40,000,000 gallons 336 DIGEST OF TARIFF HEARINGS, H. R. 7456. to 70,000,00 gallons? The annual volume of business approximates $100,000,000. Rates suggested. On linseed oil, 25 cents per gallon. Remarks. Figuring 2^ gallons of oil per bushel of seed, the pro- posed tariff of 30 cents per bushel would be equivalent to 12 cents per gallon on oil. To this should be added 10 cents for the difference in labor costs and 3.28 cents for the advantage in ocean freights from Europe. Unless a proper adjustment is made between the duties on the oil and on the seed, the fiaxseed-crushing industry is doomed. PARAGRAPHS 751 AND 752. BULBS, SEEDLINGS, ETC. WITNESS, AND INTERESTS REPRESENTED. REQUESTING RECLASSIFICATION : Mr. James Hutchinson, representing the Society of American Florists and Ornamental Horticulturists; address, New York City. Hearings: Pages 3108-3110. Comparability. The witness thinks that the American-valuation plan would be impracticable in this connection because of the lack of similar domestic products. Rates suggested. Paragraph 751 should be changed to read: Tulip and narcissus bulbs and lily of the valley pips, $2 per 1,000; hyacinth bulbs. $4 per 1,000; lily of the valley clumps, $10 per 1,000; crocus bulbs, $1 per 1,000 ; lily bulbs, $6 per 1,000 ; gladioli bulbs, $5 per 1,000 ; all other bulbs, roots, root stocks, corns, tubers, and herbaceous perennials, which are imported for horticultural purposes, 20 per cent ad valorem ; cut flowers, fresh or pre- served. 25 per cent ad valorem. And 752 changed to read: Seedlings and cuttings of Manetti, Multiflora, Briar, Rugosa, and other rose stocks, 3 years old or less, $2 per 1,000 stocks; rose plants, budded, grafted, or own roots, $40 per 1,000 plants; cuttings, seedlings, or grafted on budded plants of other deciduous or ornamental or evergreen trees, shrubs, or vines, including greenhouse plants, 20 per cent ad valorem. Above all, the duty should not be ad valorem when it can be made specific. Remarks. It is claimed that the proposed change would bring in a larger revenue and would not embarrass the industry as much as the rates and wording of the Fordney bill. NUTS. PARAGRAPH 754. ALMONDS. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. T. C. Tucker, representing the California Almond Growers' Exchange; address, San Francisco, Calif. FAVORING LOWER DUTIES : Mr. G. W. R. Wallace, representing the Associated Shelled Nut Interests; address, Chicago, 111. Hearings: Pages 3111-3135. Witness : Mr. T. C. Tucker. San Francisco, Calif. Costs and selling prices. In 1920 the cost of production in Cali- fornia of unshelled almonds, including interest on capital, was 19.4 DIGEST OF TARIFF HEARINGS, H. R. 74-56. 337 cents per pound, this entailing a loss of 9.4 cents per pound en some varieties and 12 cents on others. In Europe, costs are 3.6 cents per pound. In Spain, labor costs 25 to 35 cents per day and freight is one-third to one- fourth of domestic rates. In another place in his testimony the witness gave production cost in 1920 as just over 19 cents per pound plus freight 2 cents; anything in addition to that in price would be profit. In 1920, California growers sold part of their crop for 10 cents per pound for some varieties and 7 cents for others. Size of industry. Membership of the association, representing 85 per cent of the almond crop, is nearly 4,000. More than 100,000 acres of almonds are planted, about three-fourths not yet in bearing. The investment is something over $50,000,000; about 20,000 white laborers employed seasonally. The average annual production in California prior to 1919 was about 2,000 tons ; in 1919, 7,500 tons, and in 1920. 6,000 tons. Kates suggested. Five cents per pound on unshelled almonds and 15 cents on shelled are claimed as being absolutely necessary for the protection of the industry. The difference in the* cost of production here and in Europe is 8 cents on unshelled almonds and 24 cents on shelled. Eighty per cent of the money spent on almonds is for shelled. tiemarks. The present domestic bearing is sufficient to supply 20 to 25 per cent of the domestic consumption. Domestic production will be able to supply the entire domestic demand when present acre- age comes into bearing. The total Old-World production is estimated at 750.000.000 pounds. The association also submitted an illustrated publication entitled "Shall the Almond Industry Perish"? together with letters and telegrams supplementing the arguments used. Hearings: Pages 3135-3138. Witness: Mr. G. W. R. Wallace, representing the Associated Shelled Xut Interests. Itates suggested. On unshelled almonds. 3 cents per pound : on shelled. 6 cents. Remftfkg. Importers are particularly interested in the rate on shelled almonds and walnuts since most are thus imported for use by confectioners. California almonds are too woody and lacking in flavor to permit their use in confectionery, while California walnuts are the best in the world. PARAGRAPHS 754, 755, AND 758. ALMONDS, FILBERTS. AND WALNUTS. WITNESSES, AND INTERESTS REPRESENTED. FAVORING LOWER DUTIES : Mr. E. B. Hutchinson, representing the Dried Fruit Association of New York, New York City. Mr. Walter C. Hughes, representing the National Confectioners' Associa- tion, Chicago, 111. Hearings: Pages 3139-3153. Witness: Mr. E. B. Hutchinson, New York City, N. Y. Costs and setting prices. The average price of shelled almonds in 1920 was not more than 30 cents per pound. 338 DIGEST OF TARIFF HEARINGS, H. R. 7456. Size of industry. The estimated capital investment of manufac- turing confectioners, chocolate manufacturers, bakers, and others using almonds, is $750.000,000, as compared with $50,000.000 invested in growing almonds. The manufacturers employ 420.000 persons, as compared with 50,000 employed by the growers. Rates suggested. Almonds in the shell, 4 cents per pound ; shelled almonds, 6 cents; filberts in the shell, 3 cents; shelled filberts, 6 cents. These rates, while about a 50 per cent increase over present rates., would not restrict imports and would provide a considerable increase in revenue. Excessive rates of duty would tend to lower importations and to decrease revenues. Remarks. The witness claimed that domestic producers could not produce nuts either in sufficient quantity or of high enough quality to supply domestic requirements in shelled walnuts and almonds. He presented various arguments in opposition to California demands for higher duties. It is claimed that California produces only enough to supply one-ninth of the domestic consumption of almonds. The association submitted a photographic copy of a letter ad- dressed by Mr. J. C. Tucker, manager of the California Almond Growers' Exchange, to Bevan & Co., Malaga, Spain. The letter stated, in effect, that California does not deal to any extent in shelled almonds, this being held to prove that there is no justification for an increase in the duty on shelled almonds from 4 to 15 cents per pound. Hearings : Pages 3153-3158. Witness : Mr. Walter C. Hughes, representing the National Con- fectioners' Association, Chicago, 111. Size of industry. The association represented includes 725 manu- facturers of candy. The investment in the industry is about $750,- 000,000. Comparability. California shelled almonds and Avalnuts have proved unsatisfactory to confectioners. Rates suggested. On almonds, not shelled. 4 cents ; shelled, 6 cents per pound On walnuts, not shelled, 3 cents per pound; shelled, 6 cents per pound. Remarks. Even if the production of almonds in California is in- creased in the next 10 years in the same proportion as in the past, the 1929-30 crop will amount to only 20,000,000 pounds, which is far short of domestic requirements. \ r ery few shelled almonds are produced in California, most of the California crop being sold in the shell. PARAGRAPH 756. COCONUTS. WITNESSES, AM) INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Franklin Baker, jr.. representing manufacturers of domestic shredded coconut. The Coconut Growers' Association of Porto Rico. FAVORING LOWER DUTIES : Mr. E. W. Broom, representing importers of Ceylon desiccated coconut. Hearings : Pages 3160-3164. Witness: Mr. F. Baker, jr., representing manufacturers of domestic shredded coconut. DIGEST OF TARIFF HEARINGS, H. R. 74-56. 339 Costs and selling prices The witness gave his labor charge as 3| cents per pound : his total factory charges. 5 cents per pound, and total cost, 15 cent's per pound. The present duty-paid price of im- ported shredded coconut is 11^ cents and of the domestic 16 cents. It is only because of the better quality of the domestic that producers secure any business. Size of industry. 'Several million dollars are invested in the in- dustry and nearly 2.000 persons are employed. The United States imported, in 1920, 90,000.000 pounds of nuts and about 33,000,000 pounds of desiccated nuts. Rates suggested. Six cents per pound on imported shredded coco- nut, without being compelled to pay a duty on coconuts. Remarks. The lower cost of production in Ceylon results from cheaper raw material and labor. It takes about 3 nuts to make 1 pound of shredded coconut, hence the request for an addition to the specific protective duty of three times the duty on the raw material. Witness: The Coconut Growers' Association of Porto Rico. (Brief; no appearance at hearings.) Costs and selling prices. From 40 to 50 trees are planted per acre. When in full bearing, the average value of the production per tree is about 50 cents. The cost of bringing an acre into bearing has advanced from $100 in 1913 to $250 to-day. The average gross return per acre is about $50, which leaves practically nothing as a return on investment. Size of industry. In Porto Rico, over 9,000 acres are planted in coconuts, 80 per cent of which have been developed on plots of from 40 to 50 acres. The present production in Porto Rico is about 17,000,000, all of which are marketed in the United States. This is about one-fourth of all the coconuts in the shell sold here. Rates suggested. On coconuts in the shell. 2 cents each. Remark*. Workers in Porto Rico have been organized by the American Federation of Labor, which has resulted in higher wages. An eight-hour law was passed, also a child-labor law prohibiting employment of children under 16 years of age. Porto Rican growers must compete with those in other West Indian islands and South American countries where land and labor are cheaper. Because of coastwise shipping laws, freights are much higher from Porto Rico than from competing countries ; for example, the rate from Trinidad to Xew York is $3 per 1,000 nuts, as compared with $10 from San Juan to Xew York. Hearings : Pages 3159-3160. Witness: Mr. E. W. Broom, representing importers of Ceylon desiccated coconut. Costs and selling prices. While conceding that wages are lower in Ceylon, the witness stated that labor is much less efficient there and that less labor-saving machinery is used than in the United States. The current market value of Ceylon shredded coconut is about 9 cents per pound, in bond ex dock New York. Size of industry. About 1,000 persons are employed in the domestic shredding factories. Rates suggested. A duty of 3 cents per pound, which would represent a 50 per cent increase over current rates. , This would meet 340 DIGEST OF TARIFF HEARINGS, H. R. 7456. the need for revenue, but a duty as high as 4 cents (as in the bill) would probably work hardships and might decrease revenues by cut- ting down imports. PARAGRAPH 757. PEANUTS. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Neyle Colquitt, representing the United Peanut Association of America, Washington, D. C. Mr. P. D. Bain, representing the Peanut Association of America. Nor- folk, Va. Mr. Edward Eve, Charleston, S. C. Mr. J. B. Pinner, representing the peanut industry of Suffolk, Va. FAVORING LOWER DUTIES : Mr. John B. Gordon, representing peanut crushers and vegetable oil re- finers, Alexandria, Va. Mr. W. H. Kelly, representing the Kelly Co. The Foreign Commerce Association of the Pacific Coast. (Brief.) Hearings : Pages 3179-3180. Witness: Mr. Neyle Colquitt, representing the United Peanut Association of America. Costs and selling prices. The average production cost of peanuts in this country is about 9 cents per pound. Size of industry. The investment in farm lands and implements used for growing peanuts is approximately $100,000.000, and about 131,500 persons are employed. Rates suggested. Since the cost of cleaning and preparing un- shelled peanuts for the market is about equal to the cost of shelling, the duty on shelled and unshelled peanuts should be the same. The asso- ciation asks 4 cents per pound on shelled and unshelled peanuts and 5 cents on products, including peanut butter, peanut confections, etc., of peanuts not otherwise specified. Hearings : Pages 3180-3188. Witness : Mr. P. D. Bain, representing the Peanut Association of America. Costs and selling prices. The average farm cost of domestic pea- nuts is from 7 to 8 cents per pound, and the wholesale price is from 9 to 9^ cents delivered in the markets. Rptes suggested. Four cents per pound on shelled and unshelled peanuts and 5 cents on peanut products. The cost of cleaning and preparing peanuts for market being the same as the cost of shelling, the rate should be the same on each. Remarks. As only a small percentage of imported peanuts is used for oil, while there is competition between crushers and shellers for domestic peanuts, imports of peanut oil and of peanuts for crushing would compete with domestic peanuts. There are approxi- mately 9,000,000 acres in the South available for peanut production. The peanut is especially desirable in the boll weevil sections to replace cotton. Hearings : Pages 3198-3200. Witness: Mr. Edward Eve, Charleston, S. C. Rates suggested. Four and a half cents per pound on peanuts would be adequate. DIGEST OF TARIFF HEARINGS, H. R. 1456. 341 Remarks. The arguments of the refiners and importers for free importation of oriental vegetable oils and oil materials are not valid. Free imports would depress both the European and domestic markets. Hearings : Pages 3194-3198. Witness: Mr. J. B. Pinner, representing the peanut industry, Suffolk, Va. Costs and selling prices. Prices have been so low as to cause great distress among peanut producers. Size of industry. About 110,000 farmers are producers of peanuts and about 10,000 are engaged in milling. The investment amounts to about $108,000,000. Production in Virginia in 1920 was 4,000,000 bags (70 to 85 pounds per bag). The total production in the United States is between 30,000,000 and 40,000,000 bushels. Rates suggested. Four cents per pound for shelled and unshelled peanuts. Xo difference in rates is asked, because the cost of putting shelled and unshelled peanuts on the market is the same. Remarks. Imports in 1920 were 120,000,000 pounds of shelled peanuts and 12,000,000 pounds of unshelled. A great portion of the South has been forced into peanut produc- tion by the ravages of the boll weevil. Hearings : Pages 3168-3179. Witness: Mr. J. B. Gordon, representing peanut crushers and vegetable-oil refiners. Rates suggested. The proposed rates of 3 cents on unshelled and 4 cents on shelled peanuts would prohibit their importation for crushing. There should be a provision for free importation of peanuts to be used for crushing. Remarks. Four cents on shelled peanuts would mean 10 cents per pound on the resultant oil. as against the normal value of only 5| to 7 cents. Free importation of peanuts for crushing would not adversely affect the domestic grower, because only a very small per- centage of domestic nuts is crushed, growers being able to get more by selling nuts for edible purposes. If the domestic crusher is put out of business it would be bad for the. grower, who would lose part of his market for a surplus in years of large crop. Domestic crush- ers can not pay as high prices for domestic peanuts as can the peanut shellers. as peanut oil is practically interchangeable with cottonseed oil. The latter is a by-product and can be sold very cheaply. Hearings : Pages 3164-3167. Witness : Mr. W. H. Kelly, representing the Kelly Co. Rates suggested. The proposed rates of 3 cents on unshelled pea- nuts and 4 cents on shelled would prohibit all but a few imports. Remarks. Most of the peanuts imported for food purposes are large selected 28-30 count Chinese peanuts; not enough of these are grown here to satisfy the demand for the large kernels used in the manufacture of peanut brittle and peanut butter. Hearings : Pages 3188-3194. Witness : The Foreign Commerce Association of the Pacific Coast. (Brief.) 77134_22 23 342 DIGEST OF TARIFF HEARINGS, H. B. 7456. Costs and selling prices. There is but little difference in the de- livered price of foreign and domestic nuts. The oriental peanuts in June, 1920, cost 7| cents c. i. f. Pacific ports and, with duty added, 8 cents ; as much as domestic peanuts in the South. Comparability. American buyers prefer the domestic peanuts to Japanese. Rates suggested. On peanuts, not shelled, three-eighths of 1 cent per pound; shelled, three-fourths of 1 cent. Remarks. The domestic production has never been sufficient to meet the rapidly expanding requirements. Losses to domestic producers have been due to general conditions of supply and demand ; not to the competition of imports. The proposed duty is virtually an embargo. By giving peanut products a lower duty than raw products the proposed rate will seriously discriminate against American manu- facturers. PARAGRAPH 758. WALNUTS AND PECANS. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. C. Thorpe, representing the Walnut Protective League. FAVORING LOWER DUTIES : The Foreign Commerce Association of the Pacific Coast. (Brief.) Hearings : Pages 3200-3205. Costs and selling prices. The contention for a higher duty is based solely on differences in labor costs here and in competing countries. The labor cost here is 9.73 cents per pound; in France, 2 cents; in China, slightly over one-half cent. Freight charges of domestic producers to eastern consuming centers are three times those on foreign nuts. Size of industry. The investment in the industry exceeds $110,- 000,000. The annual crop value is over $12,000,000. More than 90,000 acres are planted to walnuts, of which 65,000 acres are in bearing. Domestic production supplies over 70 per cent of the country's consumption of unshelled walnuts, California's produc- tion in 1920 being 56,000,000 pounds as against a total importation of 38,700,000 pounds, shelled and unshelled. Rates suggested. Four cents a pound on unshelled, 12 cents on shelled, these being the lowest under which the industry can con- tinue on a prosperous basis. Remarks. Unshelled walnuts comprise 90 per cent of the do- mestic production. There are 200,000 acres in California, now plant- ing annual crops, ideally suited for the production of walnuts. " A tree has to be 10 years old before it makes what would be considered a profitable production." The unshelled walnut is, and will always be, the principal product. Hearings: Pages 3205-3209. Witness : The Foreign Commerce Association of the Pacific Coast. (Brief.) Costs and selling prices. Foreign growing costs are less than domestic, but the marketing costs are so much more that foreign nuts delivered in American markets cost nearly as much as domestic. Size of industry. Domestic production has increased from DIGEST OF TARIFF HEARINGS, H. R. 7456. 343 18.700,000 pounds in 1909 to 56.096.000 pounds in 1919. but is still short of requirements. Imports in 1919 were 21,000.000 pounds. Comparability, The domestic nuts are clean looking, thin shelled, full meated, and fine flavored and command a premium over the imported. The latter are hard shelled and not as clean. Rates suggested. The association urges that the duty be not higher than & cents per pound on unshelled walnuts and 4 cents on shelled. Remarks. The imported nuts cater to the demands of confec- tioners, bakers, and manufacturers, who can not afford to pay the higher prices for domestic nuts. PARAGRAPHS 760, 763, AND 1620. OIL SEEDS. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Hon. Edwin F. Ladd, United States Senator from North Dakota. Mr. Charles W. Holnmn. representing the National Board of Farm Organi- zations, Washington, D. C. FAVORING LOWER DUTIES : Mr. P. S. Grogan, representing the Interstate Cottonseed Crushers' Association. Mr. R. F. Crow, representing the Interstate Cottonseed Crushers' Asso- ciation. The Linseed Crushers' Committee. (Brief.) Mr. J. J. Lawton, representing the Interstate Cottonseed Crushers' Associa- tion. Hearings : Pages 3209-3219. Witness : Hon. Edwin F. Ladd, United States Senator from North Dakota. Costs and selling prices. The average farm price of flaxseed in- creased from $1.15 per bushel in 1912 to $1.39 in 1919 and dropped to $1.77 in 1920. Size of industry. In 1920, 23.391.000 bushels of flaxseed were produced ; in 1919, 8.427,000 bushels. Rates suggested. On flaxseed, 40 cents per bushel; on linseed oil, 3^ cents per pound. (See abstract under paragraph 50.) Remarks. The proposed rates are necessary to maintain flaxseed production in the United States, so that the domestic oil, paint, varnish, and linoleum industries will not be dependent upon uncer- tain foreign supplies of raw material. Reducing the duty on flaxseed, and to a greater extent on linseed oil, has made it possible for foreign manufacturers to export oil to this country at lower prices than American farmers and linseed-oil manufacturers can produce it. This reduction of duties has been the principal cause of smaller crops. The other important cause has been the prevalence of " flaxseed wilt." This has been overcome. Hearings: Pages 5154-5162. Witness: Mr. Charles W. Holman. representing the National Board of Farm Organizations, Washington, D. C. Rates suggested. Three-fourths of a cent per pound on cotton seed and soya beans: 2 cents per pound on copra. 344 DIGEST OF TARIFF HEARINGS, H. R. 7456. Remarks. Exports of soya beans and soya-bean oil in terms of beans from Manchuria amounted in 1911 to 1,724,000 short tons and in 1919 to 2,306,000 tons. Soya beans and soya-bean oil were diverted to Europe a year be- fore the emergency act was in force. This disproves the conten- tion that the emergency act has caused the withdrawal of American buyers from the Orient and the consequent lowering of prices of oils there. Hearings: Pages 5143-5154. Witness: Mr. Charles W. Holman, representing the National Milk Producers' Federation and the vegetable oils tariff committee of the National Board of Farm Organizations. (Brief.) Rates suggested. On copra, 2 cents per pound; on soya beans, three fourths of 1 cent per pound, and on cotton seed, one-half of 1 cent per pound. Remarks. Because of the interchangeable character of vegetable oils practically the entire supply of raw materials can be obtained in this country. At present, large quantities of cotton seed that could be used for crushing are used directly for fertilizer. (See abstract under oil paragraphs.) Hearings : Pages 5162-5163. Witness: Mr. P. S. Grogan, representing Interstate Cottonseed Crushers' Association. Size of industry. The cottonseed crushing industry has grown until in some years the crushers pay $350,000,000 for the seed. Remarks. The association previously favored duties on vegetable oils and oil bearing materials but now, in the light of experience under the emergency tariff, it favors free trade. Hearings : Pages 5163-5170. Witness: Mr. R. F. Crow, representing the Interstate Cottonseed Crushers' Association. Size of industry. In normal times the annual production of crude cottonseed oil will range from 1,200,000,000 to 1,800,000,000 pounds. Rates suggested. The association desires that vegetable oils and oil-bearing materials be put on the free list, especially soya-bean oil, peanut oil, cottonseed oil, coconut oil, palm oil, palm kernel oil, sesame oil, copra, soya beans, peanuts, and palm kernels. Remarks. Cottonseed oil is produced in such quantities that it is essential that an export market be maintained for a surplus ranging from 10 to 25 per cent. Although the total amount of cotton seed produced depends upon the demand for cotton, the proportion of seed delivered to the crush- ing mills varies with the price from 63 to 85 per cent. Crushers are thus interested in a reasonably high price for seed. Duties on oriental oils would destroy the European market for the cottonseed-oil surplus. It w r ould eliminate American buyers from oriental markets and allow European buyers to get cheaper oils to compete with the American cottonseed-oil surplus in Europe. If American buyers can import freely, these foreign oils will be taken out of edible-oil channels and into industrial channels. The withdrawal of American buyers from the Orient allowed European monopoly interests to act in concert in forcing down prices. DIGEST OF TARIFF HEARINGS, H. R. 7456. 345 Witness: The linseed crushers' committee. (Brief; no appearance at hearings.) Rates suggested. If a duty of 30 cents per bushel be put on flax- seed, the crushers ask that the duty on oil be 25 cents per gallon. Hearings : Pages 5170-5173. Witness : Mr. J. J. Lawton. representing the Interstate Cottonseed Crushers' Association. Size of industry. In 1920 the South produced 1,141,000,000 pounds of refined cottonseed oil. This constitutes 47 per cent of the total production of fats in the United States. Rates suggested. Vegetable oils and oil-bearing materials to be put on the free list. Remarks. The United States produces more cottonseed oil than there is demand for in the country. To maintain a free market in Europe for this surplus, it is necessary to have free trade in vegetable oils. PARAGRAPHS 760 AND 50, AND SECTION 316. OILS, SEEDS, ETC. Brief on flaxseed and linseed oil, prepared by the Bureau of Raw Materials for American Vegetable Oils and Fats Industries, pre- sented in behalf of paint and varnish manufacturers. Hearings : Pages 3219-3226. Rates suggested. (1) That section 316 be so amended that the rates of duty imposed on flaxseed and other oil-bearing seeds in paragraph 760 be made positive and definite by the elimination of the provision for drawback on the export of oil cake; (2) that the duty on flaxseed in paragraph 760 be reduced from 25 to 20 cents per bushel; (3) that the duty on linseed oil in paragraph 50 be reduced from 2| cents per pound to 12 cents per gallon. Remarks. A bushel of flaxseed will yield about 2^ gallons of linseed oil. Since the United States is on an exporting basis in oil cake, the duty on 2-} gallons of linseed oil should equal the duty on a bushel of flaxseed. Consequent!}^ in order to protect the American flax grower with a rate of 10 cents per gallon on oil con- tent, the rate on flaxseed should be 25 cents per bushel. Under section 316 of the bill, if oil cake derived from the extrac- tion of linseed oil from foreign flaxseed were exported, a drawback would be allowed on the value of the oil cake, which would mean a reduction in the duty on flaxseed. PARAGRAPH 761. SEEDS. WITNESSES. FA YOKING LOWER DUTIES : The Wholesale Grass *Seed Dealers' Association. (Brief.) The seed merchants of Philadelphia. (Brief.) The Louisville Seed Co. (Brief.) Hearings: Pages 3226-3238 and brief. Witness: Mr. William G. Scarlett, representing the Wholesale Grass Seed Dealers' Association. 346 DIGEST OF TARIFF HEARINGS. H. R. 74-36. Size of industry. The estimated average total consumption of grass seeds in the United States is 400,000,000 pounds, valued at be- tween $40,000.000 and $50,000,000. The outlay on these seeds re- sulted in a hay crop alone (average, 1911 to 1920) valued at $1,614,000,000. Comparability. Many of these seeds are not produced in the United States and others are not produced in sufficient quantities. Rates suggested. Grass seeds to be put on the free list. The seed dealers protest against duties being levied on field seeds, which have heretofore been free. The American farmer, particularly in his present distressing condition, should not be burdened with such a tax, the revenue from which would amount to less than $375,000. Remarks. The duty will drive the farmer to buy cheaper, weed- infested grass seed. The duty is not necessary to discourage the importation of poor seeds, since this has been accomplished for nine years under the Federal seed import act of August 20, 1912. Witness: The seed merchants of Philadelphia. (Brief; no ap- pearance at hearings.) Rates suggested. The writers protest against the proposed duties on field seeds. The revenue would amount to only about $750.000, but this would bear heavily on the farmers, who should be helped rather than further burdened. Remarks. Many of these seeds are not produced in commercial quantities in the United States while others are not produced in sufficient quantity to supply the requirements. Witness: The Louisville Seed Co. (Brief; no appearance at hearings.) Rates suggested. The writer desires that the field seeds pro- vided for in paragraph 761 be put on the free list. The duty pro- posed would burden farmers by increasing the prices on commodi- ties they have to buy. PARAGRAPH 762. COTTON SEED. FAVORING LOWEB DUTIES : The California Cotton Oil Co., Los Angeles, Calif. (Telegram to United States Senator McCumber.) Size of industry. The cottonseed industry of California now has an investment of $7.000,000. Rates suggested. Cotton seed should be specifically provided for on the free list. It is omitted in the Fordney bill and therefore will be duitable at 20 per cent ad valorem. Remarks. The only cotton seed which can be imported under the quarantine regulations of the Departnfent of Agriculture is that from the southern Imperial Valley in Mexico. About one- half of the supply comes from the Mexican side. The Mexican lands are almost all owned and controlled by Americans. DIGEST OF TARIFF HEARINGS, H. R. 745G. 347 PARAGRAPH 762. FIELD AND GARDEN SEEDS. WITNESS. AND INTEREST REPRESENTED. REQUESTING RECLASSIFICATION : Mr. Kirby B. White, representing the American Seed Trade Association. Detroit. Mich. Hearings : Pages 3238-3239. Rapes suggested. The equivalent specific rate of 6 cents per pound should be put on all other garden seed rather than 20 per cent ad valorem. Every shipment of seed has a distinctive value, which it is impossible to appraise. The trade prefers any reasonable specific rate to the ad valorem basis. PARAGRAPHS 763, 765, AND 767. PEAS AND BEANS. WITNESSES. AND INTERESTS REPRESENTED. FAVORING LOWER DUTIES : Mr. Emil S. Nordl merer, representing the Dried Fruit Association of New York, New York City. The Foreign Commerce Association of the Pacific Coast. (Brief.; Hearings : Page 3244. Witness: Mr. Emil S. Xordlinger. Xew York City, X. Y. Costs and selling pri-ces. Before the war, lentils could be bought for 3 cents per pound in Konigsberg. East Prussia, and were sold here for 5 cents per pound at retail. Rates suggested. The Payne-Aldrich rates on peas, beans, and len- tils to be retained; that is to say, beans, 45 cents per bushel (75 cents per 100 pounds) ; lentils. 45 cents per bushel (75 cents per 100 pounds) : dried peas, 25 cents per bushel (42 cents per 100 pounds) ; and split peas, 40 cents per bushel (66 cents per 100 pounds). Remarks. Peas and beans are articles of staple diet especially im- portant to the poor man, and are imported only when there is a shortage in this country. Lentils are not produced in this country, and are used by Italians and Russians. Hearings : Pages 3239-3243. Witness : The Foreign Commerce Association of the Pacific Coast. (Brief.) Size of industry. The total domestic production for 11 years ending 1920 was 128.998.000 bushels; during the same period im- ports were 13,406.000 bushels and exports 14.793.000 bushels. Comparability. Domestic buyers prefer domestic beans, which command a price premium over the imported. Rates suggested. Xot more than one-half of 1 cent per pound. Remarks. The decline in prices of beans was not caused by im- ports but by the general causes of declines in other products. The proposed duty is so hisfh that the revenue would be decreased. The duty will unnecessarily raise the price of this staple food product. 348 DIGEST OF TARIFF HEARINGS, H. R. 7456. PARAGRAPH 763. BEANS. FAVORING PROPOSED OR HIGHER DUTIES : Hon. Charles E. Townsend, United States Senator from Michigan. (Brief; no appearance at hearings.) Rates suggested. On beans, If cents per pound. Remarks. Michigan is devoting a great deal of its agricultural resources to beans' and should be heard if reduction from the pro- posed rate is favorably considered. PARAGRAPH 766. MUSHROOMS. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. A. G. Hupfel, representing mushroom growers ; address, New York City. Mr. Edward H. Jacobs, representing mushroom growers ; address, West Chester, Pa. FAVORING LOWER DUTIES : Mr. George O'Hara, representing the Associated Importers of Food Prod- ucts ; address, New York City. Hearings : Pages 3246-3249. Witness : Mr. A. G. Hupfel, representing mushroom growers. Costs and selling prices. Mushrooms can be produced for about 40 cents per pound. The prices of fresh mushrooms vary seasonably from 35 cents to $1 per pound. Rates suggested. The rate provided by the Fordney bill, 33^ per cent ad valorem ; this would equal 35 cents per pound. Remarks. The witness has turned a brewery in New York City into a mushroom plantation and claims that other brewers are con- sidering that step. The total quantity imported in the year ended June 30, 1921, was 3,732,459 pounds. Hearings: Pages 3249-3251. Witness : Mr. E. H. Jacobs, representing mushroom growers. Size of industry. Between five and six million pounds of fresh mushrooms are grown in this country. In the East alone there are at least 250 growers. Rates suggested. -The rate in the Fordney bill 33J per cent ad valorem. Remarks. Imported mushrooms are bleached white with sulphur fumes and are especially desired by the Chinese restaurant trade. Under United States law T s the domestic product can not be so treated. The growers and consumers regard this as unfair competition. Hearings : Pages 3251-3256. Witness : Mr. George O'Hara, representing the Associated Im- porters of Food Products. Costs and selling prices. The witness admits that ordinary laborers in France are paid only 2.50 francs per hour (say 20 cents on exchange of eight) and the chief workman 250 francs ($18) per week. Manure costs from $6.80 to $8.15 per ton delivered at beds. Rates suggested. The association particularly desires a specific rate of duty and suggests 4 cents per pound, including the weight of DIGEST OF TARIFF HEARINGS, H. R. 745(5. 349 the immediate container. This would equal 9.1 cents per pound on the drained mushrooms and would be all the trade can stand. Remarks. The witness takes issue with Mr. Jacobs (p. 348^ and claims that French mushrooms are not bleached. Some chefs pre- fer them to fresh mushrooms because of easier preparation and greater economy in use. He says, also, that firms who bought the domestic canned mushrooms have declared they would buy no more because of their poor quality. PARAGRAPH 768. ONIONS. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. J. B. Stambaugh, representing the National Onion Association. FAVORING LOWER DUTIES : Brief presented by the New York Fruit Exchange. Hearings : Pages 3256-3260, 3265-3268. Witness : Mr. J. B. Stambaugh, repres representing the National Onion Association. Costs and selling prices. The average domestic cost per 100 pounds, delivered at New York, without profit, is $4.63^, as compared with Spanish and Egyptian costs of $1.85. The average daily wage in the United States is $3.25 to $3.50 and in Spain 43 to 58 cents. The wholesale price was run down to 40 cents per 100 pounds in 1920. Size of industry. The capital investment in the domestic industry amounts to $55,000,000 ; about 100,000 persons are directly dependent upon an industry which furnishes 30,000 to 40,000 cars of shipping per year. Comparability. Egypt produces a larger onion than southern domestic producers have been able to grow. The Spanish onions are much like those gro\vn on the Pacific coast. Rates suggested. A rate of 1^ cents per pound would fairly rep- resent the difference in the cost of production here and abroad. In his later testimony, the witness asked for a duty of 1 cent a pound. Remarks. The emergency duty of 40 ' cents per bushel has not proved effective. Hearings : Pages 3087-3089. Brief: The New York Fruit Exchange. Costs and selling prices. The cost of Spanish onions has greatly increased. Wages have increased from 2 to 4 and 5 pesetas per day (peseta=19.3 cents at par), and packing and freight costs have doubled. An increase in the present tariff on Spanish onions would put a stop to importations. The exchange also urges that no change be made in the tariff on potatoes, onions, and other vegetables com- ing from Bermuda. These come early in the season and so compete only to a limited extent with domestic products. Comparability. Owing to the difference in quality, Spanish onions do not conflict with domestic. They are large and sweet and are seldom used for cooking purposes. Rates suggested. The 1913 rate of 20 cents per bushel of 57 pounds to be retained. 350 DIGEST OF TARIFF HEARINGS, H. R. 74,%. PARAGRAPH 769. POTATO FLOUR, ETC. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. W. P. Hartman, representing the Falk American Potato Flour Cor- poration, Pittsburgh, Pa. Hearings : Pages 3268-3273. Costs and selling prices. Raw material costs are 3.1 cents per pound; total costs, 6 cents per pound ready for shipment. Foreign potato flour is being sold at from 3^ to 3| cents per pound. Size of industry. This corporation has five plants and up to the present time has produced 5,000,000 pounds. It is capitalized at $1,000,000. Hates suggested. At least 3 cents per pound to insure the in- dustry's continued existence. The duty of 1^ cents per pound in the bill was erroneously based on a production factor of 25 per cent, whereas the correct factor is 20 per cent, which would require a duty of 2.1 cents. Remarks. Competition is mainly from Holland and Germany, where a potato of higher starch content is used. As about 2 per cent of potato flour is used to mix with wheat flour in bread making, as an improver, a small increase in the price of potato flour would hardly be reflected in the price of bread. PARAGRAPH 770. TOMATOES. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. John S. Mitchell, representing manufacturers of tomato paste, Wind- fall, Ind. FA-VORING LOWER DUTIES : The American Fruit and Vegetable Shippers' Association, Chicago. (Brief.) Mr. Charles H. Bates, representing the Southern Pacific Ra'lroad. (Brief.) Mr. Frank L. Barry, representing the Nogales (Ariz.) Chamber of Com- merce. Hearings : Pages 3280-3284. Witness: Mr. John S. Mitchell, representing manufacturers of tomato paste. Costs and selling prices. The estimated domestic cost per case of tomato paste (25 per cent tomato solid) in 1921 was $10 per case, 60 per cent of which was labor cost. Italian labor cost was 20 per cent of the domestic and the duty asked for would just cover the difference. The representative of the Italian Chamber of Commerce in New York gave $18.50 per case as the cost of the imported, but it may be expected that the normal cost of $4.62^ for the imported will soon be reached. Rates suggested. Forty-two per cent ad valorem, or 4 cents per pound, on tomato paste containing not less than 25 per cent tomato solids ; 5 cents per pound on paste containing more than 25 per cent of tomato solids, including the weight of the immediate container. Remarks. The domestic industry was built up during the war when imports of Italian tomato paste were cut off. The Italian de- DIGEST OF TARIFF HEARINGS, H. R. 7456. 351 mand in this country furnished the entire market. If the duty asked is granted, the manufacturers will have a chance to popularize the product, increase the volume of production, and bring do\vn the cost to below the 1914 level. Witness : Mr. Charles H. Bates, attorney for Mr. Epes Randolph, president Southern Pacific Railroad. (Brief; no appearance at hearings.) Kates suggested. That the duty on raw tomatoes be not materially increased from the 1913 rate. If it is desired to retain the proposed rate of 1 cent in the bill, a provision should be inserted putting tomatoes, in their natural state, on the free list from December 15 to April 10. Remarks. The proposed rate of 1 cent per pound is about 200 per cent over the present rate, which about equals one-third cent per pound. Mexican tomatoes do not compete with domestic, because they are imported from December 15 to April 10. The matter is important to the railroads of the Southwest because the proposed duty threatens to cut down their freight. Witness : The American Fruit and Vegetable Shippers' Associa- tion. Chicago. (Brief; no appearance at hearings.) Rates suggested. Tomatoes in their natural state, free. Remarks. Practically all imported tomatoes come from Mexico. These imports do not compete with the domestic product, because they come into the market earlier in the season than domestic toma- toes, those from Florida excepted. But Florida tomatoes are sold in eastern markets and Mexican tomatoes in the West. Hearings : Pages 3273-3280. Witness : Mr. Frank J. Barry, representing the Xogales Chamber of Commerce, Nogales, Ariz. Costs and selling prices. Production costs on one ranch were given as 8.533 cents per pound, selling at 8.984 cents. The selling price of Mexican tomatoes to the final consumer was said to be about 25 cents per pound retail. Rates suggested. A duty of three-eighths cent per pound, to apply between September 15 and May 15. Remarks. Mexican tomatoes are grown on the west coast of Mex- ico, to a large extent (77 per cent) by Americans, and are shipped from December to March. They are marketed largely in the West and Central States and do not compete with the summer tomato or the Florida tomato. PARAGRAPH 773. DRIED VEGETABLES. WITNESS. FAVORING HIGHER DUTIES : The Anhydrous Food Products Co., Chicago, 111. (Brief; no appearance at hearings.) Rates suggested. On dehydrated vegetables. 352 DIGEST OF TARIFF HEARINGS. H. R. 74">hing of threads and cords involves just double the amount required in the manu- facture of the yarn from which such threads and cords are made. The duty, therefore, per lea or number on the threads, twines, or cords, should be just double that on the single yarn. The proposed duty on yarns carries an additional duty of 5 cents per pound when the yarns. are boiled, bleached, dyed, or otherwise treated. It would be inconsistent not to add a similar duty for the' dyeing, bleaching, or otherwise finishing the threads, twines, or cords. It is requested that the latter portion of paragraph 1004 be changed as follows : Cents per pound. Threads, twines, cords, composed of 2 or more yarns of flax, hemp, or ramie, or a mixture of any of them, twisted or braided together, the size of the single yarn of which is not finer than 8-lea 16 Finer than 8-lea and not finer than 40-lea 16 And 1 cent per pound additional for each lea or part of a lea in excess of 8. Finer than 40-lea 53 And. in addition, on any of the foregoing threads, twines, or cords, when boiled, bleached, dyed, or otherwise treated, 6 cents per pound: Provided, That the duty on the foregoing threads, twines, and cords shall be not less than 23 per cent ad valorem. Specific duties are requested in order to differentiate between the cost of manufacturing here and abroad. When prices fluctuate, the difference in manufacturing costs here and abroad remains the same, and the only really practical duty is a specific duty, which has nothing to do with the value of the product. Hearings : Pages 3462-3463. Witness : Mr. G. F. Smith, representing the Smith & Dove Manu- facturing Co. DIGEST OF TARIFF HEARINGS, H. R. 7456. 371 Costs and selling prices. Present prices of imported yarn are nearly double what they were during the prewar period ; during the war they were from three to four times as great. Comparability. The Smith & Dove Manufacturing Co. and, the witness believes, all the other domestic manufacturers of flax yarns, are prepared to furnish satisfactory hose yarns and weaving yarns provided they can get their prices. These" firms are not furnishing such yarns to-day because foreign yarns are being imported at prices with which they can not compete. Raters suggested. In H. R. 7456 there is a differential duty of 5 cents per pound additional to gray yarns, for all yarns which have been boiled, bleached, or treated. In the case of threads, there is no differential, and it is suggested that 6 cents a pound additional be frovided on threads that are boiled, bleached, or otherwise treated, t is further requested, since the labor of converting the yarn into thread, winding it and preparing it for the market is at least double the labor on yarn, that the duty placed on the threads should be double that on the yarns, namely, 1 cent additional per lea. PARAGRAPH 1004. FLAX YARNS. WITNESSES, AND INTERESTS REPRESENTED. FAVORING LOWER DUTIES : Mr. Linus C. Coggan, representing The Eureka Fire Hose Manufacturing Co., Jersey City, N. J. ; Charles Nietlner's Son Co., Maiden, Mass. ; Win. & Chas. Beck (Inc.), Lawrence, Mass. Mr. N, R. Foster, representing The Niagara Textile Co., Lockport, X. Y. Hearings : Pages 3463-3466. Witness : Mr. Linus C. Coggan. Costs and selling price-?. Slightly more than 1 pound of boiled yarn is required to make 1 pound of linen fire hose. Size of industry. The three firms here represented produce all the unlined linen fire hose woven in the United States. Comparability. There is not grown in this country a suitable flax, neither is there manufactured a flax-line yarn suitable for making high-grade linen fire hose. Rates suggested. (1) The addition to paragraph 1004 of the words : " Provided, That flax-line yarns of 8 lea and not finer than 20 lea, imported solely for the manufacture of linen fire hose, shall be admitted free of duty." The only result of imposing a duty on flax-line yarn suitable for manufacture into fire hose is to make the American consumer pay more for his product, and hose being an ele- ment entering into building construction, such costs should be cut down. (2) If the preceding recommendation be not adopted, it is sug- gested that an ad valorem duty of 20 per cent be placed on flax-line yarns of 8 and not finer than 20 lea, rather than a specific duty. As- suming that hose now selling for $2 a pound was selling for 75 cents a pound in 1914, and that yarn now costing 75 cents a pound, without duty, costs 25 cents a pound in 1914, then if prices should recede to their pre-war level on hose and yarn, the proposed duties would be equivalent to the specific duty of 20 cents per pound on j'arn costing 25 cents per pound an ad valorem duty of 80 per cent while for- eign competitors would be paying 26 per cent or 19^ cents per pound. 372 DIGEST OF TARIFF HEARINGS, H. R. 7456. Remarks. Domestic yarn manufacturers are unable to supply the domestic demand for flax-line yarn suitable for hose purposes. Plac- ing a specific duty upon linen yarns under so broad a classification as requested by the yarn manufacturers means putting a noncom- petitive price upon flax-line yarn suitable for the manufacture of linen fire hose. (For a fuller discussion of this witness's remarks, see paragraph 1007, Hose for conducting water, etc.). Hearings: Pages 3467-3474. Witness : Mr. X. R. Foster, Lockport. X. Y. Costs and selling prices. Stating the price of 14-lea .single- bleached weft yarn under American valuation, shows how domestic manufactures of linen fabrics are affected by the rates on linen yarns. The value of such yarn at the port of entry on to-day's price would be 48 cents, and the duty proposed by H. *R. 7456 would be 16 cents, an equivalent ad valorem of 33 per cent. Comparability. Linen-yarn spinning in America is very re- stricted, and good yarns of the right character are not yet produced in sufficient quantity to supply American looms weaving linen fabrics. Rates suggested. Rates on linen yarns proposed in H. R 7456 should be lowered or else increased duties placed on linen fabrics. The differential should be at least 25 per cent. Under the act of 1913 the duty on linen yarn is 20 per cent, and on present costs the specific duties in H. R. 7456 will more than double the amount paid before the war. If prices recede to their pre-war level, the specific duty will range from 70 to 80 per cent and more. At these exces- sive rates, however, there will be no imports of linen yarns suitable for the manufacture of household linens. (For a fuller discussion of this witness's remarks, see paragraph 1009, Linen fabrics.) PARAGRAPH 1004. HEMP YARNS. WITNESS, AND INTERESTS REPRESENTED. FAVORING LOWER DUTIES : Italian Chamber of Commerce in New York, representing importers, ex- porters, and representative Italian and American 'manufacturers. New York City. Hearings: Pages 2584-2585 of Schedule 7. (Part of a brief (pp. 2576-2592) dealing with a variety of Italian products.) Costs and selling prices. It is urged that the increase proposed by H. R. 7456 would stop the importation of all semi-raw material, which domestic manufacturers of thread and twine should be able to obtain at the least possible cost. Comparability. Practically all the imports consist of a coarser grade of yarn suitable for twine or cordage or for filling purposes in the manufacture of carpets. Rates suggested. That the rates on hemp yarns in H. R. 7456 be reduced 75 or 50 per cent, and if this is impossible that such rates be replaced by those of the act of 1909, substituting, however, the equivalent specific rates for the ad valorem rates found in that act. Remarks. The present tariff amply protects the domestic industry manufacturing hemp yarns, as is shown by the fact that the domestic DIGEST OF TARIFF HEARINGS, H. R. 7456. 373 consumption of domestic yarn is far greater than the quantities im- ported or likely to be imported. Imported hemp yarns, especially those not finer'than 8 lea. are scarcely manufactured in the United States: this is owing to the difficulty of production and to the ob- jection of labor to the hard work necessary for their manufacture. Consequently, there are only two or three spinners producing this type of yarn for the carpet industry and their supply is insufficient for the needs of that industry. By returning raw hemp to the free list, it would seem that the duty, ranging between 12 and 20 per cent ad valorem on the yarn, would protect the American yarn manufacturer without imposing any hardship on the American consumer. PARAGRAPH 1004. HEMP THREADS, TWINES, OR CORDS. WITNESS, AM) INTERESTS REPRESENTED. FAVORING LOWER DUTIES : The Italian Chamber of Commerce in New York, representing importers, exporters, and representative Italian and American manufacturers, New York City. Hearings: Page 2585 of Schedule 7. (Part of a brief (pp. 2576-2592) dealing with a variety of Italian products.) Rates suggested. The rates on hemp threads, twines, and cords proposed in H. R. 7456 be reduced 75 or 50 per cent ; if this be im- possible, they should be replaced by paragraph 340 of the act of 1909. Remarks. The importation of these articles has been practically nil under the present tariff rate of 20 per cent. The rates proposed by H. R. 7456, which are much higher than those in the act of 1909, would absolutely prohibit imports. PARAGRAPHS 1004, 1006, AND 1007. LINEN THREADS, TWINES, AND CORDS. WITNESS, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Robert Barbour, representing the Linen Thread Co., the Barbour Flax Spinning Co., the Smith & Dove Manufacturing Co., J. E. Barbour Co., West End Thread Co.. R. J. Ederer Co., Superior Thread & Yarn Co., and Chelsea Fiber Mills. Hearings : Pages 3453-3460. Remarks. In normal times America will not be able to compete in production of the proper flax fiber,, primarily because of the lack of experience on the part of the farming class. Flax, to be properly produced, should be cultivated in small units and is most successful where men, women, and children produce the flax and turn it over to the scutch mills. The conversion of the straw to the raw material causes the trouble in America. The soil is good and the climatic conditions are favorable, but skilled operatives are lacking. The Barbour Flax Spinning Co. was largely responsible for the increased American acreage during the war, but its attempts to develop ma- chines for pulling the flax were an absolute failure. Likewise, at- tempts made to rett and scutch by machinery at a central plant had to be abandoned. 7713422 25 374 DIGEST OF TARIFF HEARINGS, H. R. 7456. PARAGRAPHS 1004, 1009, AND 1013. LINEN TOWELS, NAPKINS, AND CRASHES. WITNESS, AND INTEREST EEPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. N. R. Foster, representing the Niagara Textile Co., Lockport, N. Y. Hearings: Pages 3467-3474. Costs and selling prices. At the present time all-linen towels and napkins are being brought into this country at very near the price for which similar goods, of part linen and part cotton, can be made here. When central Europe begins to have the benefit of cheaper cotton and cheaper flax many of the lines which are now being made in the United States will be discontinued through inability to compete with foreign products. Size of industry. There may be 12 or 14 factories that manufac- ture similar goods. Comparability. The manufacture of linen fabrics " is probably America's most infant industry ; given a helpful tariff it can be made one of her greatest." There are imported annually about $50,000,000 worth of household linens, of which the greater part can eventually be made in this country. Rates suggested. As good linen yarns, the raw material of this industry, are not yet produced in sufficient quantity to supply Ameri- can looms, it is of particular importance to protect fabric manufac- turers in the matter of linen yarns. It is suggested that the follow- ing be added to paragraph 1004 : " That all flax or tow yarns im- ported to be woven into fabrics take not over 15 per cent ad valorem, and on any of the foregoing yarns when boiled, bleached, or other- wise treated, an additional 5 cents per pound be added." The rate on the finished fabric is reduced in H. R. 7456 from 35 to 28 per cent, while linen yarns are being raised from 20 per cent, the rate in the Act of 1913, to 40 up to 80 per cent, or more. The differential be- tween the yarn and the woven fabric should be at least 25 per cent. (See remarks on flax yarn, paragraph 1004.) Remarks. Under H. R. 7456, the flax grower and the linen yarn spinner are given liberal and increased protection, while the fabric manufacturer, who uses raw flax and flax yarn as his raw materials, is given a decrease in duties. Manufacturers of flax fabrics must be able either to secure their yarns at a lower rate or to have increased protection on the finished linen fabric. PARAGRAPH 1005. CORDAGE AND ROPE. WITNESS, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Francis C. Holmes, representing American Manufacturing Co., Colum- bian Rope Co., Cupples Cordage Co. (Inc.), Edwin H. Fitler Co., the Hooven & Allison Co., R. A. Kelly Co., New Bedford Cordage Co., Peoria Cordage Co., Plymouth Cordage Co., Rinek Cordage Co., E. T. Rugg & Co., Tubbs Cordage Co., Wall Rope Works (Inc.), Waterbury Co., and Whitlock Cordage Co. Hearings: Pages 3475-3478. Costs and setting prices. In the months of January-September, 1921, the average total cost per pound of manufacturing and selling cordage in the United States, as obtained from a number of domestic DIGEST OF TARIFF HEARINGS, H. R. 7456. 375 manufacturers, was 15.21 cents as against 12.09 cents for the declared value of foreign cordage imported during the same period and 11.01 cents for all entered from the Philippines. The wages now paid the men employed in American cordage industries range from 43 cents to 55 cents per hour as compared with from 14 to 30 cents for the corresponding classes of English workmen. Rates suggested. Cordage should carry a duty of 2^ cents per pound, equivalent to 13.15 per cent ad valorem on the present Amer- ican market price of manila cordage, this figure comparing with 13.6 per cent in the years prior to 1913. As wages throughout the world are more than double pre-war, the amount of specific protection should be made to correspond. Remarks. Europe's production will generally increase within the next few years, with constantly swelling exports. Before the war not one cordage manufacturer had an American branch, but two (one British and one Dutch) have since opened branches in New York City. Philippine competition. The closing paragraphs of the brief (pp. 3477-3478) are devoted to the question of Philippine competi- tion in this industry, as abstracted below. Costs and selling prices. The total cost in January-September, 1921, of manufacturing cordage as obtained from the number of domestic manufactures was 15.21 cents per pound as against 11.01 cents for the declared value of cordage imported from the Philip- pines in the same time. The average wage in the United States paid to common male labor in the cordage industry is from 46 to 55 cents an hour as contrasted with 75 cents per day in the Philippines. For female workers the rates are 28 to 45 cents per hour in the United States and 40 cents per day in the Philippines. In 1919 the cordage imported from the Philippines was entered at from 3 to 5 cents below American market prices. Rates suggested. A duty of 2| cents per pound to be placed on all cordage coming from the Philippines. Remarks. Prior to 1917 there was practically no Philippine cord- age imported. In 1919 there was imported from this source about 1,352,000 pounds. All imports of convict-made goods should be prohibited and Philippine prison labor should be no exception to this rule. Section 5304, United States Compiled Statutes, should be amended. PARAGRAPH 1006. FLAX FISH NETTING AND NETS. WITNESS, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Brief submitted by Mr. Robert Barbour in behalf of the American Net and Twine Co., R. J. Ederer Co., Fish Net & Twine Co., and National Net & Twine Co. Hearings : Pages 3460-3461. Rates suggested. The differential of 10 per cent over the threads, twines, or cords from which fish netting or nets are made to be in- creased to 40 per cent. Remarks. The threads, twines, and cords are raw material to the net manufacturer, who converts them into netting and nets. As the 376 DIGEST OF TARIFF HEARINGS, H. R. 7456. paragraph stands in H. R, 7456, the only protection the netting manufacturer receives is 10 per cent, which is wholly inadequate. Recent quotations by European and Japanese manufacturers show that the ad valorem duty of 10 per cent must be increased to at least 40 per cent if this country is to continue manufacturing fish netting. PARAGRAPH 1007. HYDRAULIC HOSE. WITNESS, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Limus C. Coggan, Boston, Mass., representing the Eureka Fire Hose Manufacturing Co., Charles Niedner's Sons Co., and Wm. & Chas. Beck (Inc.). Hearings : Pages 3463-3466. Costs and selling prices. It can be assumed as substantially cor- rect that the foreign manufacturer, through his cheap labor and ma- terial, can manufacture, for $1.25 per pound, hose which is com- parable to the domestic article selling for $2. Size of industry. The three companies here represented make practically all the linen-fiber hose produced in the United States. Comparability. Foreign linen hose is comparable to the American product. Rates suggested. A change in the duty on linen fire hose from 26 to 50 per cent ad valorem; and in any event, a differential of 30 per cent between the ad valorem duty on flax-line yarn of 8 lea and "not finer than 20 lea, and finished linen fire hose. (See paragraph 1003 for views regarding changes in proposed duties on linen yarn.) Remarks. If it should seem wise to impose a duty upon flax-line yarns admitted for manufacture into hose or for any other purpose, the duty should be on an ad valorem instead of upon a specific basis. The specific duty on linen yarns proposed in paragraph 1004 of H. R. 7456 is wholly impractical and unscientific and may, under potential future conditions, drive out of existence manufacturers producing this class of material. Linen hose under the duties proposed is as- sessed at an ad valorem duty of 26 per cent, while the raw material, or the yarn, is advanced from an ad valorem duty of 20 per cent to a specific duty, the equivalent ad valorem of which amounts to from 35 to 40 per cent of present-day values and from 70 to 80 per cent of prewar values. PARAGRAPH 1008. JUTE CLOTHS, PROCESSED. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Frank Ewer, representing the Bemis Bros. Bag Co., Boston. FAVORING LOWER DUTIES : Mr. J. E. Barbour, representing the Allentown Spinning Co., the American Manufacturing Co., the Chelsea Fiber Mills, The Columbian Rope Co., the Dolphin Jute Mills, the Hanover Cordage Co., the Hooven & Allison Co., Lamond & Robertson Co., the Schlichter Jute Cordage Co., the Suth- erland & Edwards Co., and the Wilmington Mills. (Brief.) Hearings : Pages 3481-3482. Witness : Mr. Frank Ewer, representing the Bemis Bros. Bag Co., Boston. DIGEST OF TARIFF HEARINGS, H. R. 7456. 377 Rates suggested. An addition of 7 per cent to the ad valorem rate, making the total duty on jute cloths which have been printed, dyed, etc., 1 cent per pound, plus 20 per cent ad valorem. Hearings: Page 3450. Witness: Mr. J. E. Barbour (as above). Rates suggested. The same rates to be maintained as are found in the act of 1913. The wording of the act of 1913 to be modified so as to exclude " all fabrics known or used as carpets, carpeting, mats, and rugs." PARAGRAPHS 1008, 1009, 1017, AND 1019. JUTE BAGS AND SACKS. WITNESSES, AND INTERESTS BEPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. J. F. Simpson, representing the Maginnis Cotton Mills, New Orleans, La. Mr. Frank Ewer, representing the Bemis Bros. Bag Co., Boston, Mass. Hearings : Pages 3478-3480. Witness: Mr. J. F. Simpson, representing the Maginnis Cotton Mills, New Orleans, La. Costs and selling prices. At present the heavy cotton sack made for 100 pounds of granulated sugar is in competition with the double bag, consisting of an outer covering of burlap and an interlining of cotton. This is possible because the accumulation of low-grade cot- ton has depressed its price 5 cents a pound below the current price of middling cotton. Size of industry. Nothing would be more* helpful toward stabiliz- ing low-grade cottons to a reasonable value than a duty on burlap and burlap bags. Once the cotton bag made from low-grade cotton is established, its uses will spread to the shipment of many other commodities. Increased consumption of low-grade cotton in bags will increase the prosperity of the cotton grower. Comparability. In every normal cotton crop there is a large pro- portion of low-grade cotton. Within the last few years American cotton mills, through the installation of very expensive machinery, have proved that low-grade cotton can be made into bags, twine, and rope which are satisfactory in strength and service to the con- sumer. Rates suggested. On burlap, a duty of 1 cent per pound and 25 per cent ad valorem, and on bags at least 20 per cent more than on the burlap. Remarks. The cotton farmer has been burdened in the past few years by 2,000,000 to 3,000,000 bales of considerably lower grade cot- ton than this country has been accustomed to spinning. Only in recent years has machinery been adapted and perfected which will permit the utilization of this cotton for the manufacture of bags, twine, and rope capable of competing with similar articles made from jute and sisal. Hearings : Pages 3481-3482. Witness : Mr. Frank Ewer, representing the Bemis Bros. Bag Co., Boston, Mass. Rates suggested. (1) Bags or sacks made from jute fabrics, not bleached, printed, etc., 1 cent per pound, and in addition thereto 20 378 DIGEST OF TARIFF HEARINGS, H. R. 7456. per cent ad valorem ; (2) bags or sacks bleached, printed, etc., 1 cent per pound, and in addition thereto 33 per cent ad valorem. Remarks. An additional 3 per cent ad valorem is asked on para- graph 1017. Under previous tariffs a distinction has been made be- tween fabrics not bleached, printed, etc., and those which have been bleached, printed, etc.; a like distinction was also made on jute bags. In H. R. 7456, while a distinction is made in the duties assessed on cloths which have been bleached, printed, etc., and those which have not been so treated, a similar distinction on bags has not been made. PARAGRAPHS 1009, 1010, 1012, 1013, 1015. LINEN FABRICS. WITNESS, AND INTEREST REPRESENTED. FAVORING LOWER DUTIES : Mr. W. A. McCleary, representing linen importers and traders. Hearings : Pages 3483-3485. Size of industry. With the exception of a very few coarse fabrics, usually mixed with cotton, practically the entire domestic consump- tion is imported. To a very large extent such fabrics are used as raw materials in the manufacture of dresses, embroideries, furniture coverings, waists, and for a great many other purposes. Rates suggested. That Schedule J be reenacted into Schedule 10, exactly as it stands in the act of 1913, both as to wording and classifi- cation, and that the duty on plain woven fabrics or flax be continued at 30 per cent. This is suggested in order to avoid dislocation of trade, and for maintaining revenue, avoiding unnecessary litigation, and preventing protests from consumers over the advance in prices that follow increases in duties. Remarks. Any change tending to increase prices to the consumer will decrease revenue from duties and considerably cut down the quantities imported. Owing to keen competition, the profits in the linen trade are small, and any increase, whether of market price or duty, is immediately passed. on to the consumer. A change of rates would be quickly noticed by all users of handkerchiefs, table cloths, wearing apparel, etc. PARAGRAPH 1010. PADDINGS AND INTERLININGS OF FLAX, HEMP, AND JUTE. WITNESS, AND INTERESTS REPRESENTED. FAVORING PROPOSED OB HIGHER DUTIES : Mr. Maurice Goldman, representing the Milford Spinning & Weaving Cor- poration, Milford, N. H. FAVORING LOWER DUTIES: Mr. James Gilmore, Nutley,. N. J., representing importers of paddings. B. Kuppenheimer & Co., Chicago, 111. (Brief.) Hearings : Pages 3486-3488. Witness : Mr. Maurice A. Goldman, representing the Milford Spin- ning & Weaving Corporation. Costs and selling prices. The wages paid in competing countries are about one-third of the domestic. DIGEST OF TARIFF HEARINGS, H. R. 7456. 379 Size of industry. Domestic production is about 5,000,000 yards a year as against imports of about 50.000,000 yards. Comparability. The American product is accepted by the trade as being equal to that of foreign manufacture. Rates suggested. It is requested that paragraph 1010 of H. R. 7456 read as follows : Woven fabrics, composed wholly or in chief value of flax, hemp, or jute, ex- ceeding 30 and not exceeding 120 threads to the square inch, counting the warp and filling, and weighing not less than 4i and not more than 12 ounces per square yard, used as padding- or iuterlinings in clothing, shall pay the same duty per pound as the highest rate imposed in this act upon any of the yarn of which the fabric is made and, in addition thereto, 25 per centum ad valorem. Remarks. The reason for making changes in paragraph 1010 is that the yarns used in the manufacture of these cloths, covered by paragraphs 1003 and 1004, are dutiable on a specific basis, while the finished product is dutiable under an ad valorem rate. Price fluctua- tions bring about at times a condition in which the amount of the specific duty on the raw material is greater than the amount of the ad valorem duty on the finished product. The duty on paddings as proposed in paragraph 1010 would, under normal conditions, be only two-thirds as much as the duty on the yarns. The changes suggested would afford at all times a compensatory duty for the duties imposed on the yarns and provide a differential for the cost of converting the yarn into paddings. Hearings : Pages 3485-3486. Witness: Mr. James Gilmore, Xutley. X. J., representing importers of jute paddings. Size of industry. There is no domestic industry in existence. The cloths are of a very low order. Rates suggested. Jute canvas or jute paddings are at present on the free list, and were taxed under the acts of 1897 and 1909 at 15 per cent ad valorem and seven-eighths of 1 cent per pound. Under paragraph 1010 of H. R. 7456 they are assessed at an extraordinary rate of duty, namely, 33 per cent ad valorem on American, valua- tion. The word "jute" should be eliminated from paragraph 1010, which will cause jute paddings to fall under paragraph 1008, relat- ing to jute cloths in general. All- jute paddings should not come in at a higher rate of dutv than the jute cloths specified under para- graph 1008. Remarks. The clothing manufacturers should be given a chance to bring in a cheap fabric required in the very cheapest clothing. If the duty is increased as proposed in paragraph 1010, there will be an increase of 50 per cent in the cost of a pair of fronts used in a coat. It does not seem fair that such a high rate of duty should be imposed when the clothing people are trying to get the cost of clothing down, especially the cost of cheaper clothing. Witness: B. Kuppenheimer & Co., Chicago, 111. (Brief; no ap- pearance at hearings.) Costs and selling prices. It is inconsistent to levy an excessive tariff upon paddings of all jute, one of the important raw materials used by clothing manufacturers. This will not only prevent a reduction in present costs but actually force an increase. 380 DIGEST OF TARIFF HEARINGS, H. R. 7456. Size of industry. As there is no domestic industry manufacturing paddings there is no industry to protect, either directly or indi- rectly, by new or increased duties. Rates suggested. In the absence of any helpful purpose and in the conviction that paragraph 1010 as it now stands will work harm, it is urged that the entire paragraph be stricken out of H. E. 7456, and that the rates on materials used for paddings and interlinings in clothing remain as in the act of 1913, namely, jute paddings, free, and linen paddings dutiable at 30 per cent ad valorem. Remarks. Paragraph 1010 of H. R. 7456 will work grave hard- ship on the very people it presumes to serve, for the following rea- sons: (1) It discriminates against clothing industries by proposing a higher duty on materials used by that industry than on similar materials destined for other industries; (2) it discriminates and penalizes the clothing industry by imposing an extraordinary duty on jute canvas, which now enters free, and increases the duty on linen canvas more than on other linen fabrics; (3) materials specified in paragraph 1010 are amply protected, whether for revenue or for protective purposes, by paragraphs 1008 and 1009 of the bill. PARAGRAPH 1016. LINEN HANDKERCHIEFS. WITNESS, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Joseph W. Stein, representing Herrnian, Aukam & Co., the Acheson Harden Co., Alexander & Stein (Inc.), I. C. Herman & Co., Long Hand- kerchfef Co. (Inc.), H. Rosenthal & Co. (Inc.), Newark Embroidery Works, Phillips, Weil & Norton, Schmidt Fitz-Gibbon Co., E. Heller & Bros. (Inc.), the International Handkerchief Manufacturing Co., and Duke. Macmahon &Co. (Brief.) Hearings : Pages 3430^3433. Costs and selling prices. Without considering factory overhead, the American manufacturer pays his workers fully 25 per cent more than is paid to British workmen. At the present rate of duty and figuring the pound at $4, the importer can land a dozen woman's col- ored woven border handkerchiefs at 58.5 cents per dozen net. A cost sheet submitted shows that the domestic cost of producing a simi- lar article, made of the same material and in the same way, amounts to 81.28 cents per dozen net. Another example of the great disad- vantage under which the domestic producer labors is shown in the item of hemstitching. In Belfast the wage paid for stitching a 12- inch handkerchief of 15 stitches is 2-| pence per dozen. Granting that the factory overhead of the English producer is the same as the American, his cost per dozen for hemstitching is 5 pence, or 8.40 cents, whereas the domestic cost, including overhead, is 14.96 cents. Size of industry. The industry manufacturing cotton and linen handkerchiefs employs approximately 10,000 workers and the yearly wage is from $7,500,000 to $10,000,000. In the American handker- chief trade there is actual open competition ; monopoly is impossible. Comparability. The linen cloth out of which the handkerchiefs are made is not produced in the United States, but is manufactured in Ireland, shipped in the bleached state to the United States, where it is cut up, hemstitched, or otherwise manufactured. DIGEST OF TARIFF HEARINGS, H. R. 7456. 381 Rates suggested. In place of paragraph 1015 of H. R. 7456 it is Tequested that the following be substituted : (1) Handkerchiefs composed wholly or in chief value of flax, hemp, or ramie, or vegetable fiber other than cotton, whether in the piece or otherwise, finished or unfinished, but not hemmed, shall pay the same rate of duty on the cloth contained therein as is imposed by this act on cloth of the same kind and description. (2) When such handkerchiefs are hemmed they shall pay an additional 9 per cent. Provided, That such handkerchiefs shall not pay a rate of duty of less than 30 per cent ad valorem. (3) Handkerchiefs made of the foregoing materials, in the piece or otherwise, finished or unfinished, hemstitched or imitation hemstitched, or revered, or having drawn threads, 37^ per cent. (4) Handkerchiefs composed of the fore- going materials, in the piece or otherwise, finished or unfinished, if embroidered in any manner with an initial, letter, monogram, or otherwise by hand or machinery, etc., 42 per cent ad valorem. The above rates are based on American valuation. R&mcerk** The British manufacturer has such great advantages over the American competitor that if it had not been for the European war. which made labor in this line very scarce, this country would have been flooded with European handkerchiefs and the ma- jority of the American factories would have been compelled to close. PARAGRAPH 1018. LINOLEUM, OILCLOTH AND PAPER-FELT FLOOR COVERINGS. WITNESS, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. John J. Evans, Lancaster, Pa., representing manufacturers of linoleum, oilcloth, and felt floor coverings. Hearings : Pages 3488-3491. Costs "and selling prices. The present comparative costs (material, labor, and overhead) of manufacturing linoleum, cork carpet, and corticine here and in England are respectively $1 for the American manufacturer and 71 cents for the foreign. In the manufacture of floor oilcloth, for every dollar the domestic producer spends the English manufacturer pays out 79.5 cents. Size of industry. In 1904 the domestic production of linoleum and oilcloth floor covering was valued at $9,700,000, in 1909 at $15,500,000, and in 1919 at $17.600,000. In 1914 the capital invested was over $20,000,000, the persons engaged about 5,000, and the salaries and wages paid over $3,000,000. The percentage of male employees in 1914 was 96 per cent of the total. Rates suggested. To compensate for the difference in the cost of manufacture of linoleum here and abroad, a duty of 40 per cent ad valorem. This on 71 cents the foreign cost of manufacturing lino- leum amounts to 28.4 cents and is practically equal to the difference in cost of production. Similarly, a duty of 25 per cent on oilcloth floor coverings would equalize the difference of 20 cents between the cost of producting oilcloth here and abroad. Specific mention should be made of paper-felt floor covering, which is a new product, not 382 DIGEST OF TARIFF HEARINGS, H. R. 74-36. heretofore needing separate classification. Such paper- felt covering should bear the same duty as oilcloth for floors, its cost of manufac- ture being similar to that of oilcloth. The suggested duties are based upon the continuance of the present rates of duty on the materials used in the manufacture of linoleum and floor oilcloth. Change in these rates would necessitate a corre- sponding change in the duties placed on the finished products. The principal raw materials used are burlap, cork, linseed oil, wood flour, pigments, lithopone, and gums. remarks. From a customs administrative standpoint and from the standpoint of the American industry, it will be expedient to do away with the former classifications of the product based on width, and have all the various types of linoleum bear the same rate of duty. The act of 1909, which combined specific and ad valorem duties, made a complicated tariff paragraph. A comparison of present selling prices in the United States with foreign-made linoleum would be unjust to domestic manufacturers, who have liquidated and charged off losses on stocks of raw materials and whose present selling prices are based on market or replacement values. On the other hand, foreign manufacturers are stil] main- taining prices in effect in April, 1920, the highest charged in the past decade. PARAGRAPH 1019. FABRICS OF VEGETABLE FIBER OTHER THAN COT- TON, Nor SPECIALLY PROVIDED FOR. WITNESS, AND INTERESTS REPRESENTED. FAVORING LOWER DUTIES: Mr. J. E. Barbour, representing Allentown Spinning Co., American Man- ufacturing Co., Chelsea Fiber Mills. Columbian Rope Co., Dolphin Jute Mills. Hanover Cordage Co., the Hooven & Allison Co., Lanioii',1 & Robert- son Co., the Schlichter Jute Cordage Co., the Sutherland & Edwards Co., and the Wilmington Mills. Hearings: Pages 3444-3452. Rates suggested. The wording and the duty under this paragraph to be retained as in the act of 1913. (For a fuller discussion of this brief, see paragraph 1003 relating to jute yarns and cordage.) PARAGRAPH 1019. LINEX ARTICLES NOT SPECIALLY PROVIDED FOR. WITNESS, AND INTERESTS REPRESENTED. FAVORING LOWER DUTIES : Mr. W. A. McCleary, representing linen importers and traders. Hearings: Pages 3147-3149. Rates suggested. The duty of 35 per cent ad valorem, as found in the act of 1913, to be reenacted. (For a more complete abstract of the brief presented, see par- agraph 1009 on linen fabrics.) DIGEST OF TARIFF HEARINGS, H. R. 7456. 383 PARAGRAPH 1020. STRAW FLOOR COVERINGS NOT SPECIALLY PROVIDED FOR. WITNESS, AND INTERESTS REPRESENTED. FAVORING LOWER DUTIES : Mr. J. E. Barbour, representing Allentown Spinning Co., American Man- ufacturing Co., Chelsea Fiber Mills, Columbian Rope Co., Dolphin Jute Mills, Hanover Cordage Co., the Hooven & Allison Co., Lamond & Robert- son Co., The Schlichter Jute Cordage Co., The Sutherland & Edwards Co., and The Wilmington Mills. (Joint brief.) Hearings: Page 3450. Rates suggested. Paragraph 273 of the act of 1913 reads as fol- lows: Carpets, carpeting, mats, and rugs made of flax, hemp, jute, or other veg- etable fiber (except cotton), 30 per cent ad valorem. In place of the above, it is suggested that there be imposed a straight specific duty of 12| cents per pound. (For a fuller abstract of this brief, see paragraph 1003, relating to jute yarns and cordage.) PARAGRAPH 1020. FLOOR MATTINGS, MATS, AND RUGS MANUFACTURED FROM STRAW, RICE, OR OTHER VEGETABLE SUBSTANCE. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. F. E. Carstarphen, representing the Grass and Fiber Rug Manu- facturers' Association. Mr. Henry A. Dammeyer, representing the Willow Rug Co., and the Grass and Fiber Manufacturers' Association. FAVORING LOWER DUTIES: Mr. J. M. MacDonald, representing 63 importers and distributors located in. various parts of the United States. Hearings: Pages 3500-3514. Witness : Mr. F. E. Carstarphen, representing the Grass and Fiber Rug Manufacturers' Association. Costs and selling prices. In pre-war times, Japanese weavers were paid as little as 20 cents per day. In December, 1919, the average daily wage of a weaver in Tokyo was 60 cents per day. A fair estimate of the decline in Japanese wages since the close of the war is about 15 per cent, making a weaver receive at present about 51 cents per day. In Wisconsin and Minnesota, where the bulk of the domestic grass rugs are made, the hours worked per week are 55 and 49^ respectively. The minimum wage for women is from 25 cents per hour, required by law, to 28 cents per hour for piece- work. The minimum average wage for men is 31 cents per hour. Spinners working in the domestic grass-rug industry earn from $3.50 to $4.50 per day; weavers from $3 to $4; and painters from $3.50 to $4.50 per day! Size of industry. The domestic grass-rug companies, when in full operation, employ about 1,500 men and women in the grass fields and 1,000 men arid women in the factories, and pay annually about $1,000.000 in wages. Comparability. The Japanese have designs which are copies of the domestic and make it hard for the laymen to distinguish be- 384 DIGEST OF TARIFF HEARINGS, H. E. 74-56. twecn competing domestic and foreign rugs. Japanese rugs are en- tered with flimsy little labels that are soon pulled off, with the re- sult that Japanese rugs are mixed among domestic rugs. Rates suggested. In place of paragraph 1020, it is requested that the following be substituted : Common China, Japan, and India straw matting, and floor coverings made therefrom, 3 cents per square yard ; rugs made of rice straw or any similar material, commonly known as grass rugs, and all other floor coverings of like character and description, not specially provided for, 4 cents per square foot. Remarks. The industry requires higher duties than were in force in 1909, because of subsequent development. In 1909 the Japanese were sending to this country only clippings from mattings. The act of 1913 was drawn up with tne intention that the 30 per cent ad valorem clause in paragraph 273 should be applied to rugs and that the rate of 2^ cents per square yard should apply only to such mattings as were made from straw. The duty of' 2^ cents per square yard, enacted in 1913, affords no protection, Japanese rice straw rugs measuring 9 by 12 feet, imported at a cost of $3.12 pay a duty of only 30 cents, making a total landed cost of S3.42. These imported rugs compete with domestic rugs costing the American producer an average of $8.35 to manufacture. The rates proposed by H. R. 7456 increase the duty on such a rug from 30 cents to 36 cents. Grass rugs manufactured in this country are in no sense a luxury, but are intended for the use of families of small and moderate means, as a substitute for the more expensive woolen rugs and carpets, Hearings: Pages 3491-3500. Witness : Mr. Henry A. Dammeyer, representing the Willow Rug Co. and the Grass and Fiber Rug Manufacturers' Association. Costs and selling prices. The present landed cost, including the present duty on the Japanese rice straw rug, the only type of rug under this classification directly comparable and competitive with the American grass rug, is $3.42, as against the cost, $8.62, of the domestic rug. a differential of $5.20. Under the 26 per cent rate proposed in H. R. 7456, the landed cost of the Japanese rug would be $5.365; and under the duty now proposed by the association 4 cents per square foot the total cost would be $7.44 as compared with $8.62 for the domestic product, a differential of $1.18 per rug in favor of the Japanese article. The foreign product, however, would retail for $1.75 less than the American grass rug. Size of industry. Domestic production increased steadily from 1910 to 1913, in the latter year amounting to over 6,000,000 square yards. From 1913 to 1919 it fell off to 3,779,000 square yards. In 1920 it showed an increase over 1919 of about 700,000 square yards a total production of 1.500,000 yards less than the production of 1913. The importation of Japanese grass rugs in 1920 was the largest since these began to be imported, being several times greater than in 1913. Comparability. Though the Japanese rice-straw rug and the American wire-grass rug are similar in appearance, the wearing qual- ities of the domestic rug are twice as great as those of the foreign. The foreign product, made of rice straw and rush, is very dry, whereas the domestic is made of thin wire grass, which is first woven together, then spun and bound with a binding warp, giving it greater .strength than the foreign rug. DIGEST OF TARIFF HEARINGS, H. R. 7456. 385 Rates suggested. (1) On common China, Japan, and India straw matting, and on floor coverings made therefrom, imports of which have decreased since 1910, and which do not compete with domestic rugs except in a remote way, the duty requested is 3 cents per square yard. (2) On rugs made of rice straw or similar material, which are directly comparable and competitive with the domestic product, the duty requested is 4 cents per square foot. Remarks. China and Japan matting does not compete with do- mestic rag grass rugs except in a very remote way. The Japanese in- dustry manufacturing rice-straw rugs, however, has become so tre- mendous that the domestic manufacturer of wire-grass rugs is out of business to-day. The low rate of duty applied to Japanese grass rugs has created such a marked increase in the domestic demand that small farmers and private families in Japan have taken up the in- dustry as a spare-time occupation, resulting in an increased tendency toward the abandonment of this line by the larger Japanese manufac- turers. At present, the number of looms operated in households ex- ceeds the number owned by the manufacturers, a condition involving practically no investment or overhead expense. What makes the competition very serious is the similar appearance of the two rugs. If the domestic industry is to resume, the duty must be somewhere near the difference in the price of the American and the competing rugs. Hearings : Pages 3514-3519. Witness : Mr. J. M. MacDonald, representing 63 importers and dis- tributors located in various parts of the United States. Costs and selling prices. According to investigations made by the Tariff Commission in 1919 the total labor cost on a Japanese rug was $1.67. The average domestic cost for material and labor of making a similar rug was $4.76. The duty requested by domestic manufacturers is $4.32 per rug or 4 cents per square foot. Comparability. There are two general groups of rugs imported under this classification: (1) Common China and Japan matting, which was formerly imported in 40-yard rolls and for which the present demand is practically confined to rugs cut and sewed together from the matting; (2) a Japanese rug developed along the same lines and similar, in appearance only, to the domestic grass rug. The de- velopment of the latter type of rug was created through the demand of the poorer classes in this country, who wanted something better than the ordinary Japanese rug made from matting and yet could not afford to pay the high prices asked for the higher grade, better quality American grass rug. Rates suggested. It is requested that paragraph 1020 be altered by striking out the following words occurring at the end of the paragraph, " 26 per cent ad valorem," and substituting therefor the words " 6 cents per square yard." Remarks. During the 10 years 1900 to 1909, the average yearly im- ports of Chinese and Japanese floor coverings were about 46.000,000 square yards; for the period 1910-1914, 26.500,000 square yards; and for 1915-1920 somewhere about 16,000,000 square yards. The idea of the American manufacturers in making their very extravagant de- mands is that they might succeed in getting more than they are other- wise entitled to, and this seems to have been realized in their receiving, in H. R. 7456, 26 per cent under the American valuation plan. This 386 DIGEST OF TARIFF HEARINGS, H. R. 7456. is estimated to be about 67 per cent based on present foreign costs. The present dutiable value of a stenciled rice-straw rug amounts to $5.12. The duty proposed in H. R. 7456 is $3.55 per rug as com- pared with duties now in force of 38.9 cents per rug. With a large overhead, the total domestic cost of producing a similar rug is $6.50 Domestic manufacturers request $5.70 on an imported rug which admittedly is of much poorer quality and much shorter durabil- ity than the domestic rug. Further referring to American valua- tion, the witness stated that any imports dissimilar in any one of four respects, namely, material, quality, construction, and^kind, can be entirely shut out by domestic producers manufacturing identical merchandise comparable in all respects, but not necessarily salable at their asking price. The more uneconomic and expensive it is to produce such goods the better able they will be to sell their regular goods which do not compare with the imported. PARAGRAPH 1021. COCOA MATS AND MATTINGS. WITNESS, AND INTERESTS REPRESENTED. FAVORING PROPOSED OB HIGHER DUTIES : Mr. Fred M. Cleveland, representing Joseph Wild & Co., Darragh-Smail & Co. (Ltd.). George Wehn, Son & Co., Heywood-Wakefield Co., George F. Kempf & Bro., and Wisconsin Mat Co. The United Textile Workers of America. (Brief.) Hearings : Pages 3519-3522. Witness : Mr. Fred M. Cleveland, Wakefield, Mass. Costs and selling prices. A light brush cocoa mat having the largest sale in the trade can now be bought at $3.60 per dozen f. o. b. shipping point in India. The rate on such mats proposed in H. R. 7456 would make the duty $3.15. Adding freight, $1 per dozen, the landed cost in New York would be $7.75 per dozen as compared with the lowest American wholesale selling price of $12 per dozen. An ad valorem addition of 25 per cent on American valuation, as sug- gested in the submitted brief, would amount to $3, bringing the landed cost, under the rates herein proposed, to $10.75 or, even then, 20 per cent under the domestic price. The witness quoted a letter showing the offer made by an importer to supply a domestic manu- facturer with his requirements in certain grades at a lower price than such grades could be manufactured in this country. Size of industry. In normal times the domestic industry making mats and mattings of cocoa does not employ over 650 wage earners. The mills at present are practically shut down and there is not an American manufacturer who is running 25 per cent capacity. Comparability. Mats and mattings imported from India, though designated by standard grade names used in this country, are in reality one grade higher than the American product. The difference in grade is equivalent to 25 per cent in value. Rates suggested. The rates proposed in H. R. 7456 to be amended by the addition of an ad valorem duty of 25 per cent, making the paragraph read : Mattings made of cocoa fiber or rattan, 9 cents per square yard, and in addi- tion thereto. 25 per cent ad valorem ; mats made of cocoa fiber or rattan, 7 cents per square foot, and in addition thereto, 25 per cent ad valorem. DIGEST OF TARIFF HEARINGS, H. R. 7456. 387 Remarks. Unless some protection beyond that given in H. R. 7456 is granted there is no prospect of resuming the domestic manu- facture of mats and mattings. There is now more than a year's sup- ply of imported mats and mattings in this country. The principal handicap of the American manufacturer is the low cost of Indian labor, many of the mats being woven in the huts of the coolies. Until 1914, Indian mats were marketed principally in Europe and Aus- tralia. When the demand of these markets was curtailed the United States became the chief market. The tariff of 1890 gave a duty on matting of 12 cents per square yard, and on mats 8 cents per square foot, although at that time imports of mats from India were only small in quantity. Witness: The United Textile Workers of America. (Brief; no appearance at hearings.) The brief presents the position of American labor in regard to im- ports of fiber mats. In the last 18 months the workers in this industry have worked less than one-quarter of the time; the situation is one of grave con- cern. With imports of 2,103,337 square feet in 1920 and a prospec- tive volume of 3,000,000 square feet in 1921, sufficient mats and mat- tings have been imported to supply American demands for nearly two years. Low foreign labor cost, particularly in India, is pointed to as the chief cause of present conditions. The duties proposed in H. R. 7456 being inadequate to meet the case, an additional 25 per cent ad valorem duty is requested. SCHEDULE 11. WOOL AND MANUFACTURES OF. INTRODUCTION. WITNESSES : Mr. Samuel S. Dale, representing the Carded Woolen Manufacturers' Asso- ciation, Boston, Mass. Mr. John P. Wood, representing the National Association of Wool Manufac- turers, Philadelphia, Pa. Hearings : Pages 3570-3634. Witness: Mr. Samuel S. Dale, representing the Carded Woolen Manufacturers' Association. The testimony and printed data submitted by the witness in behalf of the Carded Woolen Manufacturers' Association are too extended to allow of more than an indication of their general trend. The testi- mony includes a brief of the association, printed in full on pages 3593-3634. The association is in favor of ad valorem, rather than specific, duties on new wool, reclaimed, wool, wool by-products, and partly or wholly manufactured wool products. The objections to specific duties are detailed and counter arguments to those urged against ad valorem duties are presented. Mr. Dale bases his suggestions in regard to tariff rates on foreign valuations, preferring to await developments before identifying himself with the American valua- tion plan. The witness discussed the relative advantages of ad valorem and specific rates of duty in connection with compensatory allowances on grease and scoured bases. He recommends that an investigation 388 DIGEST OF TARIFF HEARINGS, H. R. 7456. be made to determine the raw material and conversion costs of partly and wholly manufactured goods as a step toward an equitable adjust- ment of rates. Abstracts of the witness's testimony on individual paragraphs,, under separate headings, follow the brief summary of Mr. John P. Wood's testimony on the general question. Hearings : Pages 3525-3570. Witness: Mr. John P. Wood, representing the Xational Associa- tion of Wool Manufacturers. As in the case of Mr. Dale, detailed reference to Mr. Wood's testi- mony on the entire wool schedule is impracticable. The following observations may serve to indicate its general trend, leaving more specific references to be dealt with under individual paragraphs. The difficulties attending a comprehensive cost investigation at this time are emphasized, but light may be thrown upon the ade- quacy, or otherwise, of rates of duty by reviewing conditions exist- ing under former tariffs. The witness cites in this connection tables comparing the rates on wool manufactures under H. E. 7456 with those in the acts of 1894, 1897, 1909, and 1913; also official compari- sons of foreign and domestic wages. The possibility of international tariff concessions under the provisions of section 303 of the bill and of reductions of duties on goods imported in American vessels should also be kept in view. The witness is not in agreement with Mr. Dale in regard to the basis of duties, believing, as he does, that there are serious difficul- ties in the way of an equitable adjustment of ad valorem duties. While favoring the American .valuation plan, he is opposed to flex- ible duties as a part of it. The witness recommends investigation by the Tariff Commission of the Forstmann plan for levying duties on wool manufactures r under which the rate of duty would be based upon the American conversion cost and legislated by Congress upon findings by the Tariff Commission. He finds that the compensatory duties on wool tops, yarn, and fabrics in H. R. 7456 have been based upon the rate of duty (25 cents per pound) levied upon the clean content of grease wool, rather than upon the rate of duty (26 cents per pound) levied upon wool imported in the scoured condition; he regards the latter as the proper basis. Mr. Wood's recommendations of changes in the wording and rates of duty in particular paragraphs appear under such paragraphs. PARAGRAPHS 1101 AND 1102. RAW WOOL. WITNESSES, AND INTEBESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : The Ohio Woolgrowers' Association, Marysville, Ohio. (Brief.) FAVORING OR TESTIFYING RELATIVE TO RECLASSIFICATION (f. e., TO THE BASIS UPON WHICH RAW-WOOL DUTY SHOULD BE LEVIED) : Mr. Samuel S. Dale, representing the Carded Woolen Manufacturers' Asso- ciation, Boston, Mass. Mr. John P. Wood, representing the National Association of Wool Manu- facturers, Philadelphia, Pa. DIGEST OF TARIFF HEARINGS, H. R. 7456. 389 FAVORING LOWER DUTIES : Mr. William Goldman, representing Cohen, Goldman & Co., clothing manu- facturers, New York City. Mr. Andrew J. Solis, representing A. J. Soils & Co., Boston, Mass. Wool on the skin. FAVORING LOWER DUTIES (RELATIVE TO THOSE ON SHORN WOOL) : Mr. T. F. Harrington, of J. J. Harrington & Co., representing the wool- pulling industry, New York City. Mohair. FAVORING PROPOSED OR HIGHER DUTIES : Mr. R. E. Taylor, representing the National Mohair Growers' Association, Carlsbad, N. Mex. Hair of camel, alpaca, llama, etc. FAVORING LOWER DUTIES : The Peruvian Ambassador. (Letter to United States Secretary of State.) REQUESTING RECLASSIFICATION : J. S. Radford, representing the Oriental Textile Mills, Houston, Tex. "Witness: The Ohio Woolgrowers' Association. (Brief; no ap- pearance at hearings.) Rates suggested. A specific duty of 33 cents per pound clean con- tent. The brief directs attention to the Republican platform pledge to give the sheep industry of the United States " a square deal " ; the brief asserts that H. R. 7456 ad valorem tariff on raw wool would give the least protection when most needed and that, at the present rate of decline of sheep raising in this country, there will be none at the end of 15 years. The committee is asked to read carefully the statement already filed with it by the National Sheep and Wool Bureau of the United States. Hearings: Pages 3635-3636. Witness : Mr. Samuel S. Dale, representing the Carded Woolen Manufacturers' Association. Rates suggested. Witness" advocates ad valorem duties on raw wool. Without making a recommendation as to the amount of that duty, he suggests that 50 per cent ad valorem, foreign valuation, would provide adequate protection to the wool-growing industry without imposing any serious burden upon the consumers or the manufacturing industry. (For reference to arguments of the wit- ness in favor of ad valorem duties on wool and wool manufactures, see digest of his testimony, above, under the title " Introduction.") Hearings : Pages 3526-3527. Witness: Mr. John P. Wood, representing the National Associa- tion of Wool Manufacturers. Rates suggested. The National Association of Wool Manufac- turers advocates duties on raw wool adequate to protect the domestic woolgrowing industry. The method by which the duty on raw wool shall be applied is of great concern to the wool manufacturer. There are three alternative methods : (a) Ad valorem duties. This method would be most equitable to the importer and the user, but is subject (in a peculiar degree because 7713422 26 390 DIGEST OF TARIFF HEARINGS, H. R. 74-56. of the wide fluctuations in wool prices) to the weakness generally attributed to the ad valorem principle, and it raises an insuperable difficulty as regards compensatory duties (p. 3526) : see also page 3539; also testimony of S. S. Dale, pages 3570-3634, digested above. (b) Specif c duties on " dean content.'' This would be decidedly the best method if it were not for the wide range of varieties of wool, embracing differences in the manner of utilization and in their in- trinsic and market values. A graduated scale of specific duties would tend to correct this, but any such scale, adequately subdivided, would be administratively impracticable. (c) Specif ed duties, grease basis. This method, though open to well-known objections, has been adopted in former tariff laws be- cause no other method would afford equal protection with less ground for criticism. A uniform basic rate of duty on unwashed wool does not fall with equal incidence on the clean content of all grades, but it results in less inequality than the uniform specific rate on the clean content, because variations in shrinkage do have some correspondence with variations in the fineness of the wool and in its market value. The clean-content rate in the pending bill would result in excessive ad valorem equivalents on the coarser and cheaper wools which enter into the lower-price goods. To render future statistics on raw wool comparable with past sta- tistics, the witness recommends designation of wools in paragraph 1101 as class 3; in paragraph 1102, as classes 1 and 2. Hearings : Pages 3708-3719. Witness: Mr. William Goldman, representing Cohen, Goldman & Co., clothing manufacturers. New York City. Rates suggested. On raw wool, a compound duty of 5 cents per grease pound plus 20 per cent ad valorem, foreign valuation. (Re- garding the advantages of such a form of duty, as urged by witness, see pp. 3710-3711.) Remarks. The proposal to tax raw wool 25 cents per pound, clean content, is regarded by the witness as a proposal to tax the American people $250,000,000 on its annual clothes bill to protect the wool- growers, the total value of whose output is only $65,000,000 annually (p. 3709). It takes about 4 pounds of clean .wool to make a man's suit, which, at 25 cents duty per clean pound, would be $1 per suit. But as the wool passes from the wool merchant through the hands of the spinner, the weaver, the clothing manufacturer, and the retailer (and, not infrequently, of a cloth jobber and a clothing jobber also), this $1 is pyramided until it amounts to $2.75 to $3 per suit. The retail value of wool clothing consumed annually in the United States is estimated at about $3,000.000,000. Assuming $2.75 to $3 to repre- sent about 10 per cent of the price of a suit, the pyramided duty on the wool in this clothing would aggregate about $300.000.000: allowing for the use of shoddy, cotton, etc.. this may be reduced to $250,000,000. A prominent woolnian estimates the value of the domestic output as $65,000,000. The clothing manufacturer is particularly concerned, because a duty of 25 cents per pound on wool, clean content, would seriously curtail distribution and lessen employment in both the woolen and the clothing manufacturing industries. It is the duty on raw wool. as it affects the clothing distributor, not the duty on wool manu- DIGEST OF TARIFF HEARINGS, H. R. 7456. 391 factures (practically all of which are made in the United States under keenly competitive conditions and sold, in the main, far below the tariff wall), that vitally concerns the clothing manufacturer. Hearings: Pages 3706-3708. Witness: Mr. Andrew J. Solis, representing A. J. Solis & Co., Boston. Kates suggested. The witness is opposed to high duties on raw wool. Hearings : Pages 3636-3640. Witness: Mr. T. F. Harrington, of J. J. Harrington & Co., New York, representing the wool-pulling industry. Costs and selling prices. The cost of pulling wool is 22 cents per skin, which, at 4 pounds per skin, makes about 5 cents per grease pound. Wools on the skin are uniformly of higher shrinkage than shorn wools of the same class, this being due to the presence of blood, dirt, tag locks, etc. ; so that a fairly high shrinkage must be taken in computing the pulling cost per scoured pound. Assuming an average shrinkage of 40 per cent, the pulling cost per scoured pound would be 8 cents. It costs much more to pull wool than to shear it. Size of the industry. The witness gives the names of 16 wool- pulling concerns for whom he is testifying. About 30 per cent of the skins pulled in this country (aside from carpet wools) are imported. Rates suggested. The differential duty in the pending bill between shorn wools and wool on the skin, namely, 1 cent per scoured pound, should be increased to 8 cents per scoured pound. Remarks. Under the Payne- Aldrich bill, when on Class I wools the differential between the shorn wool and skin wool duty was 1 cent per grease pound, it was practically impossible to import such wool on the skin. With the shorn wool dutiable at 11 cents per jjrease pound and the wool on the skin at 10 cents per grease pound, the difference was 10 per cent. Under the pending bill, these duties are, respectively, 25 cents and 24 cents per scoured pound a difference of only 4 per cent. Hearings : Pages 3724-3733. Witness: Mr. K. E. Taylor, of Carlsbad, N. Mex., representing the National Mohair Growers' Association. Costs and selling prices. Government statistics out the prewar cost per pound to produce mohair at 23 cents. Witness gave the present cost in New Mexico as 30 to 32 cents; in California and Oregon, 35 to 37 cents. Herders in South Africa are paid $13.50 per month ; in the United States, $35 to $45 per month. From 1910 to 1917, the average price of domestic mohair was about 31 cents per pound: early in 1919, 60 cents per pound; but later it dropped as low as 16 cents, and in 1920 a great deal of it sold at this price. In August. 1921, Cape mohair (from South Africa) was offered to domestic manufacturers, landed in Boston, at 26 cents per pound. (This included the duty of 15 cents and charges of per- haps 5 or 6 cents per pound.) Size of industry. From 19}4 to 1919. about 6.000,000 pounds of mohair were sheared annually in Texas, Oregon. New Mexico, Cali- 392 . DIGEST OF TARIFF HEARINGS, H. R. 7456. forma, and Arizona. There are, at present. 2.100,000 Angora goats in the United States, of which Texas has more than half. Rates suggested. On mohair, the duty to be increased (from 25 cents per scoured pound in Hi R. 7456) to 33 cents per scoured pound. Witness: The Peruvian Ambassador. (Letter of November 29, 1921, to the Secretary of State; no appearance at hearings.) Rates suggested. Attention is directed to "the fact that alpaca wools, exclusively imported from Peru, do not enter into any com- petition whatsoever with the wool of this country, and, on the con- trary, are the basis of a commercial interchange that is equally beneficial to our respective countries." The ambassador proceeds to inquire how the commerce of southern Peru could draw its supplies of manufactured articles from the American market if the latter country should exchange the main staple of export of that section of Peru. Hearings : Pages 3635-3636. Witness: Mr. J. S. Radford. representing the Oriental Textile Mills, of Houston, Tex. Remarks. Alpaca and llama hair should be taken out of para- graph 1102 and classed with cameFs hair in paragraph 1101. They belong more properly with the Class III wools (carpet wools, par. 1101) than with the Class I and II wools (clothing and combing wools, par. 1102). The act of 1909 contained the same mistake in classification. Moreover, the act of 1909 drew a false distinction by classing Russian camel's hair with the Class III wools and China and other camel's hair with the Class II wools at a higher duty, whereas the China camel's hair is almost identical with the Rus- sian! All camel's hair has been classed with the carpet wools in paragraph 1101 in the pending bill and should be left there. PARAGRAPH 1105. WOOL WASTES. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES: Mr. John P. Wood, representing the National Association of Wool Manufac- turers. Hearings : Page 3527. Rates suggested. The duties on top waste, slubbing waste, ring waste, garnetted waste, noils (carbonized and uncarbonized), thread and yarn waste, should bear the same ratio to the duty on scoured wool that the respective prices of these materials bear to clean new wools. The rates in the bill appear to be approximately correct for a 26-cent scoured wool duty. The rates on shoddy, wool extract, mungo rags, and flocks are not designed for either protection or revenue, but to prevent importation of these materials. The association approves a continuance of this policy. DIGEST OF TARIFF HEARINGS, H. R. 7456. 393 PARAGRAPH 1106. WOOL TOPS, ROVING, ETC. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OB HIGHER DUTIES : Mr. John P. Wood, representing the National Association of Wool Manufac- turers. Hearings : Pages 3530-3531. Costs and selling prices. For statement showing the differences between foreign and domestic costs of tops, see page 3570. Rates suggested. Alternatives : (a) Ad valorem basis. On wool tops, 1.1 times the rate per pound on scoured wool and, in addition thereto, if valued at not more than 60 cents per pound, 15 per cent; if valued at more than 60 cents per pound, 20 per cent. (b) Specific basis. On wool tops. 1.1 times the rate per pound on scoured wool, and in addition thereto 15 cents per pound : Pro- vided, That in no case shall the rate exceed 20 per cent ad valorem. (All of the foregoing based upon American valuation.) Remarks. Paragraph 1106 covers, aside from tops and roving, " wool which has been advanced in any manner or by any process of manufacture beyond the washed or scoured condition, n. s. p. f." This is in conflict with the basket provision for manufactures of wool n. s. p. f., paragraph 1120, and there is a possibility that manu- factures of wool will fall under paragraph 1106 at the relatively low rates of duty provided for tops. Roving, being further advanced in manufacture than tops, and in some sizes indistinguishable from the coarser sizes of yarn, should be included with yarns in paragraph 1107. PARAGRAPH 1107. WOOL YARN. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. John P. Wood, representing the National Association of Wool Manu- facturers, Philadelphia, Pa. Mr. Samuel S. Dale, representing the Carded Woolen Manufacturers' Asso- ciation, Boston, Mass. Hearings : Page 3531. Witness : Mr. John P. Wood, representing the National Association of Wool Manufacturers. ' Costs and selling prices. For statement of differences between domestic and foreign costs of worsted yarns, see pages 3547-3548. Rates suggested: Alternatives: (a) Ad valorem basis. On yarn and roving the duty shall be, if valued at not more than 60 cents per pound (American valuation), five-sixths of the duty on 1 pound of scoured wool ; if valued at more than 60 cents per pound, 1.2 times the duty on 1 pound of scoured wool; and in addition thereto, on all the foregoing numbers up to 40s, 25 per cent ad valorem, and on all the foregoing numbers over 40s, 30 per cent ad valorem. (b) Specific basis. The word " number," as used in this connection when applied to worsted yarns, shall be the number of hanks per 394 DIGEST OF TARIFF HEARINGS, H. R. 7456. pound, a hank being a measure of 560 yards of single yarn or roving ; and when applied to woolen yarns shall be the number of hanks per pound, a hank being a measure of 300 yards of single yarn or roving. On wool or tops advanced by process of manufacture to any number of sliver, or roving, of single yarn, if valued at not more than 60 cents per pound (American valuation), five-sixths of the duty on 1 pound of scoured wool ; if valued at more than 60 cents per pound, 1.2 times the duty on 1 pound of scoured wool; and in addition to all of the foregoing the following : Up to and including single 12s. 17 cents per pound. Single 13s to singlc^JOs, inclusive. 17 cents per pound plus one-half cent per number per pound for all numbers in excess of single 12s. Single 31s to single 60s, inclusive. 26 cents per pound plus 1 cent per number per pound for all numbers in excess of single 30s. Exceeding single 60s. 56 cents per pound plus 11 cents per number per pound on all numbers in excess of single 60s. On rovings and yarns advanced beyond the condition of singles by grouping two or more rovings or yarns together : Up to and including 12s. 3 cents per pound in addition to the foregoing duties on single yarns of corresponding numbers. 13s to 30s, inclusive. 3 cents per pound plus one-eighth cent per number per pound on all numbers in excess of 12s, in addition to the duties on single yarns of corresponding numbers. 31s to 60s, inclusive. 5i cents per pound plus one-fourth cent per number per pound on all numbers in excess of 30s, in addition to the duties on single yarns of corresponding numbers. Exceeding 60s. 12f cents per pound plus three-eighths cent per number per pound on all numbers in excess of 60s, in addition to the duties on single yarns of corresponding numbers. On any of the foregoing, when bleached, dyed, colored, stained, or printed, the duty shall be 10 cents per pound ; if singed or gassed, a further additional duty of 5 cents per pound. Hearings: Pages 3607-3608. Witness : Mr. Samuel S. Dale, representing the Carded Woolen Manufacturers' Association. Rates suggested. The witness advocates ad valorem duties on wool yarn. Without making a definite recommendation as to the height of the duty, he points out that if a duty of 50 per cent ad valorem, foreign valuation (which he believes would be fair to the wool growers and the wool manufacturers) were established on raw wool, the rate on yarn, calculated as explained by him, would be 65 per cent. (For reference to arguments by the witness in favor of ad valorem duties on wool and wool manufactures, see digest of his testi- mony, above, under the title " Introduction." PARAGRAPH 1108. LIGHT-WEIGHT WOOL FABRICS, WOVEN. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. John P. Wood, representing the National Association of Wool Manu- facturers; address, Philadelphia, Pa. Mr. Samuel S. Dale, representing the Carded Woolen Manufacturers' As- sociation; address, Boston, Mass. Hearings : Page 3531-3532. Witness : Mr. John P. Wood, representing the National Association of Wool Manufacturers. DIGEST OF TARIFF HEARINGS, H. R. 7453. 395 Hates suggested. On woven fabrics, weighing not more than 4 ounces per square yard, wholly or in part of wool, valued at not more than $1.25 per pound, 1.1 times the rate of duty on 1 pound of scoured wool of the first class, and, in addition thereto, 25 per cent ad valorem: valued at more than $1.25 and not more than $2.50 per pound, 1.4 times the rate of duty on 1 pound of scoured wool of the first class, and. in addition thereto, 30 per cent ad valorem; valued at more than $2.50 per pound, 1.5 times the rate of duty on 1 pound of scoured wool of the first class, and, in addition thereto, 33 per cent ad valorem : Provided, That if the warp of any of the foregoing is wholly of cotton or other vegetable fiber, the specific duty shall be 1 time the rate of duty on 1 pound of scoured w^ool of the "first class and the ad valorem duties shall be as provided in this paragraph. NOTE. Touching that class of the foregoing fabrics valued at not more than $1.25 per pound, there is a conflict in the duty recommended by the witness, possibly due to an error in printing. In the substitute paragraph a compen- satory duty of 1.1 times the rate of duty on 1 pound of scoured wool of the first class is recommended; but, in a condensed statement of the rates proposed, fol- lowing the substitute paragraph, the compensatory rate is given as 1.2 times the rate of duty on 1 pound of scoured wool of the first class. Hearings : Pages 3607-< Witness: Mr. Samuel S. Dale, representing the Carded Woolen Manufacturers' Association. Rates suggested. The witness advocates ad valorem duties on wool fabrics. While making no definite recommendation as to the rate of duty, he suggests that in case of the adoption of a duty of 50 per cent ad valorem, foreign valuation, on raw wool (which he believes would be fair), the ad valorem rate on wool cloth would be 75 per cent, cal- culated as explained by witness. (For reference to arguments of the witness in favor of ad valorem duties on wool and wool manufac- tures, see digest of his testimony, above, under the title " Introduc- tion.") PARAGRAPH 1109. HEAVY-WEIGHT WOOL, FABRICS, WOVEN. WITNESSES, AND INTEBKSTS BEPBESENTED. FAVOBING PBOPOSED OB HIGHEB DUTIES : Mr. John P. Wood, representing the National Association of Wool Manu- facturers, Philadelphia, Pa. Mr. Samuel S. Dale, representing the Carded Woolen Manufacturers' Asso- ciation, Boston, Mass. Hearings: Pages 3531-3532. Witness : Mr. John P. Wood, representing the National Associa- tion of Wool Manufacturers. Rates suggested. Woven fabrics weighing more than 4 ounces per square yard, and all manufactures of every description not specially provided for, composed wholly of wool, or of which wool is a com- ponent part, whether or not constituting chief value, valued at not more than 75 cents per pound, one and one-tenth times the rate of duty on 1 pound of scoured wool of the first class and, in addition thereto, 22 per cent ad valorem : valued at more than 75 cents but not more than $1.25 per pound, one and two-tenths times the rate of duty on 1 pound of scoured wool of the first class and, in addition thereto, 396 DIGEST OF TARIFF HEARINGS, H. R. 7456. 25 per cent ad valorem ; valued at more than $1.25 but not more than $2.50 per pound, one and three-tenths times the rate of duty on 1 pound of scoured wool of the first class and 30 per cent ad valorem ; valued at more than $2.50 per pound, one and one-half times the rate of duty on 1 pound of scoured wool of the first class and 33 per cent ad valorem. Remarks. The basket clause reading " all manufactures of every description, n. s. p. f.," etc., is inserted as a substitute for paragraph 1120, the so-called basket paragraph of the wool schedule. This is done in order that manufactures of wool shall be subject to compensa- tory duties in place of the single ad valorem rate of 25 per cent con- tained in paragraph 1120. It is suggested that braids, laces, galloons, embroidered wearing apparel, and other miscellaneous articles made wholly or in part of wool, included in the pending bill under paragraph 1430 (covering laces, embroideries, etc.), be restored to schedule 11 with a com- pensatory duty equal to that allowed upon woven fabrics. (While the witness does not explicitly so state, it seems to be implied that this transfer should be effected by inserting an eo nomine pro- vision for such articles in paragraph 1109, or else by inserting an eo nomine exemption of these articles in paragraph 1430, in which latter case they would fall under the basket provision for wool manufactures which the witness has recommended shall be inserted in paragraph 1109.) Hearings : Pages 3607-3608. Witness: Mr. Samuel S. Dale, representing the Carded Woolen Manufacturers' Association! Rates suggested. (See par. 1108.) PARAGRAPH 1111. PILE FABRICS OF WOOL. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OF HIGHER DUTIES: Mr. John P. Wood, representing the National Association of Wool Manu- facturers, Philadelphia, Pa. Mr. William L. Wemple, representing the Stroock Plush Co., and other pile fabric manufacturers, Newburgh, N. Y. Hearings : Page 3533. Witness: Mr. John P. Wood, representing the National Associa- tion of Wool Manufacturers. Rates suggested. Substitute paragraph as follows: Pile fabrics, cut or uncut, whether or not the pile covers the whole surface, made of wool or of which wool is a component material, whether or not constituting chief value, and manufactures in any form, made or cut from such pile fabrics, if valued at not more than $2.50 per pound, 1.3 times the rate of duty on 1 pound of scoured wool of the first class and 30 per cent ad valorem ; valued at more than $2.50 per pound, 1.5 times the rate of duty on 1 pound of scoured wool of the first class and 33 per cent ad valorem. Hearings : Pages 3417-3418. Witness : Mr. William L. Wemple, representing the Stroock Plush Co. (Xewburgh, N. Y.) and other pile fabric manufacturers. DIGEST OF TARIFF HEARINGS, H. R. 7456. 397 Rates suggested, Substitute paragraph as follows : Pile fabrics, cut or uncut, whether or not the pile covers the whole surface, and of which the pile is composed either wholly or in part of wool, and manu- factures in any form made or cut from such fabric. 36 cents per pound and 33J per cent ad valorem ; if the pile is composed wholly or in part of animal fibers other than wool as defined in this schedule, 40 per cent ad valorem. NOTE. The witness seems to include in " pile fabrics " goods having a nap raised by teasling or gigging. PARAGRAPH 1112. WOOL BLANKETS. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. John P. Wood, representing the National Association of Wool Manu- facturers. Hearings : Pages 3533-3534. Rates suggested. Substitute paragraph as follows : On blankets composed wholly or in part of wool, not exceeding 3 yards in length, valued at not more than 75 cents per pound, 1 time the rate of duty on 1 pound of scoured wool of the first class and 20 per cent ad valorem ; valued at more than 75 cents and not more, than $1.50 per pound, 1.1 times the rate of duty on 1 pound of scoured wool of the first class, and 23 per cent ad valorem ; valued at more than $1.50 per pound, 1.3 times the rate of duty on 1 pound of scoured wool of the first class, and 27 per cent ad valorem: Provided, That traveling and automobile rugs and robes shall be subject to the same rate of duty as cloths weighing more than 4 ounces to the square vard under paragraph 1109. Remarks. The provision for wool blankets contained in paragraph 1112, H. R. 7456, leaves in doubt the classification of blanketing exceeding 3 yards in length and is so restrictive as to color and finish that very few of the blankets of commerce would fall within the provision. These restrictive provisions were probably designed indirectly to exclude from the blanket paragraph such articles as traveling rugs and automobile robes, concerning the classification of which, under the present law, there has been considerable litigation. It is true, as the customs authorities contend, that traveling and automobile rugs should be classed as cloths, but that can be more simply accomplished by their specific enumeration in the cloth paragraph. PARAGRAPH 1113. FELTS, XOT WOVEN. WITNESS, AND INTEREST REPRESENTED. FA YOKING PROPOSED OR HIGHER DUTIES: Mr. John P. Wood, representing the National Association of Wool Manu- facturers. Hearings : Page 3534. Rates suggested. Substitute paragraph as follows: Felts, not woven, wholly or in part of wool, valued at not more than 75 cents per pound, 1 time the rate of duty on a pound of scoured wool of the first class and 20 per cent ad valorem ; valued at more than 75 cents and not more than $1.50 per pound. 1.2 times the rate of duty on 1 pound of scoured wool of the first class and 23 per cent ad valorem; valued at more than $1.50 per pound, 1.3 times the rate of duty on 1 pound of scoured wool of the first class and 27 per cent ad valorem. 398 DIGEST OF TARIFF HEARINGS, H. R. 7456. PARAGRAPH 1115. WOOL KXIT GOODS. (Kxix OUTERWEAR.) WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. John J. Phoenix, representing the National Knitted Outerwear Associa- tion. Hearings : Pages 3736-3749. Costs and selling prices. Wages average about 40 cents per hour in the domestic knit outerwear industry; in Germany, Austria, and Czechoslovakia, not over 4 cents per hour (pp. 3736 and 3737. For table comparing domestic with German and Czechoslovakian wages. see p. 3749). In 1913, when the domestic industry was paying skilled male operators $18 to $24 per week, German labor was receiv- ing from one-third to one-half these rates. German wages per week were : finishers and winders, $2 to $4 ; apprentices, from nothing to $2 ; knitted helper, male. $3 to $5 per week ; the experienced knitter, male, $6 to $10 (p. 3741). Dyed yarn, which is the knit outerwear manufacturer's raw mate- rial, was recently quoted in Germany at about 55 cents per pound ; in the United States it costs more than twice that, enabling the German manufacturer to start with a great advantage (p. 3740). Another difficulty of the manufacturer results from the rapid changes of style in this industry, and the limitations as to types and sizes of goods which can be produced by a single knitting' machine. Manu- facture and sale are in small units. A large amount of labor is in- volved in the mere handling of orders (pp. 3740-3741 and 3743). Size of industry. There are about a thousand manufacturers in the domestic industry, employing last year about 57,000 persons; they have developed in 20 years a business having a volume of about $280,000,000. The National Knitted Outerwear Association com- prises perhaps 400 of the 1,000 manufacturers in the industry. In Milwaukee, there are perhaps 8.000 or 10,000 persons in the knit- goods industry ; in the State of Wisconsin, as many more. In response to an inquiry as to whether knit gloves come from countries other than those mentioned above, the witness stated that they come also from Great Britain, but was unable to state in what proportion as compared with Germany or to state whether the Brit- ish glove sells in the United States for more than the German. He stated, however, that imports of knitted outerwear from Great Brit- ain are largely of the finer classes and types, appealing especially to the demands of style and. therefore, that they ought to pay more duty than the German : also that the domestic industry produces the types of outerwear made in Great Britain as well as those made in Germany (pp. 3745-3746). Rates suggested. The following substitute for subdivision 4 of paragraph 1115, H. R. 7456, is proposed, showing in italics th& changes in wording and in brackets the values and rates in the pend- ing bill : Outerwear and all other articles, including neckwear, Itathimj units, gloves, and mittens, knit or crocheted, wholly or in part, finished or unfinished, made of wool or of which wool is a component part, whether or not constituting' ch'ef value, valued at not more than [$2.50] $1.50 per pound, 30 cents per pound and, in addition thereto, [28] 35 per cent ad valorem; valued at more than $1.50 per pound and not more than $3 per pound, 36 cents per pound and, in DIGEST OF TARIFF HEARINGS, H. R. 745G. 399 addition thereto. >,2 per centum ad valorem; valued at more than [2.50] $3 per pound, 36 cents per pound and, in addition thereto, [33 J] 50 per centum ad valorem. The words "gloves and mittens'' in subdivision 2 of paragraph 1115 should be eliminated, for these items should not properly be classed with hosiery, covered in the same subdivision. The changes are recommended by the National Knitted Outerwear Association, in language, to make" the paragraph more definite and certain ; in rates, based upon American valuation, to afford adequate protection to the industry. Remarks. The National Knitted Outerwear Association favors the adoption of American valuation as provided in paragraph 402, H. R. 7456, believing that even high rates of duty will not protect this industry unless American valuation is adopted (pp. 3739-3740). PARAGRAPH 1116. WOOL WEARING APPAREL. WITNESSES. AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. E. H. Snyder, representing the National Association of Merchant Tailors of America, Washington, D. C. OTHER : Mr. William Goldman, representing Cohen, Goldman & Co. (clothing man- ufacturers), New York City. Hearings : Pages 3733-3734. . Witness : Mr. E. H. Snyder, representing the National Association of Merchant Tailors of America. Rates suggested. The ad valorem rate in paragraph 1116, on clothing and articles of wearing apparel valued at more than $5 per pound, should be changed from 30 per cent, as now provided, to 50 per cent. In the pending bill, the rates on wool clothing are inconsistent with the rates on the cloth. (Par. 1109.) The additional duty on cloth- ing, in relation to the cloths, is only 2^ per cent, a mar-gin far too narrow when it is considered that the cost of labor in the clothing industry is three times the cost in England. Remarks. The association is opposed to American valuation (p. 3429). It is also opposed to the raising of the maximum limitation to $250, as regards the amount of wearing apparel entitled to free entry, as covered in the last proviso in paragraph 1678, free list. Hearings : Pages 3708-3719. Witness : Mr. William Goldman, representing Cohen, Goldman & Co. (clothing .manufacturers). New York City. Rates suggested. Witness, testifying in favor of a lower duty on raw wool in the pending bill (see digest of his testimony, herein, under pars. 1101 and 1102), stated (p. 3710) that the tariff on cloth- ing is not of vital concern to the clothing manufacturers, since cloth- ing does not enter largely into international trade ; is produced here under keenly competitive conditions; and is sold, in the main, far below the tariff wall. 400 DIGEST OF TARIFF HEARINGS, H. R. 7456. PARAGRAPH 1117. WOOL FLOOR COVERINGS (CHENILLE AXMINSTERS). WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OB HIGHER DUTIES : Mr. Henry I. Magee, representing American carpet manufacturers, Phila- delphia. Hearings : Pages 3753-3761. Costs and selling prices. '* * * * The proportion of labor to the whole cost is greater in a chenille carpet or rug than in any other wool floor covering in popular use, and runs as high as 43 per cent of the total cost, including overhead." The average chenille Axminster sells at retail at about $110. Size of industry. This type of floor covering has been manufac- tured in Great Britain for more than 60 years. It is a comparatively new industry in this country. About 25 years ago McLeary, Wallin & Crouse, of Amsterdam, N. Y., undertook the manufacture of chenille goods, but were unable to compete with the foreign industry. Encouraged by a more favorable tariff, the manufacture was again undertaken in 1910. During the war, owing to the removal of for- eign competition and the increased domestic demand, the industry grew rapidly. Most of the overseers, etc., are from the British Isles. There are now four concerns manufacturing chenille carpets and rugs, and in one (the largest) more than 500 operatives are em- ployed in this particular department. One company produced, in 1914, 127,000 square yards and, in 1920, 344,000 square yards. Rates suggested. On chenille Axminster carpets and rugs, the duty to be increased (from 5 cents per square foot plus 30 per cent in H. if. 7456) to 10 cents per square foot plus 50 per cent ad valorem. PARAGRAPH 1118. WOOL FLOOR COVERINGS. Wilton Carpets and Rugs. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Henry I. Magee, representing American carpet manufacturers, Phila- delphia, Pa. Hearings: Pages 3753-3761. Costs and selling prices. Relative to that portion of paragraph 1118 covering Wilton carpets and rugs, the following comparison was made between British and domestic Wiltons : The foreign price of standard English worsted rugs, such as the Templeton Super, is 13 9s. 4d. With exchange at $4. this would be $53.87. Add $19A2 duty at 25 per cent on the American valuation of $76.50 for comparable rugs, such as Hardwick & Magee's French Wiltons and WhittalFs Anglo-Persian. To this add $1.50 to cover , freight, etc.. and 3 cents per square fopt, or $3.24 (presumably for importers overhead and profit), and a total of $77.73 is reached as the wholesale cost of a Templeton Super in this country. But with a duty of 28 per cent on carpet wool the increased cost of worsted yarns for domestic rugs will be 10 cents per pound, or 25 cents per running yard, equal to $4 per rug. so that the price given above for DIGEST OF TARIFF HEARINGS, H. R. 1456. 401 the domestic rug, namely, $76.50. would be increased to $80.50. The foreign rug would, therefore, undersell the domestic by almost $3. Rates suggested. On Wilton carpets and rugs tlie duty to be increased (from 3 cents per square foot, plus 25 per cent ad valorem in H. R. 7456) to 3 cents per square foot, plus 30 per cent ad valorem. Fiber and Wool-Fiber Floor Coverings. WITNESS, AND INTEREST REPRESENTED. REQUESTING RECLASSIFICATION : Mr. Frank E. Carstarphen, representing manufacturers of fiber and wool- fiber rugs, New York City. Hearings : Pages 3761-3766. (NOTE. The witness's testimony relates only to fiber and wool-fiber rugs, which, so far as paragraph 1118 is involved, would fall within either subsec- tion 2 or subsection 3 thereof. It does not relate to paragraph 1118 as a whole. ) Size of industry. The six companies belonging to the Grass & Fiber Rug Manufacturers' Association, represented by witness, pro- duce perhaps 90 per cent of the fiber and wool-fiber rugs made in the United States. They employ about 2.000 persons, pay annually about $2,000.000 in wages, and have a total capitalization of $5.260,000 (p. 3766). There are no imports of fiber and wool-fiber rugs as such Competition comes from the imported rice-straw rugs, which com- pete directly with the domestic grass rug, and, because used for the same purposes indirectly with the fiber and wool-fiber rug (pp. 3764-3765). Rates suggested. As regards classification in the act of 1913 of fiber and wool-fiber floor coverings, the witness quotes from pages 108 and 109, Tariff Information Survey J-3, entitled " Floor coverings other than wool," as follows : There being little or no importation of fiber or wool-fiber floor coverings, the question of classification of these goods is, as matters now stand, largely an academic question. Development of foreign competition is not inconceivable, however, and it may be well to indicate under which provisions of the present tariff such goods would in all probability fall, if imported, and the changes in these provisions which have been recommended by the Tariff Commission. From the standpoint of the present tariff law fiber and wool-fiber floor cover- ings as now produced in the United States fall into two main classes: (1) All- fiber floor coverings, made on plain looms, and (2) ingrain floor coverings, whether two-ply or three-ply and whether in part of wool or wholly of other materials. Since there is no specific provision for floor coverings of the first class, such goods would presumably fall under the general provisions of either paragraph 323 or paragraph 332, depending on the grade of paper used. These provisions read as follows: " PAR. 323. * * * tissue paper * * * and articles manufactured from any of the foregoing papers or of which such paper is the component material of chief value, 30 per cent ad valorem. " PAR. 332. * * * and all papers and manufactures of paper or of which paper is the component material of chief value, not specially provided for in this section, 25 per cent ad valorem." Ingrain carpets, whether two-ply or three-ply and irrespective of component materials, are at present provided for as follows : " PAR. 298. Treble ingrain, three-ply, and all-chain Venetian carpets, 20 per cent ad valorem. " PAR. 299. Wool Dutch and two-ply ingrain carpets, 20 per cent ad valorem." Ingrain rugs or art squares are covered by the following provision, except that it is to be noted that such articles must be composed in part of wool : 402 DIGEST OF TARIFF HEARINGS, H. R. 7456. " PAR. 303. Mats, rugs for floors, screens covers, hassocks, bed sides, art squares, and other portions of carpets or carpeting, composed wholly or in part of wool and not specially provided for in this section, shall be subjected to the rate of duty herein imposed on carpets or carpeting of like character or de- scription." Unless ingrain rugs or art squares containing no wool were construed to be covered by the foregoing provisions because of similitude, they would be classified elsewliere according to the leading material of which composed. It is assumed by the witness that wool-fiber rugs will fall under paragraph 1118 in the pending bill (in subsec. 2, if classified as in- grain; in subsec. 3, if not so classified) ; but as regards the paper (or "fiber") rugs containing no wool, the witness believes there is un- certainty as to whether they would be classed under either paragraph 1118 or 1020 (this latter covering common straw mats and mattings and all other floor coverings not specially provided for). In case such uncertainty is deemed to exist, witness recommends that a special provision be added to paragraph 1118, as follows: Floor coverings of which the chief component part either in weight or value is paper, 2 cents per square foot and 25 per cent ad valorem. PARAGRAPH 1120. MANUFACTURES OF WOOL, N. S. P. F. WITNESS, AND INTEREST REPRESENTED. REQUESTING RECLASSIFICATION : Mr. John P. Wood, representing the National Association of Wool Manufac- turers. Hearings : Pages 3532 and 3534. Remarks. This paragraph was designed as a basket provision for the wool schedule, but includes no wool compensatory duty, and its ad valorem rate is not in accordance with the requirements for a catch-all paragraph. For these reasons the witness recommends that it be incorporated as a basket provision in the cloth paragraph (1109), where it has heretofore habitually been. SCHEDULE 12. SILK AND SILK GOODS. PARAGRAPH 1201. SILK. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. M. C. Migel, representing American Silk Spinning Co., Providence, R. I., and five others. Mr. O. D. Frost, representing Champlain Silk Mills, 225 Madison Avenue, New York City. Mr. Frederick F. Kip, president, representing Salts-Griswold Mills, Darby, Pa. Hearings : Pages 3795-3803. Witness: Mr. M. C. Migel, representing American Silk Spin- ning Co. Costs and selling prices. American dressers are now paid from $40 to $45 per week, an increase over prewar wages of about 30 to 40 per cent. In France similar labor is paid 20 francs per day, which, figuring 1\ to 8 cents to the franc, would make the rate about $9.60 DIGEST OF TARIFF HEARINGS, H. R. 7456. 403 per week. In Italy this labor is paid 30 lire per day, which would amount to about $7.80 per week. Comparability. A large part of the import of peignees, the only important import item covered by this paragraph, is brought in by a recently established spun silk mill using foreign-made peignees. This mill is owned jointly by three members of the European spun- silk combination, which controls 90 per cent of the European peignee production. As the cost of making peignee is 60 per cent of the total cost of making spun silk, this concern has an advantage over manu- facturers using domestic peignee. Japanese peignee has also been imported by domestic spinners, but as yet it has not been found very reliable. Rates suggested. Fifty-five to 60 cents per pound specific with an an ad valorem minimum provision of at least 30 per cent on Ameri- can valuation. Hearings : Pages 3791-3795. Witness : Mr. O. D. Frost. Costs and selling prices. At present the average cost of making peignees in the United States is about $2.50 per pound. Of this about 87^ cents, or 35 per cent, represents labor costs and about $1.62|, or 65 per cent, material cost. In Japan the cost of labor, allowing as much as 50 per cent lower efficiency in Japan than here, is about 20 per cent of domestic. For instance, the Champlain Silk Mills employ girls in their Yokohama packing plant at wages of 65 sen, or 32^ cents, per day about 10 per cent of the wages of similar quality labor in this country. Dressers in the United States receive $6.18 to $8.25 per day; in France, from 20 to 25 francs per day, which at the present rate of exchange would be $1.60 to $1.90. Hearings : Pages 3803-3813. Witness: Mr. Frederick F. Kip, representing Salts-Griswold Mills, and others. Rates suggested. The duty provided by this paragraph should be 55 cents per pound plus a minimum ad valorem provision of 30 per cent on American valuation. It is imperative that an adequate specific duty be provided. In making peignee waste silk is put on a large circular frame, which, as it revolves, allows the material to come in contact with a smaller and faster revolving frame, which combs out the short fibers and parallels the long ones. This process is known as dressing. In Europe six or eight drafts or combings are made. Since a combina- tion of mills controls 95 per cent of European peignee production, one mill can use, itself, the first two drafts and sell the remainder as a by-product at about one-fourth its actual value to a spinning mill affiliated with the combination. Members of the trust can, therefore, export to the United States short drafts at below cost prices, which they can prove to be market price for sales between mills in Europe. Without the specific rate it will thus be possible for them to dominate the domestic situation and put American producers out of business whenever they choose. 404 DIGEST OF TARIFF HEARINGS, H. R. 7456. PARAGRAPH 1202. SPUN SILK. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Horace B. Cheney, representing the Silk Association of America, 354 Fourth Avenue, New York City. Mr. M. C. Migel. representing the American Silk Spinning Co., Provi- dence, R. I. Mr. C. D. Frost, representing the Champlain Silk Mills, 225 Madison Ave- nue, New York City. Mr. Frederick F. Kip, representing the Salts-Griswold Mills, Darby, Pa. Hearings : Pages 3771-3790 ; 3852-3854. Witness : Mr. Horace B. Cheney, representing the Silk Association of America. Costs and selling prices. The average earnings of spinners at the present time in the Cheney Bros, plant are 53^ cents per hour. For the whole country in 1920 the highest wage for spinners was $5.70 per day ; the lowest, $2.50 per day. In Switzerland the average was 10.5 francs per day, which at normal exchange would be $2.10; at current exchange, $1.65. Hearings : Pages 3795-3803. Witness: Mr. M. C. Migel, representing the American Silk Spin- ning Co. Costs and selling prices. To-day domestic prices of good qualities of yarn vary from $4 to $6 a pound. European prices are fixed by a combination composed of three large concerns which together own 30 or more mills in Europe. While they have separate agencies here, their prices are uniform. In April, 1921, they took advantage of their position to lower prices to a point below the cost of production and in that way to dispose of large quantities of yarn in this country. ' Domestic prices were thus forced down $1 per pound and domestic mills had to close. (For data on peignee costs, stated to make 60 per cent of total spun silk labor costs, see testimony under par. 1201.) Size of industry. American manufacturers produce annually spun silk valued at approximately $30,000,000. Imports in 1920 amounted to approximately $15,000.000, or 50 per cent of the domestic manu- facture. Of the imports, 90 per cent was obtained from the spun- silk trust referred to above. Rates suggested. A minimum ad valorem duty of 32.5 per cent on American valuation, with the specific rates of H. R. 7456 retained. Remarks. The combination above referred to has recently estab- lished in this country a mill of its own and is using imported peignee in making its yarns. (See testimony under par. 1201.) Hearings : Pages 3791-3795. Witness : Mr. O. D. Frost. Costs and selling prices. (See testimony under par. 1201.) Size of industry. (United States and Japan.) In 1920 Japan produced 6,697,000 pounds of spun silk, in addition to 2,431,000 pounds of noil yarns yarns made from the by-products of the spin- ning industry. The increase in production of spun silk in 1920 over 1919 was 67 per cent. During the war the Japanese dressing plants were developed, followed, since the war, by spinning plants whose present capacity is practically equal to that of this country, or from DIGEST OF TARIFF HEARINGS, H. R. 7456. 405 7 to 7-| million pounds per year. These plants are therefore* large potential competitors. The bulk of imports now, however, come from Europe and are sent here by the large silk-spinning combination. The total imports in 1920 were 3,400,000 pounds in round figures. Rates suggested. The retention of the specific rates of H. R. 7456, with an increase in the catchall clause to 32^ per cent ad valorem on American valuation. Remarks. While not generally considered in this country a key industry, about 80 per cent of domestic spun-silk production was used during the war in the manufacture of cloth for cartridge bags to hold the powder charge of big guns. It is necessary, therefore, to maintain the industry for war purposes. Hearings : Pages 3803-3813. Witness: Mr. Frederick F..Kip, representing the Salts-Griswold Mills. Rates suggested. On undyed single yarns in skeins, cops, or warps there should be provided a minimum ad valorem catchall clause by inserting in House bill, page 126, line 23, after the word " pound," the words " Provided, That none of the foregoing shall pay a less rate of duty than 31^ per cent, American valuation " ; on other yarns the minimum provision should be 35 per cent, American valuation, instead of the 26 per cent in the House bill (p. 127, line 8), a rate which, a? the bill now stands, applies to single and ply yarns in all conditions. PARAGRAPH 1203. THROWN SILK. WITNESS, AND INTEREST REPRESENTED. FAVORING PEOPOSED OR HIGHER DUTIES : Mr. Frederick F. Kip, representing the Salts Textile Manufacturing Co., Bridgeport, Conn. Hearings : Pages 3803-3813. Rates suggested. The ad valorem minimum rate provided in this paragraph, House bill, page 127, line 23, should be increased from "12 to 15 per cent on American valuation. PARAGRAPH 1204. SILK SEWING THREAD. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Frederick F. Kip, representing the Salts Textile Manufacturing Co., Bridgeport, Conn. Hearings : Pages 3803-3813. Rates suggested. The ad valorem minimum upon sewing silk in the gum. House bill, page 128, line 4, should be increased from 20 to 25 per cent on American valuation; and upon sewing silk un- gummed, House bill, page 128, line 8, from 26 to 30 per cent on American valuation. 7713422 27 406 DIGEST OF TARIFF HEARINGS, H. R, 7456. 'PARAGRAPH 1205. SILK FABRICS WOVEN IN THE PIECE. WITNESSES, AND INTERESTS EEPEESENTED. FA YOKING PROPOSED OR HIGHER DUTIES : Mr. Horace B. Cheney, representing the Silk Association of America, 354 Fourth Avenue, New York City. Mr. Ernest J. Ruegg, representing Schwa rzenbach, Huber & Co., 470 Fourth Avenue, New York City. FAVORING LOWER DUTIES : Mr. Samuel Kridel, representing manufacturers of silk, as well as traders, New York City (also requesting reclassification). Mr. Alfred Kohlberg, representing himself, as an importer, Bayside, Long Island, N. Y. (also requesting reclassification). Mr. Armin C. Stapfer, New York City (also requesting reclassification). Mr. H. E. Miles, chairman of the Fair Tariff League. Hearings: Pages 3771-3790; 3852-3854. Witness : Mr. Horace B. Cheney. Costs and selling prices. Labor costs in Cheney Bros.' plant in South Manchester, Conn., are now 160 per cent higher than in 1914. Before the war the average wage was 20.9 cents per hour; early in 1920 it was 60 cents ; it is now 51 cents. Selling prices, on the other hand, have been reduced by one-half since the spring of 1920. Japanese prices on 6^ momme habutai habutai is the largest im- ported fabric were $1.15 per yard in January, 1920; 45.7 cents in July; before the end of the year it fell to 36 cents; and since then have risen to something over 50 cents. At the request of Senator Calder, the witness inserted in his re- marks the tables on wages in the United States and foreign coun- tries presented by him at the Ways and Means Committee hearings. For the full tables see page 3788. 'Comparable data contained therein may be summarized as follows : Daily wages. [Dollars.] United States. Japan. Swit- zerland, aver- age for 1920. 1 Italy, aver- age for 1920.1 1913 1920 1913 1920 High. Low. High. Low. High. Low. High. Low. Weavers 3.00 1.40 4.50 1.00 .50 2.00 8.25 5.10 7.90 4.50 2.75 6.25 0.20 .10 .40 0.10 .08 .20 1.25 .70 2.00 0.60 .50 1.00 1.98 1.57 3.79 0.62 .39 .94 Winders Machinists i At current rates of exchange. Size of industry. Census reports for 1919 show a total of 127,000 wage earners in the whole silk manufacturing industry. Reports obtained by the Silk Association of America indicate that of this number there were unemployed in all branches of silk manufacture 54,000 on January 1, 1921; 28,000 on September 1, 1921; and 31,000 on September 26, 1921. The silk- weaving section of this industry is, however, operating at not more than 50 per cent capacity. In DIGEST OF TARIFF HEARINGS, H. R. 7456. 407 the spring of 1921, 55 per cent of the looms were in operation, and in Xovember, 1921, approximately the same percentage. In both periods, however, about 65 per cent of the active looms were run- ning on short time. Comparability. The statements made to the committee 'to the effect that goods of the same character as these imported from China and Japan are never made here are incorrect. This is shown by the samples submitted of domesticated and wild silk cloths, of identical construction, produced both in the United States and in the Orient. The statement that silk goods with lamme or tinsel filling are not made in this country is also erroneous. Despite being at a disadvantage because of the low duty at present im- posed upon this class of goods, many domestic mills are engaged in their manufacture. The duty on them should, however, be in- creased in as great a proportion as the duties in the silk schedule are increased. It should be emphasized, moreover, that goods do not have to be of identical character to be competitive; any cloth is competitive with another cloth when it displaces the other in public use. Not only has the increased import, under the Underwood law. of habutais and pongees stopped the manufacture of those cloths in the United States but it has caused loss of business in other lines. There was, for instance, at one time a large domestic manufacture of florentine, a fabric made with reeled silk warp and spun silk filling. It was largely driven off the market by the enlarged use of Japanese habutai, a lighter cloth of somewhat different appearance. Habutais are also competitive with foulards, even though foulards are dif- ferent in construction. The difference in appearance between a foulard and a habutai, when each is printed and made up into a dress, is not sufficiently great to make a woman care very much if she substitutes one for the other. Rates suggested. The specific duties of the House bill, even though too low to be applicable under present prices, should be retained, and the ad valorem minimum provision should be increased from 31 per cent to 38 per cent on American valuation, or to 55 per cent on foreign valuation. Prices here and in foreign countries have doubled since 1913, and the difference between them has therefore also doubled. Hence, in order to afford the same protection as given by the specific rates of the Payne-Aldrich law, in the new law those rates would have to be doubled. The House committee, however, not thinking it ex- pedient to make such increase, adopted without material change the Payne-Aldrich rates, which would not, except on special types of goods, be operative at the present level of prices. The great bulk of imports would come in under the minimum ad valorem pro- vision, placed by the House at 31 per cent on American valuation. Silk manufacturers are very reluctant to abandon the principle of specific rates, since such rates have the advantage of being much more reasonable in application, easier of collection, impossible of evasion, and of helping to equalize the exchange rates of various countries. If, however, it is not feasible to raise the specific rates to such figures as to make them protective, it is requested that those provided by the House bill be retained, it being desirable that the 408 DIGEST OF TARIFF HEARINGS, H. R. 745C. Government obtain reports showing imports under the different specific brackets. In this way it will be possible to determine a rea- sonable basis for specific schedules and to provide Congress with ade- quate data for the future revision of specific rates. If the ad valorem minimum catchall has to be relied upon because of the low specific rates, then it should be taken into account that there is a certain amount of undervaluation and that not all of the duty on an ad valorem basis can be collected. It should be remem- bered, also, that when specific rates were enacted the ad valorem catchall was placed at a lower figure than the ad valorem rates which had formerly been the sole duty. It was intended to catch those things which were not covered on the specific basis. Under the Payne- Aldrich law, the ad valorem catchall was 45 per cent and the ad valorem equivalent of the specific rates 55 per cent. The strict 45 per cent duty of the Underwood law thus meant a con- siderable reduction in duties. Under present circumstances, with specific rates too low to be protective, the ad valorem catchall should be made the same as an ad valorem equivalent of the Payne- Aldrich 55 per cent on foreign valuation or about 38 per cent in terms of American valuation. The request of Mr. Kridel, Mr. Kohlberg, and others that woven goods made of tussah, or wild silk, be admitted at specific rates lower than those of the House bill and less than those upon other silk cloths is based upon questionable data. Prices are named on such goods of about $2.50 per pound, despite the fact that 8-cocoon tussah of standard grade, such as is used in their production, is to-day quoted on the New York market at prices ranging from $4.30 to $4.65 per pound. With the gum removed, the raw silk content of a pound of pongee would, therefore, be worth from $5 to $5.25 per pound, and a pound of such goods could not, in the opinion of the witness, be legitimately imported to-day at a lower value than $6.50 per pound, at which figure the duty under the present 45 per cent rate would be much higher than the ad valorem equivalents of the specific rates applicable to them under H. R. 7456. Separate provision for pongees by designating them as cloths made of tussah or wild silk is impracticable. There are many varieties of wild silk, some of them of the same color as some varieties of domesticated silk, and it would be extremely difficult for the best expert to differentiate between all the different types when woven into goods and colored. There is no one who could do so with cer- tainty, especially as there are goods in which wild silks are mixed with domesticated silks. As to Mr. Kridel's statement that the provision for an additional duty on cloths containing threads or yarns of over 30 turns of twist to the inch is impracticable because of the difficulty of determining the amount of twist, the reply is that, on the contrary, by the use of a twisting machine the number of twists per inch can be very quickly and accurately ascertained. Remarks: Further references to Japanese conditions include the statement that the average annual exports of habutai from Japan to the United States increased from 9,428,503 square yards in the five years, 1910-1914, to 24,614,546 square yards in the succeeding five- year period. Japan is steadily improving her methods of produc- tion and substituting power looms for hand looms, as is evidenced DIGEST OF TARIFF HEARINGS, H. R. 7456. 409 by the following table, showing the total imports of textile machinery into Japan from all countries : 1915 ------------------------------------------------ $877. 344 1916 ------------------------------------------------ i, 290, 582 1917 ------------------------------------------------ 2, 744, 182 1018 ------------------------------------------------ 4, 684. 176 1919 _________________________________________________ 8, 064, 734 For two years, 1908 and 1909, data are available showing the increase in power looms and the decrease in hand looms engaged in Japanese habutai manufactures. In 1908 there were 4,930 power looms and 42.637 hand looms; in 1909, 8,127 power looms and 40,075 hand looms. In 1908, 1,087,104 pieces of habutai were produced on power looms and 1,350.468 on hand looms; in 1909, 1,394,016 on power looms and 1.258,236 on hand looms. Another feature referred to is the fact that at one time the French silk industry produced goods similar to the Japanese specialty of habutai. The dyeing industry in that country, being more power- ful politically than the weaving industry, secured a great reduc- tion of duty and, for a time, the free importation of cloths of this class. The result was that France entirely lost that section of her weaving industry, although very much more advantageously situ- ated than the United States for competition. To-day a large part of the goods brought here from France are woven in the Orient, dyed and finished in France, and exported as French goods. (See pp. 3632 and 3633 for details of French duties on silk manufactures from 1873 to 1910.) Available figures for the first 10 months of 1921 indicate that the volume of imports into the United States was 50 per cent greater than in any of the preceding four years. The witness believes that the real effect of the law of 1913 has never had any opportunity to be thoroughly demonstrated, because of the disturbed conditions which have existed since that time. Even before the beginning of hostilities in Europe, however, there were evidences of a decided increase in the importation of silk goods, particularly from the Orient and more particularly from Japan. The abolition of specific duties worked for greater advantage to countries of low labor cost than to those of high labor cost. Furthermore, it is difficult to de- termine the value of many oriental goods, because little is known as to their costs of production. The witness ascribed the difference between his figures on im- ports and those presented by Mr. Kridel to his own use of quanti- ties. while Mr. Kridel had used values. Prices were cut in half, so that his figures show a decrease, although in quantity there was a decided increase. As to reexports, mentioned by Mr. Kridel as having occurred in 1920, the reply is that such reexports as occurred resulted from the cutting in half of prices. The Japanese found it profitable to re- export the goods to Japan, and later ship them back here so that the duty would be assessed upon the lower price. Hearings: Pajrps 3SI9 -3fi<>6. Witness: Mr. Ernest J. Ruegg. representing Schwarzenbach. Huber & Co. Costs and selling prices. In China the price of pongees runs from 25 cents up. The cloth that can be bought in China for about 25 410 DIGEST OF TARIFF HEARINGS, H. R. 7456. cents would cost, in Schwarzenbach, Huber & Cp.'s mills, 85 cents per yard. In making this cloth, a weaver, earning 42 to 45 cents per hour 3 would probably tend three looms, upon each of which would be produced 10 to 12 yards per loom per day. The best information obtainable is that Japanese wages are about 10 per cent of American and, making a very liberal allowance for differences in efficiency of labor, the Japanese conversion cost is not over 25 per cent of the American. Japanese mills produce about the same yardage in a working day of 11 hours as United States mills do in a working day of 8 hours. As for materials, American mills buy raw silk in the same market as France, England, and other countries. The Chinese and Japanese, in the witness's opinion, have the considerable advantage of a local market, with a resulting sav- ing in transportation costs. Size of industry. Schwarzenbach, Huber & Co., who began busi- ness in 1883 and own a number of plants, employ, when running full capacity, about 5,000 people. The firm expanded its facilities during the war period, the latest additions being two new plants erected about three years ago. Now, however, with imports increas- ing, it is unable to run full capacity. Comparability. This company does not now manufacture goods exactly like the imported pongees and habutais, although, before the present tariff act went into effect in 1913 it did produce consider- able quantities of both habutais and pongees. The Payne- Aldrich tariff was so fair that orders for this class of goods were sometimes divided evenly between domestic manufacturers and importers. The duty was neither too high nor too low ; it gave both a chance. When the present 45 per cent duty went into effect, Schwarzenbach, Huber & Co. had immediately to discontinue the manufacture of this class of goods goods for which a very excellent trade had been built up, with a lot of good will and many connections. In order to hold this trade, it has since that time regularly imported from Japan both habutais and pongees, and will continue importing them until the adoption of a tariff which permits their manufacture here. At pres- ent, imports are increasing, although domestic mills can not keep going at anything like full capacity. , While the goods produced here now are not closely similar to those imported, the imports are competitive because, if they did not come in, domestic silks would be used in their place. Rates suggested. The minimum ad valorem provision of this paragraph, should be increased to 38| per cent on American valua- tion, or 55 per cent on foreign valuation. Domestic silk weavers would, of course, prefer to have the specific duties raised to such an extent that they would become operative, but this would require so great an increase that it could hardly be asked for. The least that could be done would be to put the ad valorem provision at a figure equal to the ad valorem equivalent of the Payne- Aldrich law, which worked out to about 55 per cent. Doing this would help some, though, in the opinion of the witness, not muHh. The specific rates as they now stand in the House bill would not be operative except in one or two insignificant instances. Mr. Kohlberg has stated that Chinese pongees would be excluded through the ac- DIGEST OF TARIFF HEARINGS, H. R. 7456. 411 tion of these specific rates. Even if the specific duty on them should turn out to be 115 per cent, as Mr. Kohlberg states, these goods could not be produced here. It would take a duty equal to at least 200 per cent ad valorem, which would mean an^ increase in the House bill specific rates of something like 75 per cent. Neither the specific rates of the House bill nor the 38 per cent American valuation will keep these goods out, Remarks. Imports of silk cloths are constantly increasing. For the first 10 months of 1919, the import was 2,000,000 pounds; for the first 10 months of 1920, 1,500,000 pounds; and for the first 10 months of 1921, 3,852,000 pounds. Hearings: Pages 3827-3854. Witness: Mr. Samuel Kridel, representing manufacturers of silk, and traders. Cost and selling prices. It is very difficult to secure actual cost figures on American fabrics. The Silk Association of America sent out to all manufacturers of broad silk a letter asking for costs on four specifically described fabrics, for which the raw silk price basis was prescribed. Returns upon the same fabric showed as much as 40 per cent difference between different concerns. Upon a colored taffeta of 168 threads per inch of warp and 92 threads per inch of filling the costs supplied varied from $0.965 to $1.318 per yard ; upon a black messaline of 162^ threads per inch of warp and 84 threads per inch of filling, from $0.908 to $1.25 per yard; upon a crepe de chine of 120 double threads per inch of warp and 80 threads per inch of filling, from $1.08 to $1.50 per yard; upon a crepe Georgette of 80 single ends per inch and 84 threads per inch of filling, from $0.84 to $1.10. For detailed description of the fabrics and a complete list of the cost variations, see pages 3832 and 3833. Japanese wage costs have increased from 300 to 350 per cent over the prewar basis. From careful investigation, it would appear that wages in Japan are about one-sixth of American, not one-tenth, as stated by some witnesses. In efficiency, the Japanese are at least from 50 to 70 per cent below us. The wages paid reeling girls in Japan, as well as conditions existing in the reeling industry, as outlined by Mr. Cheney, have no bearing as a basis of comparison of wages paid in the domestic weaving industry. Low wages and inefficiency usually go hand in hand. It makes a vast difference whether a weaver operates a slow and primitive loom in Japan or three or four modern high-speed looms in this country. A loom in this country produces two or three times as much in the same day as do the primi- tive slow-weaving Japanese looms. It is doubtful whether Japanese imports of textile machinery are for use in the silk industry ; they are probably for use in making cotton goods. In the silk industry the Japanese do not seem inclined to adopt modern methods. On page 3833 will be found cost data on Japanese habutai and pongee. The witness submitted a Japanese commodity index (p. 3833) for each month from January, 1913, to November, 1920, inclusive, showing an increase from 134 in January, 1913, to 425 in March, 1920. In April, 1920, a decline began which carried the index to 292 in November. He also filed a table showing prices, present duties, 412 DIGEST OF TARIFF HEARINGS, H. R. 7456. and proposed Fordney bill duties upon three grades of Chinese pongee, summarized below; for the full table see page 3833. Description. Price per piece. Present duty per piece (45 percent). Fordney duty per piece ($3 per pound). Per cent of Ford- ney duty to foreign value. Honan poi igee, 39 ounces to pie^e $6 60 $2 97 $7 31i 110 Ninghai ft rsts, 123 ounces to piece 16.67 7.49J 23.06i 132 Shantung, 35 ounces to piece 2.794 1.24J 6.56| 236 The witness submitted data on French and Swiss costs, wages, and working conditions, referring to a table on pages 3834 and 3835. Swiss wages and living costs show especial increases over pre-war rates. Size of industry. In 1914 the silk industry of America supplied 88 per cent of the total domestic consumption of silk goods, including knit goods. During the six years 1914-1919 the disparity between imports and exports grew steadily greater notwithstanding the lower duties of the Underwood law. The total imports in 1919 equaled only 6 per cent of the domestic production. The war, in the opinion of the witness, had nothing whatsoever to dp with this. The witness submitted tables (see Hearings, pp. 3831 and 3832) showing the growth of the domestic silk manufacturing industry from 1899 to 1919 and domestic production in 1914 and 1919. For comparison with the latter figures, he gave a table showing imports of various silk products in 1914 and 1919. These tables show in 1914 for silk fabrics in the piece a domestic production valued at $137,- 720,000 and an import valued at $11,984,821 ; in 1919, a domestic pro- duction valued at $391,226,000 and an import valued at $28,416,781. Comparability. None of the goods from Japan and from other countries are similar to those manufactured in the domestic mills in which the witness is interested. The imported goods come in com- petition with domestic goods only in the sense that imported ma- terial might be replaced by domestic products. When, as has been stated by witnesses, they formerly produced goods like the imported habutai and pongees, what they made was similar appearing but not the same goods. The oriental habutais and pongees are made from silk of such low grade that it could not be used here. Rates suggested. The 45 per cent ad valorem foreign valuation duty at present in operation under the Underwood law should be re- tained. If, however, specific duties should be adopted a special para- graph should be enacted covering fabrics composed of tussah or wild silk. Upon these cloths the specific rates of the Fordney Act would run, as was shown in the tables given above under " Costs and selling prices," from 110 to 236 per cent on foreign value and would, in the witness's opinion, be prohibitive. A suggested paragraph covering these goods follows : Woven fabrics in the piece, composed wholly or in chief value of tussah or wild silk, weighing more than 1 T V ounces per square yard, but not more than 2 ounces per square yard, if in the gum, $1.75 per pound ; ungummed. wholly or in part, $2.25 per pound ; if dyed or printed in the piece or further advanced, $2.50 per pound ; if weighing more than 2i ounces, but not more than 8 ounces per square yard, if in the gum, $1.50 per pound ; if ungummed wholly or in part, $1.75 per pound ; if dyed, printed, or further advanced, $2 per pound. DIGEST OF TARIFF HEARINGS, H. R. 7456. 413 The provision of 25 cents per pound additional on fabrics having threads or yarns containing more than 30 turns of twist to the inch is both unnecessary and impracticable. The American throwing .industry is very efficient in the production of hard twist yarns, and the fabrics made therefrom are manufactured here on a large scale and need no extra protection. It is very difficult, moreover, to ascertain whether a foreign fabric has threads of 30 turns of twist to the inch. Its ascertainment is highly technical, scientific, and tedious, and the dividing line would be a matter of serious contention at all times. The proposed American valuation should not be adopted, because in very few cases are foreign silks strictly comparable in construction, material, and kind to domestic silks; because the basis of appraisal on the American valuation would be subject to great guesswork and would vary in different parts in accordance with the views of the individual" appraisers; because of the difficulty of arriving at accu- rate cost figures on American fabrics as illustrated by the Silk Asso- ciation costs shown above under "Costs and selling prices"; and because such a basis of valuation would exclude to a very great extent importation of silk goods from France, a country to which the American silk industry is indebted for creation of new ideas and new styles. (See figures under " Costs and selling prices.") Remarks. The United States formerly imported from France goods woven in Japan, but dyed and finished in France. In the last lew years this country excelled splendidly in the field of dyeing and finishing Japanese goods, so that now they are brought in directly from Japan and dyed and finished here. These goods form, indeed, the basis of subsequent manufacture. Undervaluation, in the opinion of the witness, very rarely occurs. Full records are kept at appraisers' stores of every importation, and those from Japan are appraised on the basis of regular price data secured by American consuls in that country. Hearings : Pages 3814-3819. Witness : Mr. Alfred Kohlberg, an importer. Rates suggested. Practically all pongees come within the brackets of the Fordney bill covering ungummed fabrics in the gray weighing from 1^ to 2| ounces and from 2J to 8 ounces at $2.75 and $3 per pound, respectively. That these proposed duties on pongees coming from China mean tremendous and varying increase over the straight 45 per cent ad valorem rate at present in effect will be seen from the following table, covering the main grades of this type of goods imported from that country: Chinese silk pongees (Tussah) Duty per piece. Under- wood. Fordney. Increase. Per cent of increase. A. 32/34 ounce, 17/18 yard Shantung $1.35 7.80 $6.20 18.00 $4.85 10.20 359 131 3 15 7 30 4 15 131 D 120/130 ounce 28/30 yard Ninghai 7.50 23.25 15.75 210 The witness imported in 1920 from China 496,368 pounds of pongee, valued at $1,288,373, and paid a duty of $579.767. or 45 per 414 DIGEST OF TARIFF HEARINGS, H. R. 7456. cent. Under the Fordney tariff of $3 per pound he would have paid a duty of $1,489,104, an increase of 157 per cent. On Japanese pongees the increases, as will be noted from the fol- lowing figures, are not nearly so great. Japanese silk pongees (Tussah) Duty per piece. Under- wood. Fordney. Increase. Percent of increase. E. 12 momme, 33-inch, F. 14 momme, 33-inch, G. 16 momme, 33-inch, 50-yard pieces $8.70 10.50 13.30 $13.20 15.40 17.60 $4.50 4.90 4.30 51 46 32 50-yard pieces 50-yard pieces Chinese pongees are made on hand looms, are rough in appear- ance, and contain, as imported, a great deal of gum and consider- able amounts of starch. The last-mentioned characteristics add, of course, to their weight and make the application of a specific duty to them unfair, unless the actual boil-off weight be used. The best solution is to leave the duty as at present, 45 per cent ad valorem on foreign valuation. In case American valuation is adopted, 22.9 per cent is suggested as the proper rate. This suggestion is based upon the fact that the witness's sales of Chinese and Japanese fabrics in the first 11 months of 1921 amounted to $391,927, while the duty paid by him on these goods amounted to $89,743, which works out at exactly 22.9 per cent of the sales value. In case specific duties are maintained, a special rate on tussah of $1.50 per pound, instead of $3 per pound, which is a prohibitive rate. is suggested. Even this duty would mean a considerable advance over the present duty. Calculated on the witness's last year's sales the increase would be from 45 per cent to 58 per cent on foreign value an increase which would not be prohibitive. Hearings: Pages 3854-3857. Witness : Mr. Armin C. Stapf er, representing the Silk Association of America. Costs and selling prices. In the United States a weaver operates from three to four looms while in Japan he operates only one loom, and under primitive conditions. Differences in wages are therefore greatly offset by differences in efficiency. For instance, on habutai a weaver in Japan would produce, working on one loom, between 6 and 8 yards a day, while in this country a weaver, working on three or four looms, produces at the rate of 12 to 15 yards per loom per day. Even with modern looms and the experience and oppor- tunities gained during the war, the Japanese made no impression on the American market. The truth is, they have not reached, even with the modern looms they use in the cotton industry, the American state of perfection in manufacture. A Japanese factory is neither so efficient nor so well organized as an American. A proof of this inferiority in production is found in the fact that, despite their cheap labor, the Japanese have not been able successfully to make crepe georgettes and crepe de chine for this market, although in making these fabrics the ratio of labor costs to total costs is greater than in the case of habutai. DIGEST OF TARIFF HEARINGS, H. R. 7456. 415 Comparability. Japanese imports consist chiefly of habutai. This is a unique fabric, not made in this country. It is made from inferior silk which could not "be used upon American looms. The Japanese have made some attempts to export to this country crepe de chine and crepe georgette but these were rather disastrous. They did send some shirtings during the war, but this was due to the short- age in the domestic supply and has long since stopped. Rates suggested. It is now, as it has been in the past, imprac- ticable to have specific rates. Market prices fluctuate very greatly and specific rates properly adjusted to-day may be out of proportion to-morrow. Hearings : Pages 3767-3770. Witness : Mr. H. E. Miles, chairman of the Fair Tariff League. Costs and selling prices. One-half of the cost of making silk is the raw material. To-day the tariff on silk is 45 per cent, or 90 per cent on all the other cost items, including the profit of the for- eigner, his overhead, and his wages. Comparability. There is to-day a virtual embargo on the importa- tion of silks for general use in the United States. There is none com- ing in competition against the production of the United States except the cheap habutai from Japan and the pongees from China, two things which, apparently, American manufacturers do not want to make. Rates suggested. Thirty per cent on foreign valuation. PARAGRAPH 1206. VELVETS, PLUSHES, AND OTHER PILE FABRICS. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIOHER DUTIES : Mr. Frederick F. Kip, representing Salts Textile Manufacturing Co. and other pile-fabric manufacturers, Bridgeport, Conn. FAVORING LOWER DUTIES : Mr. Samuel Kridel, representing J. Kridel, Sons & Co., and other manufac- turers and importers of silk. (Also requesting reel assificat ion. ) Hearings : Pages 3803-3813. Witness : Mr. F. F. Kip, representing Salts Textile Manufacturing Co. and others. Costs and selling prices. Wages in the mills of the witness were reduced twice in 1921, the total reduction amounting to about 22 per cent. Even now they average, however, from 75 to 90 per cent more than in 1914. Size of industry. The Salts Textile Manufacturing Co. employs from 3,500 to 4,000 workers. Until the last reduction in wages men- tioned it was running its mills only three days a week. At present it is producing for stock in anticipation of a future market. ' Rates suggested. The ad valorem minimum provision of the House bill should be increased from 33^ to 4H per cent on American valua- tion. In passing upon this request it should be considered that silk- pile fabrics are luxuries. All previous tariffs, including that of 1913, have accorded to vel- vets, plushes, and other pile fabrics a higher rate of duty than silk fabrics woven in the piece. (Par. 1205.) This is necessary because 416 DIGEST OF TARIFF HEARINGS, H. R. 7450. the principal material of pile-fabric manufacture, spun silk (par. 1202), has always been dutiable at from 30 to 35 per cent. Suggested reclassification. Hatters' plush, covered in the House bill by paragraph 1453, should be included in this paragraph by in- serting in line 13, page 133, after " plushes," the words " including such as are commercially known as hatters' plush." For a discussion of the reasons for this suggestion, see Mr. Kip's testimony on para- graph 1453. Hearings: Pages 3826-3851. Witness : Mr. Samuel Kridel, representing J. Kridel, Sons & Co. Costs and selling prices. On a brocaded velvet imported by Menke, Kaufman & Co. foreign cost was $3.01 ; landed cost, $3.28 ; duty under present law, $1.50; domestic selling price, $5.46, upon which the House bill rate of 33 per cent would amount to 60 per cent on foreign value. Rates suggested. Objection was raised to the specific rates on velvet and plush ribbons as provided in paragraph 1206, page 134, line 15 to the end of the paragraph. It was urged that because of the way they are packed it is impossible to obtain their weight with- out destroying in some measure the appearance of the goods and, furthermore, that because of variations in weight due to deviations in cutting the pile the weight of the sample chosen by the examiner might not be indicative of the average weight of the whole shipment. PARAGRAPH 1206. HATTERS' PLTJSH. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES ; ALSO RECLASSIFICATION. Mr. Horace R. Cheney, representing the Silk Association of America, New York City. Mr. Frederick F. Kip, representing Salts Textile Manufacturing Co., New York City. Hearings : Page 3785. Witness : Mr. Horace B. Cheney. Rates suggested. This paragraph should be eliminated and hat- ters' plush thus be made dutiable, like other plushes, under para- graph 1206. The material is supposed to cover plush used exclusively in making men's silk hats, yet imports have increased with a de- creased use of such hats. Hearings: Pages 3803-3813. Witness: Mr. Frederick F. Kip, representing pile fabric manu- facturers. Rates suggested. The witness suggests that this paragraph be eliminated and that hatters' plush, like other plushes, be subject to the duties that may be provided in paragraph 1206. To this end it is urged that, in paragraph 1206, after the word "plushes," there be inserted the words "including such as are commercially known as hatters' plush." Under the present and preceding laws, which provide separately for hatters' plush such as is used in making men's hats, there has been a great deal of trouble at the customhouse and some litigation. Years ago this provision cost the Government $20,000,000 in refunds of duty. The language of the House bill, following the recommenda- DIGEST OF TARIFF HEARINGS, H. R. 7456. 417 tion made on page 580 of "Summary of Tariff Information" (pre- pared in 1920 for the Committee on^Ways and Means), which con- fined the operation of this paragraph to hatters' plush of qualities and width generally used in the making of men's silk hats., is a great improvement. It leads to the paradoxical result, however, that plush of the grade used for making men's silk hats of 22 or 26 inches, the widths ordinarily used for men's silk hats, will come in at the low rate of 10 per cent ad valorem, while plush of the same quality imported in any other width would come in at 33^ per cent a duty that should be increased to 4LJ per cent. This inequity the wit- ness protested against. It did not matter a great deal when the qualities of plush used in making men's hats were rarely used for other purposes and when the increase has been for use in making women's hats. But right at present the matter is of urgent im- portance, for it is this type of plush that is now in vogue and which, according to the estimate of the witness, now constitutes 60 per cent of the European production of velvets and plushes. In 1922 the American demand therefor will be extensive, and, in the opinion of the witness, if the 10 per cent duty remains there will be danger of the throwing out of employment of a large proportion of domestic employees making this class of goods. Furthermore, if the operation of the paragraph could be restricted to plush used in making men's sjlk hats it would be placing a much lower duty on the material used for this extreme luxury than on that used for making hats used by women of moderate means. If a separate paragraph be retained for hatters' plush, it should be placed in schedule 12 instead of in schedule 14. This was also recommended in the "Summary of Tariff Information," referred to above. PARAGRAPH 1207. SILK RIBBOXS AND SMALL WARES. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Frederick F. Kip, representing Salts Textile Manufacturing Co., Bridge- port, Conn. Hearings: Pages 3803-3813. Rates suggested. The House bill rate of 33 per cent ad valorem should be increased to 40 per cent ad valorem on American valuation. PARAGRAPH 1208. KNIT GOODS. WITNESSES. AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Frederick F. Kip, representing the Salts Textile Manufacturing Co., Bridgeport. Conn. Mr Sidney Worms, representing the Franklin Knitting Mills, 519 East Seventy-second Street, New York City, and the National Knitted Outer- wear Association. Hearings : Pages 3803-3813. Witness : Mr. F. F. Kip, representing the Salts Textile Manufac- turing Co. 418 DIGEST OF TARIFF HEARINGS, H. R. 7456. Rates suggested. On knit fabrics, page 135, line 12, the rate should be increased from 35 to 41^ per cent ad valorem on American valua- tion; on knit hosiery and underwear, page 135, line 14, from 40 to 46 per cent ad valorem on American valuation ; on knit outerwear, page 135, line IT, from 40 per cent to 46| per cent ad valorem on American valuation. Hearings : Pages 3857-3861. Witness: Mr. Sidney Worms, representing the Franklin Knitting Mills and the National Knitted Outerwear Association. Costs and selling prices. In Austria, Germany, and Czechoslo- vakia conversion costs on knitted outerwear are about one-fifth of the American. This estimate is based upon the foreign wage figures contained in the National Industrial Conference Board Research Re- port No. 40. These indicate that the average hourly textile wage in Germany is less than 7 marks, or at present exchange rates about 4 cents, while the average in the United States is 50 cents per hour. Total costs are estimated (see table on p. 3663) to be $9.62 in Germany and about $20.45 here. Domestic prices doubled up to March, 1920, and have declined about one-third since then. Size of industry. The domestic silk knitted outerwear industry has grown from nothing in about 1908 until to-day it employs about 10,000 workers, with a product valued at about $40,000,000 annually. Importations have never been shown separately, but foreign com- petition exists and has been increasing as exchanges have gone down. The increase has come chiefly from Czechoslovakia, Germany, and Austria. The domestic industry tried to build up an export trade with South America, but with the extreme break in prices it came to a disastrous end. Rates suggested. The rate on silk knitted outerwear, page 135, line 17 of the House bill, should be increased from 40 to 50 per cent ad valorem on American valuation. At the hearings before the Ways and Means Committee two things were requested: (1) A separate classification for knitted outerwear, and (2) a protective rate necessarily higher than the rate given to hosiery, underwear, etc. The higher rate is required because knitted outerwear are articles of fashion in the manufacture of which over- head costs, due to the necessity of carrying large stocks and many colors, are high; because of greater selling expenses; because of the advantage of the foreigner in having low overhead, etc. ; and be- cause silk knit outerwear is a luxury. It was obviously an inadvert- ence that a higher rate was not granted by the House, for without such a difference there would be no object in providing a separate classification for silk outerwear, knit or crocheted. In the case of woolen knitted outerwear, paragraph 1115, a duty higher than that on underwear was given. Further recommendations: In paragraph 1208, page 135, line 5, after the word "and," insert the word "all"; strike out the word " goods " and insert the word " articles " ; after the word " crocheted,'' insert the words " wholly or in part." DIGEST OF TAKIFF HEARINGS, H. R. 7456. 419 PARAGRAPH 1209. SILK HANDKERCHIEFS AND MUFFLERS. WITNESS, AND INTEREST REPRESENTED. FAVOBING PROPOSED OB HIGHER DUTIES : Mr. Frederick F. Kip, representing the Salts Textile Manufacturing Co., Bridgeport, Conn. Hearings : Pages 3803-3813. Rates suggested. The duty on woven silk handkerchiefs and muf- flers not hemmed, House bill, page 135, line 20, should be increased from 33^ to 40 per cent ad valorem on American valuation, and on those hemmed or hemstitched, from 40 to 46| per cent ad valorem on American valuation. PARAGRAPH 1210. SILK AND ARTIFICIAL SILK SHIRT COLLARS. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OB HIGHER DUTIES : Mr. F. F. Kip, representing the Salts Textile Manufacturing Co., Bridge- port, Conn. Hearings : Pages 3803-3813. Rates suggested. The ad valorem duty on silk shirt collars, House bill, page 135, line 23, should be increased from 20 to 25 per cent on American valuation. PARAGRAPH 1211. SILK SHIRTS AND ARTIFICIAL SILK SHIRTS AND SHIRT COLLARS FOR MEN AND BOYS. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. F. F. Kip, representing the Salts Textile Manufacturing Co., Bridge- port, Conn. Hearings : Pages 3803-3813. Rates suggested. The duty, House bill, page 136, line 2, should be increased from 40 to 46J per cent ad valorem on American valua- tion. PARAGRAPH 1212. WEARING APPAREL' NOT KNIT OR CROCHETED. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Frederick F. Kip, representing the Salts Textile Manufacturing Co., Bridgeport, Conn. Hearings : Pages 3803-3813. Rates suggested. The duty, House bill, page 136, line 8, should be increased from 40 to 96 per cent ad valorem on American valua- tion. 420 DIGEST OF TARIFF HEARINGS, H. R. 7456. PARAGRAPH 1213. MANUFACTURES or SILK, x. s. P. r. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. F. F. Kip, representing the Salts Textile Manufacturing Co., Bridge- port, Conn. Hearings : Pages 3803-3813. Rates suggested. The duty, House bill, page 136, line 13, should be increased from 35 per cent to 41 per cent ad valorem on American valuation. PARAGRAPH 1215. ARTIFICIAL SILK, AXD MANUFACTURES OF. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OB HIGHER DUTIES: Mr. Frederick F. Kip, representing Salts Textile Manufacturing Co., Bridgeport, Conn. Mr. Fred Mayer, representing Knitted Outerwear Association. Mr. Albert L. Waitzfelder, representing Braid Manufacturers' Association, 328 Fourth Avenue, New York City. Mr. Roland L. Taylor, representing Munford, Hunton, Wilhang, and Ander- son, and the Tubize Artificial Silk Co. of America, Philadelphia, Pa. FAVORING LOWER DUTIES : Albert Eckstein & Co. (Brief.) Hearings : Pages 3803-3813. Witness : Mr. F. F. Kip, representing Salts Textile Manufacturing Co. Rates suggested. The ad valorem minimum provision of 23 per cent on American valuation upon artificial silk yarn, House bill, page 137, line 7, should be increased to 28 per cent ; the ad valorem duty upon artificial silk manufactures, House bill, page 137, line 10, should be increased from 37^ to 41^ per cent on American valuation. Hearings : Pages 3861-3863. Witness : Mr. Fred Mayer, representing Knitted Outerwear Asso- ciation. Costs and selling prices. In making knitted artificial silk sweat- ers and other outerwear, German conversion costs are about one-fifth American. (See p. 3659 for statement as to conversion costs and placing total domestic cost at $7.45 per pound as compared with $2.97 in Germany.) % Rates suggested. The compensatory duty of 45 cents per pound upon manufactures of artificial silk. House bill, page 137, line 9, should be increased from 45 to 70 cents per pound; the protective ad valorem duty of 37|- per cent thereon, House bill, page 137, line 10, from 37| to 60 per cent, on American valuation. The reason for the requested increase in the compensatory duty is that, assessed upon American valuation of 23 per cent, the duty upon artificial silk yarn amounts, at the present price of $2.75 per pound, to 68 cents per pound, and 10 per cent waste in production would in- crease the necessary compensatory duty to 70 cents per pound. Hearings: Page 3654. Witness: Mr. A. L. Waitzfelder, representing Braid Manufac- turers' Association. Rates suggested. The compensatory duty upon manufactures of artificial silk, House bill, page 137, line 9, should be increased from DIGEST OF TARIFF HEARINGS, H. R. 7456. 421 45 to 70 cents per pound, because at present prices the 23 per cent American valuation upon artificial silk yarn amounts to 63 cents per pound, which, allowing for waste in manufacture, amounts for full compensation to 70 cents per pound. Hearings : Pages 3863-3869. Witness : Mr. R. L. Taylor, representing interests as above. Costs and selling prices. See Ways and Means Committee Hear- ing for tables presented by the witness showing actual labor costs in Switzerland, Belgium, France, and Hungary. The costs of raw material for making artificial silk yarns are about 10 per cent lower in Europe than here. Size of industry. The present artificial silk yarn producing ca- pacity of the United States is probably 16,500,000 to 17,000,000 pounds. The Tubize Artificial Silk Co. of America, represented by the witness, started manufacture a short time ago at Hopewell, Va. ; it has so far attained a production of about 60 per cent of the amount desired. It now employs 2,000 workers and turns out about 6,000 pounds of yarn per day. Imports increased for 1,667,000 pounds for the first 10 months of 1920 to 3,475,000 pounds for the first 10 months of 1921. Comparability. American A quality yarn is probably the best made in the world. Imported B and C quality yarns are no better than American yarn of the same quality. Rates suggested. The specific rate on single artificial silk yarns, required to cover the present differences in cost of manufacture here and in Europe, should be 85 cents per pound; on ply yarns 5 cents per pound more. The ad valorem catchall should be 38 per cent on American valuation or 55 per cent on foreign valuation. France, one of the largest artificial silk producing countries and one of the largest sources of American imports, has a duty of 22.5 francs per kilo upon artificial yarn, a duty equivalent, at present ex- change rates, to about 80 cents, while the American duty on the same basis is only 30 to 40 cents. Witness: Albert Eckstein & Co. (Brief; no appearance at hear- ings.) Rates suggested. In lieu of the same rates as on yarn made from artificial silk or artificial horsehair, as provided in H. R. 7456, a separate bracket should be inserted to cover yarns made wholly or in chief value of artificial silk waste or sliver carrying a duty of 35 cents per pound for singles and 40 cents per pound for ply yarns. In support of this request, it is stated that while artificial silk yarn of 150 denier size sells for $2.75 per pound upon the American market, the corresponding size made from silk waste or sliver sells for only $1.75 per pound. Paragraph 1215 as amended by Albert Eckstein & Co. follows: Yarns, threads, filaments, and lame, of artificial or imitation silk, or of artificial or imitation horsehair, by whatever name known and by whatever process made, if singles, 45 cents per pound; if tram, 50 cents per pound; if yarns made wholly or of chief value of artificial silk waste or sliver ; if singles 35 cents per pound ; if two or more ply, 40 cents per pound : Provided, That none of the foregoing shall pay a less rate of duty than 23 per centum ad valorem. Knit goods, ribbons, and other fabrics and articles composed wholly or in chief value of any of the foregoing, 45 cents per pound, and in addition thereto 37$ per centum ad valorem. 7713422 28 422 DIGEST OF TARIFF HEARINGS, H. R. 7456. SCHEDULE 13. PAPERS AND BOOKS. PARAGRAPH 1301. PRINTING PAPER, NOT SPECIFICALLY PROVIDED FOR. WITNESS, AND INTEREST REPRESENTED. FAVOBING PBOPOSED OB HIGHER DUTIES : Mr. Gillett Collins, representing the Book Paper Manufacturing Association, Philadelphia, Pa. Hearings : Pages 3887-3888. Costs and selling prices. The average price of book paper is $150 per ton. The witness has a quotation from Belgium 50 per cent below American cost price. It costs no more to get a shipment from London or Belgium than it does to ship from Philadelphia to New York. Size of industry. Statisticians of paper industries state that there is enough book-paper capacity in the country to supply all needs until 1928. As the increase in consumption is about 8 per cent per year, the industry will need all the trade it can get in this country. Comparability. Printing or book paper is imported from Scandi- navia, Germany, and a little from England. Germany has a large capacity for producing book paper. Rates suggested. One-half cent per pound and 10 per cent ad valorem. The witness emphasizes the necessity for some protection besides the duty that can be put on, because nothing that can be named would offset the exchange. PARAGRAPH 1302. WALL BOARD. WITNESSES. AND INTEBESTS BEPRESENTED. FAVOBING PROPOSED OB HIGHER DUTIES : Mr. W. F. MacGlashan, representing The Beaver Board Co., Buffalo, N. T. FAVORING LOWER DUTIES : Mr. W. G. Saville, representing the Plaster & Wall Board Co., Buffalo, N. Y. Hearings : Pages 3892-3897. Witness: Mr. W. F. MacGlashan, representing the Beaver Board Co. Costs and selling prices. The prewar price of beaver board, $24 per 1,000 square feet, has risen to $28. Size of industry. The production of wall board last year, 1920, amounted to a little over 1,000,000,000 square feet. Rates suggested. Beaver board to be placed on the free list, under building materials, in the same class with lumber and laths. The reasons for asking this are, first, that, although practically all of this material is produced by American manufacturers, the raw material in the form of fiber is imported from Canada. Second, the need of conserving American pulp-producing forests, which are rap- idly becoming exhausted. The total price paid for labor in Canada for putting the raw material into rolls does not exceed $5 per ton. The third reason is that the free importation of this raw material, or semifinished raw material, for the manufacture of wall board will DIGEST OF TARIFF HEARINGS, H. R. 7456. 423 not injure any American industry. On the other hand, the placing of a duty on wood pulp in rolls for use in the manufacture of wall board will increase the price of wall board to the American public. Hearings : Pages 3968-3971. Witness: Mr. W. G. Saville, representing the Plaster & Wall Board Co. Size of industry. Wood fiber wall board was first manufactured in America 15 years ago. The output has increased rapidly to a present total of about 430,000,000 square feet annually. Comparability. There is no danger of importation of pulp board from Germany, Scandinavia, and other low-exchange countries, none of their mills being equipped to manufacture in the required thick- ness. Then, too, ocean transportation is impracticable for rolls of the prevailing dimensions. Rates suggested. Pulp board used exclusively in the manufacture of wall board to be admitted free of duty. A brief supplementing the oral testimony contains suggestions for amendments of para- graph 1302. No American manufacturers of wall paper, owning their own wood-pulp mills and using American timber, require pro- tection, as they are now underselling manufacturers who import the raw material from Canada. Kern-arks. Wall board is used chiefly as a substitute for laths and plaster in building the cheaper homes in agricultural and mining sections. It is particularly a poor man's material. PARAGRAPH 1302. PAPER AND PULPBOARD. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : The John S'trange Paper Co., Menasha, Wis. (Brief, no appearance at hearings. ) The brief refers to the writer's predictions that free pulp and paper would result in higher cost of paper to consumers, and desires protec- tion for these products. Rates suggested. One cent per pound, or 25 per cent ad valorem. PARAGRAPH 1304. TISSUE PAPER. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. N. H. Bussey, jr., representing tissue-paper manufacturers. Hearings: Pages 3900-3901. Rate suggested. The wording of paragraph 1304 to be changed, as under the present wording various grades of paper might be brought in under other paragraphs at a lower rate of duty. Also, the division of weights should be carried farther so as to include the heavier India and Bible papers, but at a lower rate of duty, by inserting the words "If weighing over 12-| pounds and less than 18 pounds, to the ream, 4 cents per pound and 15 per centum ad valorem." Under paragraph 1304 the rate would be either 6 or 5 cents per pound and 15 per cent ad valorem. 424 DIGEST OF TARIFF HEARINGS, H. R. 7456. PARAGRAPH 1305. PAPERS WITH COATED SURFACE. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Louis T. Stevenson, representing glassine and grease-proof paper manu- facturers. Hearings: Page 3902. Rates suggested. The manufacturers desire the rates given in the House bill, which they think are fair ; information in their support is given in a brief, included in the American Paper and Pulp Asso- ciation's brief. PARAGRAPH 1305. GLAZED AND FANCY PAPERS. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. I. O. VanDuzer, representing glazed and fancy paper manufacturers. Hearings: Pages 3902-3903. Costs and selling price. The ordinary value of paper in 1912 was $1.05 per ream ; the same papers are quoted to-day, from abroad, at $3 per ream, or about three times the 1912 price. Rates suggested. Owing to this increase in value, it is necessary to have a rate of 9 cents per pound to equalize conditions. The pres- ent rates of 5 cents a pound, and 5 cents and 20 per cent ad valorem, were based on the earlier value. With a tariff permitting it, manu- facture is carried on ; otherwise, paper is imported. Under the 1913 act, carrying a duty of 20 per cent ad valorem, large quantities were imported. The 40 per cent duty of the Under- wood bill did not protect the industry. PARAGRAPH 1305. VEGETABLE PARCHMENT. WITNESS, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. J. M. Dohan, representing vegetable-parchment manufacturers. Hearings : Pages 3903-3906. Costs and selling prices. The witness formerly made " waterleaf " at 5 cents per pound and sold the paper anywhere from 8 to 9 and 10| cents. Now, " waterleaf " is made at a cost of 9.5 cents and sold at 17 cents. Size of industry. The American industry is in a precarious con- dition, as shown by the fact that out of 27 establishments only 5 survive today. Home competition and fear of foreign competition make it necessary to keep prices low enough to keep out the foreign product. Comparability. Germany is in a position to sell goods in this country at any time. The threat of foreign competition reduced the price of paper from 27 cents in 1885 to 7.8 cents in 1914. Rates suggested. An addition of 2 cents to the specific rate in the bill. In paragraph 1304, filtering and copying paper are set down at 4 cents a pound, and in paragraph 1309, at 6 and 5 cents a pound respectively. These rates are "nearly analogous" to the paper DIGEST OF TARIFF HEARINGS,, H. R. 7456. 425 manufactured by the witness. The rate on certain papers should be 5 cents a pound and 15 per cent ad valorem. There is a fundamental difference between the imitation parch- ment and the genuine parchment manufactured by the witness. One is a single process and the other a double process. PARAGRAPH 1305. PAPER BAGS. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR LOWER DUTIES : Mr. Samuel Kraut, representing the Adolph Kraut Company, New York. Thomas M. Royal & Co., Bryn Mawr, Pa. (Brief.) The Continental Paper and Bag Mills, New York City, N. Y. (Brief.) Hearings : Pages 3906-3910. Witness: Mr. Samuel Kraut. Costs and selling prices. The American manufacturer is charging $6.30 for white bags, $7.80 for colored, other than red, and $8.60 for red. These prices represent an increase of 200 to nearly 300 per cent over pre-war, and are grossly disproportionate to the increase in the price of paper and cost of labor. The difference in cost between white and red is 8 cents per pound, or 64 cents more per thousand red bags than for the white bags. The manufacturer charges the customer $2.50 more for the red bags, representing a profit, based on difference of color, of $1.66 on an investment of 64 cents over 250 per cent. These high prices are due mainly to the Paper Bag Trust fixing the wholesale rate. Rates suggested. A duty of 3 cents a pound. Under the bill, the duty on 1,000 white bags would be $2.43 ; on colored bags, $2.70^ ; anof on red bags $2.86. Various changes in paragraph 1305 are sug- gested; see page 3910. Remarks. Price list of bags of various firms will be found on pages 3907-3908. Witness: Thomas M. Eoyal & Co., Bryn Mawr, Pa. (Brief; no appearance at hearings.) The firm is unaware of any bags ever having been imported into this country other than duplex bags made of two thicknesses of paper. Consequently, a proposal of which the firm has been in- formed, to insert the word " unlined " before " bags," would abso- lutely defeat the object of the paragraph. An attempt has also been made to have paper bags brought in under manufactures of papers, n. s. p. f.," at 26 per cent ad valorem. Either of these changes would compel the firm to seek a new line of business, after originating this type of bag in this country more than 20 years ago. Large quantities of imported duplex bags are now being offered in New York at prices considerably less than the firm's cost of manufacture. In a later communication the firm again refers to the efforts then being made to have duplex paper bags put on a lower tariff basis than that in H. R. 7456, and repeats the assertion that no unlined bags have ever been imported into this country. The effect of a successful issue to these efforts, throwing duplex or lined bags into the class of " manufactured paper goods," would be to prevent the firm, employing 300 persons, from competing with Germany. 426 DIGEST OF TARIFF HEARINGS, H. R. 7456. Witness : The Continental Paper and Bag Mills, New York City. (Brief; no appearance at hearings.) The company takes the view that a serious and apparently inad- vertent omission in H. R. 7456 leaves the paper bag industry en- tirely without protection. Paragraph 1305 refers entirely to bags made from highest class papers, leaving ordinary plain paper bags unprotected. These are made from so-called bag paper, akin to wrapping paper, and have been protected in previous tariff acts. There should be equal pro- tection for these bags, plus an adequate allowance for the important conversion process to which the paper has to be subjected. The product of this industry is about $50,000,000 and nearly 10,000 persons are employed. PARAGRAPH 1305. WRAPPING PAPER. WITNESSES, AND INTERESTS BEPKESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Abram H. Cohen, representing the Republic Bag & Paper Co. The Safepack Mills, Boston, Mass. (Brief.) Hearings : Pages 3943-3945. Witness : Mr. Abram H. Cohen. Casts and selling prices. The current price of Kraft wrapping paper is $150 a ton. The cost of labor per ton of paper is from $15 to $30, according to the thickness and weight of the paper, the speed of the machine, the condition and age of the paper machine, etc. Labor, therefore, receives from 10 to 15 per cent of the cost of the finished paper, and should be protected to that extent. Size of industry. In 1922 domestic paper mills manufactured approximately 1,200 tons of Kraft paper per day. The total im- portations of wrapping paper in September, 1920, were 387 tons; in September, 1921, 402 tons; in October, 1920, 185 tons; and in October, 1921, 500 tons, or about 1 per cent of the total amount of wrapping paper manufactured in this country. The exports from the United States were, in October, 1921, 1,717 tons; in October, 1920, 2,188 tons; in September, 1921, 837 tons; and in September, 1920, 2,140 tons. These figures make the imports of September and October, 1920, equal to 13 per cent of the exports of the same grade of wrapping paper ; and the imports of September and October, 1921, about 60 per cent of the American manufactures of wrapping paper. To-day there are over 35 mills with a production of about 1,500 tons a day, protected by a duty of 25 per cent ad valorem. Comparability. Imports of wrapping paper come from Canada, Scandinavia, Germany, Czechoslovakia, Austria, and Jugoslavia. The witness stated that he represented several mills in Scandinavia, Czechoslovakia, and Germany. The company exports to Cuba, Cen- tral and South America, Australia, and to a small extent, to Africa. Rates suggested. The present rate of duty is more than ample for protection. The duty of 23 to 25 per cent should be the maximum, because wrapping paper making is mostly a mechanical process. The American mills that are now asking for increased protection, for fear of European mills, advanced their prices 10 per cent in Septem- ber, 10 per cent in October, and 10 per cent in November, 1921. DIGEST OF TARIFF HEARINGS, H. R. 7456. 427 Witness: The Safepack Mills, Boston. (Brief; no oppearance at hearings.) The brief takes exception to the wording of paragraph 1305, which, probably unintentionally, would include ordinary wrapping paper, having striped or parallel lines, as samples inclosed. It is pointed out that this is not " fancy " or " decorated " paper, but ordinary wrapping paper, costing no more than paper without the stripes. Consequently, the duty should be no hiirher than for the latter. It is suggested that the addition of the words " including paper with striped parallel lines produced in the pulp," would correct this obvious, though hidden, error. PARAGRAPH 1305. PHOTOGRAPHIC PAPER. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Nelson Curtis, representing himself (a practical paper maker). Mr. Thomas W. Stephens, representing the Ansco Co., New York City. Hearings: Pages 3911-3913. Witness: Mr. Nelson Curtis. Size of industry. There are about four individual companies in this country manufacturing photographic and raw paper. The Eastman Kodak Co. produced something like $2,000,000 or $2,500,- 000 worth of products in 1920. The investment of the Eastman Kodak Co. in raw paper amounts to between $4,000,000 and $5,000,000. Rates suggested. A protection of at least 30 per cent (5 per cent less than the McKinley rate) arranged so as to contain a specific and an ad valorem duty, as in the bill, should be maintained. Remarks. The witness stated that, after four years' experiment- ing, his company produced a satisfactory paper in 1895, and is now engaged in the making of raw photographic paper. One of the inducements to go into this line of business was the protection of 35 per cent ad valorem in the McKinley bill, 1890 a year before he began experimenting. A good business was done up to 1913. The tariff act of that year cut the rate to 15 per cent ad valorem, and underselling set in; then came the war, serving as a protective tariff, and now, again, foreign competition prevails. The witness submitted briefs prepared by the Eastman Kodak Co. and the American Photograph & Paper Co. Hearings : Pages 3915-3917. Witness : Mr. Thomas W. Stephens, representing the Ansco Co. Rates suggested. Plain basic paper (raw photographic paper), free; baryta-coated paper for sensitizing, free. (If a duty for reve- nue is considered necessary on these items, the witness requests that it be not more than 10 per cent ad valorem.) Sensitized paper, 30 per cent ad valorem an increase of 5 per cent over the proposed rate. Remarks. Mr. Stephens requests that plain basic paper and baryta-coated paper for sensitizing be placed on the free list be- cause they are the raw material for the manufacturer of sensitized paper, a regular and dependable supply of which is not available from domestic paper makers. He states that the Eastman Co. has a large mill for manufacturing this paper, but that the independent 428 DIGEST OF TARIFF HEARINGS, H. R. 7456. companies are dependent for their supplies on foreign sources. The placing of these items on the free list would not seriously affect domestic paper manufacturers, as there appears to be none manufac- turing a paper suitable for the finest quality of photographic prints, and the Eastman Co. would not need protection, as the foreign paper, under the present tariff, costs as much as, and at times more than, that made here. A duty on this paper would be favorable to the Eastman Co. alone, and detrimental to the smaller competing concerns who are dependent on the foreign supply. Sensitized paper should bear a higher duty than that proposed, as it is a finished article, while the plain basic paper and the baryta- coated paper are part of the raw material entering into it. Besides, the raw materials for making photographic emulsion are subject to substantial duties. Under the present tariff of 25 per cent, foreign manufacturers have been able to sell their product freely here when equal to the domestic. PARAGRAPH 1305. WET TRANSFER PAPER. WITNESS, AND INTEREST REPBESENTED. FAVORING PROPOSED OB HIGHER DUTIES : Mr. Philip Bock, representing, as international president the Amalga- mated Lithographers of America. Hearings : Pages 3932-3936. Kates suggested. The 30 per cent ad valorem rate is regarded as absolutely insignificant. At the present time great unemploy- ment exists in the lithographic industry, due to the importation of impressions from original art work upon transfer paper, from which numbers of impressions are printed in this country. This art work alone would cost something like $5,000 in the case of an original picture exhibited by the witness. Remarks. In a filed brief, the represented interest is described as a labor organization, with a membership of over 9,000 workmen, representing 60,000 persons engaged in, and dependent upon, a wholly domestic industry, the exports of lithography being negli- gible. Lithography, it is claimed, ranks among the fine arts, such as sculpture and painting. The brief disclaims any desire to pro- hibit entirely the importation of lithographic works of art; its purpose is to persuade Congress to enact a law enabling a highly skilled lithographic workman to earn commensurate wages and to admit of a reasonable profit from the labor invested in the business. PARAGRAPH 1305. DECALCOMANIA. WITNESS, AND INTEREST REPRESENTED. REQUESTING RECLASSIFICATION : The Croxall Chemical & Supply Co , East Liverpool, Ohio. ( Brief ; no ap- pearance at hearings.) As users of decalcomania transfer sheets in the pottery industry, the company shows, by samples, that for similar production the price DIGEST OF TARIFF HEARINGS, H. R. 7456. 429 of English sheets would be 44 cents as against 35 cents for domestic. Under present tariff rates, there is no competition between the two sheets. The proposed duty would impose an unjust burden on the American potter, who is now using a large quantity of the English high-class sheets, having drifted away from the cheap, gaudy sheets of German manufacture. Rates Suggested. The proposed duty should apply only to sheets costing less than 14 cents at port of entry. The present duty should be retained on the high-class English sheets. PARAGRAPH 1305. VULCANIZED FIBER. WITNESS, AND INTERKST KEPRESENTED. REQUESTING RECLASSIFICATION : The Diamond State Fibre Co., Bridgeport, Pa. (Brief; no appearance at hearings.) The company would have a separate classification for this mate- rial, other than manufacturers of paper n. s. p. f. at 26 per cent ad valorem. This material is manufactured by a chemical process for paper and passes through an acid bath on a drum, yielding a homogeneous laminated mass in sheets of various thicknesses. A duty of 26 per cent is not sufficient to shut out imports from Ger- many and Japan; there should be a specific duty on vulcanized fiber of not less than 8 or 10 cents per pound. PARAGRAPH 1305. GUMMED PAPERS AND DECALCOMANIA PAPER NOT PRINTED. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Gummed paper manufacturers. (Brief; no appearance at hearings.) The interested manufacurers had already pointed out, in a brief submitted to the Ways and Means Committee, that the Underwood tariff duty of 35 per cent on gummed papers was not sufficient to give adequate protection to American manufacturers. The war, by preventing the importation otherwise possible, saved the Ameri- can industry from disaster. Rates suggested. In asking for a specific duty of 6 cents per pound and 30 per cent ad valorem, the manufacturers make no de- mand for a prohibitive tariff, but merely the necessary counterbalance to low foreign cost of production. The following comparative table of weekly wages in the industry is cited in support of this view : England. Germany. United States. $17.50 $3.50 $37.00 14.00 3.50 34.00 15.15 3.50 31.50 430 DIGEST OF TAKIFF HEARINGS, H. R. 7456. Other tables show the actual results derivable from a 5-cents-per- pound specific rate, without an additional ad valorem rate, as in H. K. 7456. This works out, in the case of decalcomania paper, to even greater disadvantage to the American manufacturer than in the case of gummed paper. PARAGRAPH 1306. LITHOGRAPHIC PICTURES, BOOKS, Box COVERS, SOUVENIRS, ETC. WITNESS, AND INTEBEST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Maurice Saunders, representing the Lithographic Employers' Associa- tion, New York City. Hearings : Pages 3917-3929. Costs and selling prices. The actual cost in America of lithograph- ing, the work of putting the various colors on stone, as taken from the association's records, is from $300 to $400. The transferring of 1,504 square inches of labels, taken as a sheet ready to print, is from $30 to $35. The cost of printing, on an edition of 6,000 to 12,000 sheets, is $8.50 per 1,000 sheets. The embossing of these labels costs 50 cents per 1,000. The metal disks used to raise the gold and other portions of the disks cost from $15 to $20 for the simpler plates; the more intricate cost even more. The cutting of cigar bands costs 8 cents per 1,000. The witness cited a German quotation on 25,000 sets of "in and out" labels at $11 per 1,000. The identical labels, without profit, would cost $29.04 per 1,000 in America. Other quotations include one at $9 that would cost the witness's firm $20.30, and another at $8 that would cost $15.88. Differences in labor and material costs make such quotations pos- sible. Size of industry. There are about 50,000 people engaged in the lithographic industry in America. The work is of a high type and pays a high wage accordingly. Comparability. The witness regards the situation in Germany as being possibly temporary, but his firm is perfectly willing to take a chance on the future. Large additional quantities of German goods are being sold in this country and that competition will have to be met. Rates suggested. Double the rates of the Payne-Aldrich bill in- stead of the Payne-Aldrich rates carried in H. R. 7456. Even this doubled rate will not equalize the difference in labor charge alone. The present average wage for skilled lithographers in the United States is $43.50 per week, while at the present rate of exchange it is $3 per week in Germany. Various amendments in paragraph 1306 are suggested. Remarks. The Underwood Act 'reduced the rate in one bracket from 8J cents to 5 cents per pound, and importations increased from 245,000 pounds in 1913 to 1,331,000 pounds in 1914 and 1,740,000 pounds in 1915. That is to say, the reduction from 8 to 5 cents stimulated the importation in the first two years of the war from 245,- 000 pounds to 1,740,000 pounds. DIGEST OF TARIFF HEARINGS, H. R. 7456. 431 PARAGRAPH 1306. CIGAR LABELS, BANDS, ETC. WITNESS. FAVORING LOWER DUTIES : Steffens, Jones & Co., New York City. (Brief.) Hearings : Pages 3929-3932. Comparability. The brief includes the following comparative data on cost of production : Sketches : Original sketch, American, $20 ; German, $23. Lithographing : Putting on stone, American, $85 ; German, $95 to $100. Transferring 1,504 square inches labels: American, $4.25; German, $2.73. Printing 1,000 sheets (2,604 square inches), American $1.27i; Ger- man, $1.23f . Embossing labels: 1000 labels. American, 12 cents; German, 66f cents; original embossing plate, American, $8.50; German, $18. Embossing bands : One-half sheet, 32| by 48 inches, containing 846 bands, equivalent to 423 bands embossed at once in America; 40 bands only can be embossed at once in Germany against 423 in America. Cutting: Cutting of 1,000 bands, American, 2 cents (500 labels are cut at once) ; German, 4| cents (50 labels are cut at once). The brief states that American lithographers sell their labels in Canada, Holland, England, and even in Germany in successful com- petition with the German goods. This could not be done if the cost of production were higher in America. Rates suggested/. Cigar labels and flaps, printed in less than 8 colors and bronze, 10 cents per pound; bands, 15 cents per pound, instead of 15 and 20 cents as at present. Cigar labels and flaps printed in 8 or more colors and bronze, 15 cents per pound ; bands, 20 cents per pound, instead of 20 and 25 cents as at present. Cigar labels and flaps printed in whole or in part of metal leaf, 30 cents per pound, instead of 35 and 40 cents as at present. (See also paragraph 1310, Lithographic products.) PARAGRAPH 1307. WRITING, LETTER, AND DRAWING PAPER. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Henry W. Stokes, representing the American Paper and Pulp Associa- tion. Mr. W. J. Raybold, representing B. D. Rising Paper Co., and the Writing Paper Manufacturers' Association, New York City. Hearings : Pages 3871-3886. Witness : Mr. Henry W. Stokes, representing the American Paper and Pulp Association. Size of industry. During the past 10 years the United States has become the leading paper manufacturing country in the world. The maintenance of this leadership means maintaining in an effec- tive way an industry whose product value in the United States ex- ceeds annually $1,000,000,000. 432 DIGEST OF TARIFF HEARINGS, H. R. 7456. There are 818 paper and 322 pulp mills in the United States whose 1920 product was valued at about $1,025,000,000. The capital in- vested in this industry is probably nearly $1,000,000,000, as shown by the forthcoming census reports. The industry requires a larger initial investment in plant and machinery than any other with an equal value of product. In 1909 the production of paper in the United States mills was 4,216,708 tons. In 1920 it was 7,334,614 tons. Paper or box board led with a tonnage of 2,313,449. Newsprint was second with 1,511,968 tons. Others in order are as follows: Book, 1,104,464 tons ; wrapping, 1,403,812 tons ; fine papers, 389,322 tons ; felts and building, 366,941 tons ; tissue, 177,447 tons. Book paper produced in 1920 was worth $220,000,000. Board was valued at over $200,000,000. Newsprint was worth approximately $150,000,000, and fine paper, though far less in ton- nage, approximately the same value as newsprint. The per capita production in all grades of paper is as follows: 1899, 57 pounds; 1904, 75 pounds; 1909, 93 pounds; 1919, 118 pounds; 1920, 138 pounds. Comparability. The difficulties confronting paper manufacturers lie in the competition from Scandinavian and German manufacturers who, with the advantages of depreciated currency, low wage condi- tions, and low standards of living, are able to make paper at a rate which American manufacturers can not approach. This situation, coupled with low freight charges from Europe to this country it costs less to ship a ton of paper from Europe to New York than to ship a ton of paper across New York State has made the situation of American paper manufacturers precarious in the extreme. Their market has been taken from them by European competition, in spite of the fact that America has the largest, fastest, and generally the most modern paper machinery in the world. When the German workman, for instance, is employed at a wage equivalent in purchas- ing power to about one-third of the wage paid in America, the situa- tion of the American manufacturer is easily realized. The manu- facturer feels that there must be some protection against competi- tion, based upon the wide divergence in wages as between this coun- try and Europe. The question of depreciated exchange is a difficult one, but a solution should be worked out to protect American in- dustries. Rates suggested. A brief filed by the witness enters at length into the need of protection and classifies proposed rates in a statement covering pages 3873-3876. Hearings : Pages 3936-3937. Witness : Mr. W. J. Raybold, representing B. D. Rising Paper Co. and the Writing Paper Manufacturers' Association. Rates suggested. The rates in H. R. 7456 are entirely satisfactory Paragraph 1307 to be changed so as to clarify the meaning and make it more adaptable to imported paper. Remarks. An exhibit sets forth a petition submitted at a hearing before the Committee on Ways and Means against an increase of duty on china clay or kaolin. " At the same hearing representatives of domestic china clay producers requested an increase of duty to $6 per ton. Annexed to the petition are letters from the Exford DIGEST OF TARIFF HEARINGS, H. R. 7456. 433 Paper Co., S. D. Warren Co., the West Virginia Pulp & Paper Co., producers of considerable domestic book paper, urging that the duty be not increased; also, a letter from Bird & Son, East Walpole, Mass., manufacturers of low-grade paper, to the effect that the firm can not use English clay, as its price, compared with the domestic, is prohibitive. Bird & Son state they have been importing clay for over 30 years. A brief from the association of American producers (Tariff In- formation, Series No. 5, 1921) states that there is no substitute for English clay in the better classes of paper; the fact that American manufacturers continue to pay duty for the English clay to such a large extent appears to confirm this statement. The price of English clay is given in the exhibit as $14.65 per ton at American seaports. The cost of the higher grades runs up to $20 per ton, based on par exchange of $4.86. The comparative prices given in the statistics of the American clay producers do not take into account that English clay varies in moisture content from 12 to 18 per cent, while domestic clay varies from 3 to 8 per cent, a difference of about 10 per cent. The American clay producers recapitulate the bases of their re- quest for a duty of $6 as follows : Present duty 1 $1.25 Railroad freight advance to far northern points 2. 75- Minimum figure to offset the ballast ocean freight rate on foreign clay and the determined effort to drive the domestic industry out of business 2. 00 Total tariff asked 6.00 The testimony of the American clay producers contains many ref- erences to a falling off of 60 per cent in their 1921 business. There are approximately 10,000 men employed in the clay industry, at average wages running " all the way from $2.50 to $10 per day." The cost in the European clay industry is 60 per cent under that of the American. The average importation of china clay from Europe to this country for the years 1910 to 1919, inclusive, was 220,808 tons per annum. A letter from Mr. D. C. Morris, purchasing department, Oxford Paper Co. (p. 3946), states that if the duty on clay were increased to $6 per ton his company's cost of manufacturing paper would be in- creased approximately to $125,000, which would have to figure in the price of the manufactured product. Mr. E. L. Young, purchasing agent, S. D. Warren Co. (p. 3947), states in a letter that his company must use English clay regardless of price ; should the duty be increased, the additional expense would have to be passed on to the consumer. Mr. Thomas Luke, vice president, West Virginia Pulp & Paper Co. (p. 3947), states that there is no objection to rates being raised on an even plane, but his company would object strenuously to a material increase in the duties on clay if nothing were done for the producers of paper. The company uses both domestic and English clay. Mr. G. M. Graves, purchasing agent, Bird & Son (p. 3947), says that prices of English clay are still prohibitive compared to the do- mestic which they are using. 434 DIGEST OF TAEIFF HEARINGS,, H. R. 74-56. Mr. L. W. Bowmall, secretary, the Association of American Wood Pulp Importers, submitted briefs (see pp. 3948 to 3950, inclusive), in which the paper-stock and pulp-wood situation as relating to the paper manufacturer are discussed. PARAGRAPHS 1309, 1313, AND 1640. BRISTOL BOARD AND PRESSBOARD. WITNESS. FAVORING LOWEB DUTIES : Mr. John T. Wheelwright, Boston, Mass. (Brief.) Hearings : Pages 3945-3946. Remarks. The brief maintains that an increase in duties on the finished products of the paper industry is not as important as the free entry or reduction of duties on paper stock, pulp, china, clay, etc., articles necessary for the manufacture of paper. The bill re- ported by the Ways and Means Committee this year has augmented many of these duties, particularly that on china clay, which it has raised from $1.25 to $2.50 a ton. It is of vital importance to New England manufacturers that the items in paragraph 1640 be kept free of duty. "Rag pulp; paper stock, crude, of every description, including all grasses, fibers, rags, waste, including jute, hemp, and flax waste, shavings, clippings, old paper, rope ends, waste rope, waste bagging, and all other waste, not specially provided for, including old gunny cloth and old gunny bags, used chiefly for paper making, no longer suitable for bags." Paper made from this stock has to compete with paper made of wood fiber by mills close to coal and timber lands; any appreciable advance in the cost of pulp made from this stock places the New England manufacturer at a great disadvantage. To keep the indus- try in New England it is necessary for the manufacturers not to be too unduly handicapped. As to china clay, the particular reason why a duty on this is bur- densome is that the American clay can not be satisfactorily used in many grades of paper. The brief refers to a supplemental brief of the John Richardson Co., filed with the Committee on Ways and Means, against an increase of duty on china clay or kaolin. Touching wood pulp, reference is made to a pamphlet marked " B " in re Schedule M, paper and books, paragraph 649 of the free list, filed by the Association of American Wood Pulp Importers, which contains the arguments in favor of keeping such pulp upon the free list. The brief also calls attention to paragraph 1309, in which " bristpl board of the kind made on Fourdrinier machines " is given a certain rate of duty. It is suggested that the words " of the kind made on Fourdrinier machines " be omitted, thus putting all bristols without any doubt upon the same basis. In the United States fine bristol boards are made on Fourdrinier machines, but mostly on cylinder machines, and the boards made on the latter are similar in quality, texture, and use to those made on the Fourdrinier machines in other countries. It seems clear, therefore, that foreign bristols made on cylinder machines will be subject to the same rate of duty. DIGEST OF TARIFF HEARINGS, H. R. 7456. 435 PARAGRAPH 1309. HANGING PAPER. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Henry Burn and Mr. George Tait, representing the American Wall Paper Association. Hon. J. S. Parker, a Representative in Congress from the State of New York. Hearings : Pages 3937-3941. Witness: Mr. Henry Burn, president, representing the American Wall Paper Association. Comparability. Increasing competition from Germany renders it necessary that a higher rate of duty be granted. Rates suggested. A rate of at least 3 cents per pound and an ad valorem rate of 20 per cent, A previous request for a duty of 25 per cent ad valorem was based on an expected 25 per cent reduction in wages, which has not materialized. Remarks. The association represents an industry which, during the war, was classified as nonessential and was subjected to restric- tions of the severest kind. These restrictions not only made the busi- ness unprofitable, but it would have been annihilated had the war continued a few months longer. The industry, which ought now to be receiving the benefits of peace time, finds itself confronted with many difficulties instead of receiving the full benefits and protection that the Government can give. Hearings : Pages 3941-3942. Witness : Mr. George Tait. In a brief, the witness states that there is possibly no other manu- factured product whose first cost is so great as in wall-paper produc- tion a one-season product. The brief supports the American valua- tion plan. Hearings : Pages 3939-3940. Witness : Hon. James S. Parker, a Representative in Congress from the State of New York. Cost and selling prices. American wall paper is quoted to-day (December, 1921), at 18 cents per roll, while similar wall paper from Germany is being~laid down here at less than 3 cents per roll. Size of industry. The American wall-paper industry produces from $25,000.000 to $30,000,000 annually. Comparability. The greatest competitors in the wall-paper in- dustry are the Germans, who enjoy a tremendous advantage in cheap labor, longer working hours, and abnormal, favorable rates of ex- change. These advantages could very easily ruin the American in- dustry by capturing the American market unless some preventive measure is passed. Rates suggested. Briefs presented in the association's interest favor a designation by itself for the industry's product and suggest that it be made to read as follows : Hanging paper, not printed, lithographed, dyed, or colored, 10 per centum ad valorem. Paper hangings, printed, lithographed, dyed, or colored, 3 cents per pound and 20 per centum ad valorem. 436 DIGEST OF TARIFF HEARINGS, H. R. 7456. Remarks. There is probably no other manufactured product whose first cost is so great as in wall-paper production; it is a one-season product, requiring a brand new offering each year. The greater part of the work is done by skilled labor, employed on a 50-week basis, with a guaranty of 45 full weeks' and five half-weeks' pay, whether the plant operates full time or not. These men earn on straight time wages from $43 to $50 per week and for overtime work time and one-half pay. The wages paid even in prewar years were from three to five times greater than those paid by German competitors. With the depreciated German mark of to-day comparison of wages is not possible. PARAGRAPH 1309. WRAPPING PAPER. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. M. E. Marcuse, representing wrapping-paper manufacturers, Rich- mond, Va. Wrapping Paper Manufacturers. (Brief.) Hearings : Pages 3942-3943. Witness: Mr. M. E. Marcuse. Size of industry. The wrapping-paper industry represents about 154 manufacturers who turn out annually about 1,403,000 tons of wrapping paper. They employ about 35,000 people, and have a capi- tal of over $140,000,000. Comparability. There is a large importation of wrapping paper, and American manufacturers fear that the Kraft paper made in Scandinavia, Finland, and in Germany will come in. Importations from Canada are negligible. Rates suggested. The rate to be raised from 23 to 30 per cent ad valorem. Remarks. Wrapping paper is made chiefly out of wood. Witness: Wrapping Paper Manufacturers. (Brief; no appear- ance at hearings.) Rates suggested. The brief requests an increase in duty from the 23 per cent ad valorem proposed in H. R. 7456 to 30 per cent. In the past the price of imported wrapping paper c. i. f. Atlantic ports has ranged from 65 to TO per cent of the market price of similar American papers, but it is now being freely offered c. i. f. New York at 56 per cent of that price. The rate of 30 per cent now asked for would therefore still leave a margin in favor of foreign manufacturers, this being regarded as a temporary condition. Foreign Kraft paper is being freely offered for $67 per ton, the American price being $120, so that, even with a 30 per cent duty, the foreigner would still have an advantage of $17 per ton. Kraft is the standard wrapping paper of this country. PARAGRAPH 1310. BOOKS. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Charles E. Graham, representing himself and 11 other concerns. Mr. F. J. Belaire, representing the International Brotherhood of Book- binders, Washington, D. C. DIGEST OF TARIFF HEARINGS, H. R. 745C. 437 FAVORING PROPOSED OR HIGHER DUTIES Continued. Mr. Edward F. McGrady, representing American Federation of Labor, Washington, D. C. Mr. Daniel S. Brassil, representing employing bookbinders of America, Xe\v York, N. Y. Mr. Alfred E. Omrnen, representing the United Typotlietse of America. Mr. Maurice Saunders, representing Lithographers Employers' Association, New York, X. Y. FAVORIXG LOWER DUTIES : Mr. Herman Tapke, representing Fred Pustet Co. (Inc.) and other im- porters, Brooklyn, N. Y. Mr. John Macrae, representing National Association of Book Publishers, the E. P. Dutton Co., and the American Bookbinders' Association, New York, N. Y. Mr. M. L. Raney, Johns Hopkins Hospital, representing 40 educational in- stitutions ; and himself, as importer. Dr. A. S. W. Rosenbach, representing the Free Library of Philadelphia and book trade of the United States, Philadelphia, Pa. The Charles E. Lauriat Co., Boston, Mass. (Brief.) The American Library Association, Chicago, 111. (Brief.) The Trustees of the New York Public Library. (Brief.) The Krauth Memorial Library. (Brief.) Mr. Charles F. Amidon, Fargo, N. Dak. (Brief.) The Board of Trade of the American Booksellers' Association. (Brief.) Hearings : Pages 3951-3953. Witness: Mr. Charles E. Graham, representing himself and 11 other concerns. Rates suggested. A clause in paragraph 1310 reads : " Books of paper or other material for children's use, printed lithographically or otherwise, not exceeding in weight 24 ounces each, with more read- ing matter than letters, numerals, or descriptive words, 20 per centum ad valorem." It is pointed out that this clause covers nearly all toy books, and leaves the toy paragraph 1414, in which toy books are placed by being taken from the lithographic schedule, practically in- operative, so far as toy books are concerned. The interests repre- sented ask, therefore, for the entire elimination of the above clause from paragraph 1310, and the rewriting of the toy-book clause in toy paragraph 1414, as requested by the Toy Manufacturers' Associa- tion. Paragraph 1414, as it now stands and changed as suggested, will be found on page 3953. Hearings : Page 3965. Witness: Mr. Felix J. Belaire, representing the International Brotherhood of Bookbinders. Rates suggested. The members of the brotherhood feel that the inadequate tariff on imported bound books places them at a disad- vantage, as wages are much lower in foreign countries than in America. They ask that this be taken into consideration, especially as these books are given the foreign and not the American valuation. A brief submitted covers points at greater length. Hearings: Page 3965. Witness : Mr. Edward F. McGrady, representing the American Federation of Labor. Rates suggested. Referring to the duty on imported books, the witness states that a duty should be placed upon all binding and, in the case of old books, upon the bindings rather than upon the books themselves. The federation is in favor of American valua- tion, based upon the wholesale selling price in America. 7713422 29 438 DIGEST OF TARIFF HEARINGS, H. R. 7456. Hearings : Pages 3966-3968. Witness : Mr. Daniel S. Brassil, representing employing book- binders of America. Size of industry. In 1920, Bensinger, in New York, printed and bound 5,000 copies of a Catholic missal, which was very satisfactory. Comparability. American publishers send books abroad to be bound, at a cost of $1.25 per volume, instead of paying $1.95 in America, this difference being due to labor. The books are then returned to America, to be sold at a lower price than those bound here. Some New York booksellers have men in England scouring the country for books over 20 years old. These books they have bound and then send them to America duty free, as they are more than 20 years old. Rates suggested. The rate to be as stated in the bill : 35 per cent or, if possible, increased to 50 per cent to cover extra binding. The binding can be done as well in America as in foreign countries, but must have protection to prevent the work from being sent abroad. Protection is desired on religious and educational as well as on ordinary books. It is suggested that the wording in regard to old books be changed to read " books printed and bound more than 20 years." Hearings : Pages 3968-3970. Witness: Mr. Alfred E. Ommen, general counsel for the United Typothetae of America. Size of industry. Speaking for the employing printers of America, the witness stated that almost 500,000 persons are employed in the industry, producing about $1,000,000,000 annually. Comparability. While employees receive good wages, in a well- established industry, they have to compete with much lower wages and longer hours abroad. The witness referred to the thousands of books not made at all in this country, it being so much cheaper to send the plates to the other side and have them printed and bound. Official figures of weekly time rates in 27 towns in Great Britain, in December, 1920, for hand compositors, book and jobbing work, show $17.40 as against $50 in New York City. In France, in a number of cities, bookbinders receive from 35 cents to $1.53 a day, based on current exchange. Rates suggested. The association adheres to its former request for a duty of 50 per cent ad valorem. Hearings: Pages 3917-3929. Witness : Mr. Maurice Saunders, representing Lithographic Em- ployers' Association. Rates suggested. Double the rates provided in the Fordney bill to all items in paragraph 1310. Even that will not completely equalize the German advantage over domestic; the association does not expect any advantage. Remarks. A brief filed by the witness (pp. 3925-3929) discusses the proposed rates in comparison with those under the act of 1909. The interest represented by the witness is also referred to under paragraph 1306. DIGEST OF TARIFF HEARINGS, H. R. 7456. 439 Hearings : Pages 3953-3958. Witness : Mr. Herman Tapke, representing the Fred Pustet Co. Cost and selling prices. Religious books used in Roman Catholic churches and other Catholic institutions, are imported annually from foreign countries as follows : Prayer books, $50,000 ; religious educa- tional books used by students for the priesthood, $100,000; books used on the altar during religious ceremonies, $200,000; books of religious character used by the priesthood and laity, $50,000, making an approximate annual total in excess of $400,000. Size of industry. As there are no publishers of Roman Catholic religious books in America, there is no competition. Rates suggested. The present duty upon the books enumerated ranges from 20 to 33^ per cent, depending upon the binding. The witness requests that these books be 'provided for under the proposed paragraph 1520, amended to read as follows: Bibles, comprising the books of the Old and the New Testament, or both, bound or unbound ; books and pamphlets, bound or unbound, printed wholly or chiefly in languages other than English, that are used or intended to be used in connection with religious ceremonies or in association with religious festi- vals either by the clergy or by the laity or that are used or intended to be used by the clergy or in religious educational institutions. Hearings : Pages 3958-3963. Witness : Mr. John Macrae, representing the National Association of Book Publishers, E. P. Dutton & Co., and The American Book- sellers' Association. Rates suggested. The duty on books to be made as low as possible. This duty should not, under any circumstances, exceed 25 per cent ad valorem on books printed in English, and Congress should assess the dutiable value of imported books from England at 15 per cent ad valorem. It is urged that all books in foreign languages, and books 20 years of age and over, be placed on the free list. These books do not compete with American manufactures and are mainly used for educational purposes. The publishers of the United States wish to have a clause under which the duty to be paid on imported books will be levied on the price paid by the American publisher to the publisher in England. Trade conditions prevailing in England are practically the same as in the United States. Hearings: Pages 4398-4401 (schedule 15, free list.) Witness : Mr. M. L. Rahey, Librarian of Johns Hopkins Hospital y Baltimore, Md., representing 40 educational institutions. Rates suggested. Educational books, and books over 20 years old, to be placed on the free list. The rate in the existing tariff measure is 15 per cent on such books as are dutiable. In H. R. 7456 it is proposed to raise this to 20 per cent. In the tariff act of 1842 the rate was based on size, value, weight, etc. So far as the ad valorem duty was then fixed it corresponds with the* 20 per cent in the present bill. All foreign language books, and all books as old as 20 years, should be placed upon the free list. The various suggested amendments to the paragraphs under discussion will be found on page 3994. Educational institutions and libraries are concerned because of the proposal that their textbooks shall be made dutiable. If these 440 DIGEST OF TARIFF HEARINGS, II. R. 7450. are placed upon the dutiable list the charge will either be borne by the student himself, or by the institution which imports them. An- other reason for this objection is that American producers are using the present tariff as an excuse for abnormal increases in their prices. Hearings : Pages 3963-3964. Witness : Dr. A. S. W. Rosenbach, representing himself as an im- porter ; also, the Free Library of Philadelphia, the American Library Association, and the rare-book trade of America. Rates suggested. The items enumerated in paragraph 1310 to be E laced on the free list, which should also include books in foreign mguages, books over 20 years old, and other educational books. To place a duty on books over 20 years old would be a serious hindrance to those contemplating the establishment of libraries, so necessary to any country. If it is desired to protect American binders, a proviso could be inserted carrying a duty on books the binding of which was executed within a period of 20 years, but the duty should be on the binding and not on the books. Hearings: Pages 3946-3950. Witness: The Charles E. Lauriat Co., Boston, Mass. (Brief.) As a dealer in both American and English published books, having an established business of 50 years' standing, the company protests against the clause in paragraph 1310, applying to books bound wholly or in part in leather. The company regards the proposed duty of 33| per cent ad valorem as unnecessarily high. Wages in English binderies have advanced over 200 per cent above prewar level a statement verified by figures and enforced by quotations for foreign binding. The company regards the American valuation plan as impractical, even impossible, as applied to books. Attention is devoted to the proposed imposition of a duty on books more than 20 years old and to the similar burden on books and pamphlets' in foreign languages. Both of these proposals are deprecated by the company. Witness : The American Library Association, Chicago, 111. (Brief ; no appearance at hearings.) The brief is a protest against the proposed increase in duties, and limitations of privileges, in regard to books. The changes proposed are prejudicial to libraries, which must ex- pect a sharp advance in the price of all foreign books, as was shown by the present duty of 15 per cent on recent English books, raising the price in some cases to more than double the price in England. The duty would also discourage the buying up of European stocks when especially favorable opportunities offer, and libraries would have to pay duty on all copies of a book beyond two. The provision in regard to affidavits will entail an enormous additional amount of clerical work. Stress is also laid upon the potential hindrance to research work, and the association is unable to see any gain in im- peding the entry of a family of such character as to own a library exceeding $250 in value. The necessary textual changes are incorporated in the brief. Witness: The trustees of the New York Public Library. (Brief; no appearance at hearings.) DIGEST OF TARIFF HEARINGS, H. R. 7456. 441 Remarks. The executive committee presents, in the form of a printed leaflet, the minutes and resolutions adopted by the trustees at a meeting on January 11, 1922. These protest against the provi- sions of H. R. 7456, increasing the duty now levied on books and other printed matter imported into the United States and removing from the free list certain classes of books now included therein. The trustees regard the proposed changes as constituting a tax on knowledge and education, and a serious burden upon institutions such as their own. Details of the changes desired to give effect to the policy favored by the trustees are given. Witness : The Krauth Memorial Library, Philadelphia, Pa. (Brief ; no appearance at hearings.) Rev. Luther D. Reed, director, is unable to see any particular pur- pose in imposing a duty on books in foreign languages. The libraries of universities, colleges, and scientific institutions would be put to considerable trouble and expense by the affidavit provisions of this paragraph. Witness: Mr. Charles F. Amidon, Fargo, N. Dak. (Brief; no ap- pearance at hearings.) The writer objects to the proposed duty of 20 per cent on all foreign-language books and on books in English 20 years or more old. " If there is anything we need it is knowledge. Let us not put a tax on it." Witness: The Board of Trade of the American Booksellers' Asso- ciation. (Brief: no appearance at hearings.) In support of a protest against the proposed imposition of a duty on books the brief covers a reprint of an article from The Bookseller and Stationer, August 1, 1921. written by Mr. Charles E. Buller, chairman of the above-named board. The writer regards the pro- posed duty as " a step fraught with many serious possibilities." Books differ from every other article of merchandise in being the great educational medium and uplift throughout the land. While the literary production of this country is good, that of Europe is equally if not more so. and its books are read by Americans. Foreign- language books should be admitted free of duty. PARAGRAPH 1310. GREETING CARDS. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Chas. J. West, representing greeting-card manufacturers. The Keating Co.. Philadelphia, Pa. (Brief.) The Campbell Art Co.. Elizabeth. N. J. (Brief.) Hearings : Pages 3970-3971. Witness: Mr. Charles J. West. Hates suggested. The wording of paragraph 1310 to be changed. After the words " booklets, wholly or in chief value of paper, deco- rated in whole or in part by hand or by spraying, whether or not printed " add " not specially provided for," 15 cents per pound. The last sentence in the paragraph to be changed from " Christmas and other greeting cards, printed lithographically or otherwise, or deco- rated in whole or in part by hand or by spraying. 30 per centum ad valorem." to read " greeting cards arid all other social and gift 442 DIGEST OF TARIFF HEARINGS, H. R. 7456. cards, including those in the form of folders and booklets, wholly or partly manufactured, with or without text or greeting, 60 per centum ad valorem." Witness : The Keating Co., engravers and stationers, Philadelphia, Pa. (Brief; no appearance at hearing.) Rates suggested. The brief directs attention to the danger, under the provisions of H. R. 7456, of greeting cards in the form of booklets or folders being charged a duty of 7 cents per pound. The company does not believe it to be the intent of the bill to admit such foreign products at this low rate. There may have been some confusion be- tween this class of goods and advertising booklets and small toy books, to avoid which the following wording of the close of paragraph 1310 is suggested : Cards, folders, and booklets intended for social use. including post cards, not specially provided for, printed, lithographically or otherwise, or decorated in whole or in part by harrtl coloring or spraying, 30 per centum ad valorem. In another communication the company desires protection for such cards as place, tally, and birth announcements. In the absence of suggested textual changes these would come under paragraph 1306 duty levied according to weights and practically no protection would be given. Witness: The Campbell Art Co., Elizabeth, N. J. (Brief; no ap- pearance at hearings.) Mr. Charles J. West, vice president of the company, in behalf of the greeting card manufacturers, suggests that the wording of the paragraph be changed. As it now stands cards in the form of booklets and folders would be subject to a duty of either 7 or 15 cents per pound instead of 30 per cent ad valorem. The original and the proposed amended construction of paragraph 1310 are appended in parallel columns. Unless some such change is made foreign competitors will see to it that all their creations are manufactured in the form of booklets. PARAGRAPH 1313. Box BOARD. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Charles R. White, representing manufacturers of box boards and paper boards, Washington, D. C. Hearings : Pages 3888-3892. Costs and selling prices. It costs $9.50 to deliver a ton of box board from Illinois or Wisconsin to the New York market. With pres- ent freight rates from Hamburg, Germany, Netherlands, or Belgium, it can be delivered at the eastern seaport for $6 per ton, thus show- ing an advantage to the foreigner of $3.50 on freight rates alone. The present wholesale price of box board in America ranges from $32.50 to $80 per ton. For two years, up to October, 1920; the price was as much as $100 per ton. Size of industry. About 2,000,000 tons of box board is produced in America annually. There are about 150,000 persons employed in the industry. Rates suggested. A specific duty of 1 cent per pound to prevent ambiguity in case American valuation is adopted. Remarks. About 50,000 tons of box board were imported in 1920 from Canada, the Netherlands, and Belgium, chiefly from Canada, DIGEST OF TARIFF HEARINGS, H. R. 7456. 443 where paper board is made largely as a by-product, and delivered to Boston or Xew York at a much lower rate than domestic manufac- turers have to pay. Canada has the forests the raw material and with the lower freight rates has the advantage over the domestic trade. Protection must therefore be obtained for the American industry. PARAGRAPH 1313. FLOXG, A PAPER MATRIX OR DRY MAT. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Benjamin Wood, representing Wood Flong Corporation, New York City. FAVORING LOWER DITTIES : Mr. Jason Rogers, publisher of the York Globe. (Brief.) Hearings : Page 3971. Witness: Mr. Benjamin Wood. Costs and selling prices. The selling price of dry mats to news- papers is 20 cents per mat, or sheet, and with the present cost of labor and materials it has been difficult to maintain this price. * The Germans are offering as low as 8 cents each in order to undermine the American industry. The statement has been made that opera- tives in the German mills are being paid the equivalent of 2 cents per hour, while the American workman is paid at the rate of 66 cents per hour. Size of industry. This brand new industry was created as a result of the war. Thus far there is only one company manufac- turing in New York. Rates suggested. A specific duty of 26 cents per pound, the specific being preferred to ad valorem for the reason that there is mostly one grade and one size used by newspapers. The bill gives 28 per cent ad valorem, based on American valuation. This is not sufficient to protect the industry, and a duty of 26 cents per pound is abso- lutely necessary to enable the American industry to survive. The words " stereotype matrix, mat or board, 28 per cent ad valorem" should be eliminated, and in their place substitute the following : " Flongs, known by the printing trade as ' dry mats ' or prepared sheets of molding material to be used for the purpose of making printing plates, 26 cents per pound." Remarks. The industry was formerly exclusively owned and con- trolled by the Germans and is a German chemical invention covering what is known as " flong," a paper matrix used in making matrices for casting plates by the stereotype process used in newspaper offices and printing plants. The corporation was unable to discover the German method of manufacture of matrix paper until after expend- ing a large sum of money. Having done so, it is now confronted with a competition which the industry in its extreme youth can not face. The Germans have come back, and finding only one com- petitor are endeavoring to regain the market by underselling at such figures as to make the domestic industry impossible without protection. A brief submitted by the witness is printed in full on page 3973. 444 DIGEST OF TARIFF HEARINGS, H. R. 1456. Witness: Mr. Jason Rogers, publisher of the New York Globe. (Brief; no appearance at hearings.) Mr. Rogers protests against any such duty on dry mats as that sug- gested above by Mr. Benjamin" Wood. The proposed duty of 26 cents per pound would mean approximately 13 cents per mat. or between 80 and 120 per cent on the cost of manufacture. Such a duty would act prohibitively and encourage domestic manufac- turers to take advantage of the artificial monopoly they would enjoy. Copies of controversial matter dealing with this topic are covered by the brief. PARAGRAPH 1313. WALL POCKETS. WITNESS, AND INTEREST RFPKESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Charles A. Hamilton, representing the Buffalo Art Manufacturing Co. Hearings : Pages 3978-3981. Costs and selling prices, The companv has reduced the prices on the largest wall pockets from $99 to $75 per 1.000. Prices for. the season of 1923 are $44, $58, and $75. The average cost of the pockets at the factory is : Small size, $41 : medium, $53 : large, $68. Labor costs represent for small size. $28 : medium. $33 ; and large, $39. Size of industry. To-day only one domestic concern is manufac- turing wall pockets. It employs about 100, mostly girls who are ex- perts, and the wages paid are from $16 to $40 a week. Owing to German competition, the output to-day (December. 1921) is about 250,000, as compared with 1.000.000 last year. This concern has in- vested about $100,000 in the business. Comparability. Owing to the enormous importation of wall pockets from Germany, one American company has been compelled to go out of business entirely and the other has recently been com- pelled to reduce its production from 30 different designs to 7. Rates suggested. A specific duty of 15 cents per pound, instead of 26 per cent ad valorem as proposed in the bill ; it will be impossible, otherwise, to continue this little industry. Remarks. A list of prices of by-products used in the industry is given on page 3979. Wall pockets are made principally from a coarse paper which is a by-product of tobacco manufactories. Its base is the tobacco stems which are thrown out in the manufacture of smoking material The price of this has gone down, but the prices of the essential aniline dyes have gone up. PARAGRAPH 1313. PAPER TUBES. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Frederick L. Chase, representing F. A. Chatee & Co., Providence, R. I., and the American Paper Tube Co., of Woonsocket, R. I. The American Paper Tube Co., Providence, R. I. (Brief.) Hearings : Pages 3981-3982. Witness : Mr. F. L. Chase. Rates suggested. The interests represented ask for the insertion of a clause providing for a duty of 5 cents per pound and 35 per DIGEST OF TARIFF HEARINGS, H. R. 7456. 445 cent ad valorem on paper tubes, tapered or parallel. The object is to take this product out of the basket clause, paragraph 1313. As matters stand, the paper from which these tubes are made carries the same duty as the finished tubes 26 per cent ad valorem yield- ing- no margin of protection for the labor and manufacture of the tubes. Witness : The American Paper Tube Co., Providence, R. I. (Brief ; no appearance at hearings.) Rates suggested. In view of the high development attained in the manufacture of paper tube products in foreign countries, notably German, Belgium, France, and Italy, and having regard to their advantages in present-day costs, the company asks for a duty of 8 cents per pound and 35 per cent ad valorem on paper tubes, tapered or parallel. Remarks. During the war, a great majority of the silk, woolen, cotton, and worsted spinners were entirely dependent on the output of the paper tube makers of the United States to run their plants. SCHEDULE 14. SUNDRIES. PARAGRAPH 1401. ASBESTOS MANUFACTURES. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Henry Paul Barnes, representing American manufacturers of asbestos materials. FAVORING LOWER DUTIES : Mr. Forest Bramble, representing the American Asbestos Dealers' Associa- tion, Baltimore, Md. Mr. W. E. Steelman, representing W. E. Steelman Co., Wilkes-Barre, Pa. Mr. Ed. Nicholson, representing Raybestos Co., Bridgeport, Conn. Mr. W. C. Dodge, jr., representing the Argus Asbestos Co. (Inc.), Port Chester, N. Y. Hearings : Pages 3893-3991. Witness : Mr. Harry Paul Barnes, representing American manu- facturers of asbestos materials. Costs and selling prices. Costs of asbestos manufactures vary greatly. The value of asbestos entering into these products ranges from 1 cent per pound to $1.50 per pound, and the value of the fin- ished materials ranges from 1^ cents per pound to $10 and upward per pound. Cost of production is about 55 per cent material and 45 per cent labor and overhead. Size of industry. Total value of production, $100,000,000; em- ployees, 30,000 to 50,000. The industry is comparatively new, having developed in the past 20 years. Comparability. Weekly wages for unskilled labor: In Germany, 150 marks (about $1.50) ; in England, 25 shillings (about $6) ; in the United States, $20. For carders, spinners, and other skilled workers : The German worker receives 200 marks (about $2) ; the English weaver, 55 shillings (about $13) ; and the American worker of the same class, from $30 to $40 per week, taking present exchange value in each conversion. American workmen will not work with certain cheap grades of asbestos fiber, as they are detrimental to health, but they are used 446 DIGEST OF TARIFF HEARIXGS, H. R. 7456. and worked by Europeans. Foreign manufacturers could furnish sufficient quantities for the requirements of this country. Imports have not been large, as the requirements are not heavy at present, but such orders or inquiries as appear upon the market are immedi- ately seized by importers at prices far below the American manu- facturer's cost. Mr. Barnes filed with his testimony an article from a German publication, the Gummi-Zeitung, relating to the expansion of the German asbestos industry. Rates suggested. The proposed rates are not considered suffi- ciently high, and increases are requested to conform to the rates contained in a bill introduced in the House of Representatives by the Hon. Henry Watson, of Pennsylvania, as follows: Dutiable list. Asbestos paper and millboard and articles manufactured therefrom, not otherwise provided for in this section, 5 cents per pound; asbestos paper and millboard, manufactured from long-fiber asbestos for gaskets, etc., electrical papers not exceeding 0.005 of an inch in thickness or articles manufactured therefrom, 10 cents per pound. Articles composed of asbestos and hydraulic cement, in sheets or plates not exceeding one-eighth of an inch in thickness, li cents per square foot ; more than one-eighth of an inch but not exceeding one-fourth of an inch in thick- ness, 2 cents per square foot ; more than one-fourth but not exceeding one-half of an inch in thickness, 5 cents per square foot. Sheets that are corrugated or otherwise differing from flat sheets, 6 cents per square foot or fraction thereof; colored sheets containing an admixture of matter other than asbestos and hydraulic cement, 50 per cent ad valorem in addition to the above rates. Asbestos wick and rope, or articles manufactured therefrom, 35 cents per pound. Asbestos woven-sheet packing, in rolls, exceeding one thirty-second and not exceeding one-eighth of an inch in thickness, or articles manufactured there- from, 50 cents per pound. Asbestos gaskets folded or cut from the straight sheet, rubberized, graphited, or otherwise treated with waterproofing or lubricating compound or com- pounds, or articles manufactured therefrom, 65 cents per pound. Asbestos yarn containing more than 10 per cent of foreign matter other than asbestos, or articles manufactured therefrom, 50 cents per pound ; asbestos yarns and listings exceeding 0.025 of an inch in thickness, containing less than 10 per cent of foreign matter, and cloths, tapes, cords, or other articles manufactured therefrom, $1.75 per pound; not exceeding 0.025 of an inch in thickness, $2.50 per pound. Asbestos mantle threads, with or without wire, treated or untreated, $2.50 per pound. Asbestos textile fabrics, containing 10 per cent and not more than 20 per cent of foreign matter other than asbestos, 75 cents per pound; containing more than 20 per cent of foreign matter other than asbestos, 50 cents per pound. All other manufactures of asbestos and articles or manufactures of which asbestos is the component material of chief value, not specially provided for in this section, 40 per cent ad valorem. Remarks. Mr. Barnes cited a quotation received from an English manufacturer for asbestos yarn, containing less than 10 per cent cotton, of 3s. 3d. per pound, or approximately 75 cents. The cost of labor in this country on this class of yarn exceeds this selling price, and its total cost is approximately $2.50 per pound. With reference to the brief filed by the American Asbestos Deal- ers' Association (represented by Mr. Bramble), the witness stated that those companies considered the question only from the view- point of imports of shingles from Canada. Shingles are imported from Europe, chiefly Belgium at present, but they will be imported largely from Belgium and Germany. DIGEST OF TARIFF HEARINGS, H. R. 7456. 447 The thickness clause in the proposed rates should not be changed. The majority of shingles do not exceed one-eighth inch in thickness. Ordinary shingles are one-eighth inch in thickness. The increased duty on colored shingles is necessary to protect the American manufacturer from German shingles. Imports from Canada are chiefly of gray shingles, but because of the dye industry Germans are able to manufacture colored shingles much more cheaply, the coloring material comprising about 60 per cent of the cost. Seventy-five per cent of exports went to Cuba, the remainder to South America. It is impossible for an American manufacture^ to export his products to a country manufacturing asbestos products. The reverse is not true. Imports have been made into the United States from England, Germany, Italy, France, and other countries where asbestos materials are produced. Were the shingles assessed on the square of surface covered it would be possible to bring in sufficient shingles as one square to cover two squares. A monopoly on this class of goods would not result from increased rates, as there are at least five companies producing them at the present time and, as the patent for manufacturing as- bestos shingles has expired, there is no doubt that in a short time additional companies will be manufacturing them. Hearings : Pages 3996-4004. Witness : Mr. Forrest Bramble, representing the American Asbes- tos Dealers' Association. Costs and selling prices. The witness attached to his brief the following table, showing prices at factory of imported manufactures of asbestos: 448 .DIGEST OF TARIFF HEARINGS, H. R. 7456. 18 If s~ 3 S 8* pi fill \-SfS S5S Mil iiili! MKii! &*Sflj : ' :~-5 wSg2 ^ M ; . K of^ K -ti o " = *38-e- i O!-r ts nt r c ;sr s- s 1 ^ : S3 1 2SS : ; : s^a : SB Jill S ^ ^SS?- I I siii si 8 S fcS Si I S oa us oo tZt't 2SS2 *r oo eg eg t Es gg X io 5 - - a as. ill III! c 2 -.= fi ! ^i|i is 1 II ^t a| | =ss|a g- issifii |l|t|l!|| ofe2 gss-s-g'SS' n the ground of public policy it might be urged that toothbrushes be placed on the free list. DIGEST OF TARIFF HEARINGS, H. R. 7456. 457 It is recommended that the duty on toilet brushes, including tooth- brushes, be reduced from 35 to 25 "per cent ad valorem. Remarks. Copies of letters addressed to the chairman of the Com- mittee on Ways and Means from F. W. Wool worth Co., McCrory Stores Corporation, and the American Wholesale Corporation (Balti- more Bargain House) are attached to the brief from which the above is partly abstracted. These letters protest against any increase in the tariff on toothbrushes. Remarks. It is claimed that toothbrushes made of celluloid would be dutiable under paragraph 29 of H. R. 7456 at 65 cents a pound and 25 per cent ad valorem as a result of that paragraph providing that all articles composed chiefly of celluloid be dutiable under that paragraph, whether or not more specifically mentioned elsewhere. Hearings : Pages 4043-4046. Witness: Dr. Thaddeus P. Hyatt, chairman Oral Hygiene Com- mittee of Greater New York, and in charge of dental department Metropolitan Life Insurance Co. Costs and selling prices. A good toothbrush from France will re- tail at from 15 to 20 cents apiece. Prophylactic toothbrushes (do- mestic made) cost 40 to 50 cents apiece since the war, and under normal conditions about 25 cents apiece. The witness disapproves of cheap toothbrushes largely used on account of price. The Japa- nese send " big, unhandy, wide things." Size of the industry. There are only two toothbrush manufactur- ers in America, each manufacturing a "specialty. Comparability. Only high-priced toothbrushes are produced in the United States ; not the cheaper ones. Rates suggested. Toothbrushes to be on the free list. A brief filed by the witness (pp. 4045-4046) emphasizes the recog- nized importance of mouth hygiene in its relation to health and de- preciates any action tending to increase the cost of the very articles necessary for the maintenance of clean and healthy mouths." Witness: The Williams Brush Co., Philadelphia, Pa. (Brief; no appearance at hearings.) Costs and selling prices. The tariff duty is reckoned as part of the cost of the brush and as such is subject to the same profit as any other item of cost. The chief item of cost in domestic toothbrushes is neither the material nor the labor, but advertising. Size of industry. There are only two concerns in the United States manufacturing toothbrushes. Both manufacture special brands protected by copyrights. Comparability. Popular-priced brushes used by the masses can not be produced in America. Rates suggested. The brief raises the question whether it would not be advisable to place toothbrushes on the free list. American valuation would raise the tariff between 50 and 60 per cent, thereby ruling out the cheap brush. The American valuation plan ^ referred to as abominable. 458 DIGEST OF TARIFF HEARINGS, H. R. 7456. Witness: The Horner-Kensil Co., Philadelphia, Pa. (Brief; no appearance at hearings.) Costs and selling prices. Extravagant advertising makes the price of toothbrushes prohibitive to poor children. They are very un- satisfactory and poor in quality and are produced by a machine, em- ploying very little labor. Experience in the past has always been that prices vary with changes in the tariff that cost of production is not considered in the making of schedules. Comparability. Inexpensive brushes can not be made in America. Rates suggested. The rates as set forth in the Fordney bill on toilet brushes should be sharply revised downward. Toothbrushes should be permitted to come in free of duty. The brief states that it would be impossible to establish an equitable or satisfactory "American valuation on toilet brushes. They have never been standardized, and can not be, owing to the wide variations of the materials and designs. No two lots are of similar value.'' Witness : Charles L. Huisking (Inc.) , New York City. (Brief ; no appearance at hearings.) Costs and selling prices. The prices of brushes are higher than they ought to be and the trend of costs should be down rather than up. An increase in tariff rates would have the effect of arbitrarily increasing the cost to all consumers. PARAGRAPH 1408. BRISTLES. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OB HIGHER DUTIES : Mr. James H. Preston, representing the William Wilkens Co., Baltimore, Md. FAVORING LOWER DUTIES : The American Brush Manufacturers' Association. (Brief.) Hearings : Pages 4049-4052. Witness : Mr. James H. Preston, representing the William Wilkens Co. Costs and selling prices. American bristles have been so high in comparison with foreign that the cheap foreign article has entirely driven them out of the market. Size of industry. The William Wilkens Co., of Baltimore, estab- lished in 1848, employs 500 people, and is practically the only American manufacturer of bristles using the American bristle in the United States. At present the company does $50,000 worth of business per year, but owing to foreign competition the business is in the hands of a receiver. The American manufacture of bristles constitutes only 1 per cent of the total bristle production used in the United States. Rates suggested. Seven cents per pound plus 15 per cent ad valorem. An ad valorem duty is necessary because the price varies so much. Hearings : Page 4042. Witness: The American Brush Manufacturers' Association. (Brief.) Rates suggested. The duty on raw bristles should be made as low as possible to properly take care of the actual expenses incurred by the Government in handling this particular item. DIGEST OF TAKIFF HEARINGS, H. R. 7456. 459 If a duty on bristles is required for revenue purposes, providing the increase in the tariff on manufactured brushes is granted, the present 7 cents per pound specific duty on bristles (sorted, bunched, or prepared) can be continued. (Note. The present tariff act ad- mits " bristles, crude, not sorted, bunched, or prepared " free of duty.) PARAGRAPH 1409. BUTTON FORMS OF LASTING, ETC. WITNESS. REQUESTING RECLASSIFICATION : The Joseph W. Schloss Co., New York City. (Brief; no appearance at hearings. ) Crochet forms should be specifically mentioned in paragraph 1409, as the question has been raised whether the language is sufficiently broad to include this article. It is suggested that there be inserted after "other material" the words "crocheted, woven, or made." PARAGRAPH 1410. BUTTONS, VEGETABLE IVORY AND PEARL. WITNESSES, AND INTERESTS BEPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES: Mr. R. C. Laub, representing the vegetable-ivory button industry. (Brief.) Mr. Theodore G. Robinson, representing the Ocean Pearl Button Manufac- turers' Association, the Mother-of-Pearl Industry Association, and 15 other manufacturers not meinbers of either association. (Brief.) FAVORING LOWER DUTIES : Mr. Frank J. Appelbee, representing Appelbee & Neuman (Inc.), New York City. Hearings : Pages 4053-4060. Witness : Mr. R. C. Laub, representing the vegetable-ivory button industry. (Brief.) Comparability. German and Austrian prices received by cable August 11, 1912 : Plain colors and black (carded and boxed). Sizes : Per gross. 24-line 1 _________________________________________________________ $0. 40$ 30-line * _________________________________________________________ . 67* 36-line ' _________________________________________________________ 1. 08 40-line ' _________________________________________________________ 1. 44 45-line 1 _________________________________________________________ 1. 80 50-lin.e * __________________________________________________________ 2. 88 These transpositions were made at $0.125 per mark, the rate of ex- change at time of quotation. At the present rate of exchange ($0.004 to the mark) the German and Austrian prices would figure about as below, assuming no ad- vance in mark prices: Sizes : 24-line ___________________________________________________________ $0.13 30-line ___________________________________________________________ .22 36-line ___________________________________________________________ .35 40-line ____________________________________________________________ .46 45-line _________________________ ----------------------------------- .58 50-line _________ _____________ .92 >A " line " is equal to one-fortieth of an inch. 460 DIGEST OF TARIFF HEARINGS, H. R. 7456. The witness understands, however, that they have advanced about 15 per cent, a negligible factor when considered in dollars. The latest Italian prices are as follows : A. Best quality Italian goods, carded and boxed, polislied solid colors. 1 Sizes : Per gross. 24-line $0.31 30-line .47 36-line . 75 40-line .91 45-line 1. 25 50-line . 2. 26 B. Medium quality Italian goods, carded and boxed, polished solid colors. 1 Sizes : Per gross. 24-line $0. 31 30-line .47 36-line .67 45-line 1.10 50-line 1. 69 Some Italian manufacturers have already established agents in this country who are quoting the above prices in New York and else- where. These prices compared to present domestic average prices for similar classes of goods, namely : I}. Medium and cheaper quality carded buttons against which Italian buttons will compete. Sizes : 24-line Per gross. Solid colors $1. 25 Blacks 1. 00 30-line Solid colors 1. 50 Blacks 1. 25 36-line Solid colors 1. 80 Blacks 1. 60 40-line Solid colors 3. 75 Blacks 3. 25 45-line Solid colors 6. 00 Blacks 5. 00' 50-line Solid colors 9. 00 Blacks 8. 00 A. Fine quality carded buttons, against which German and Austrian buttons will compete. 24-line Per gross. Solid colors $1. 8O Blacks 1. 40 30-line Solid colors 2. 25 Blacks 1. 75 36-line Solid colors 4. 10 Blacks 3. 15 40-line Solid colors 5. 30 Blacks * 4. 15 5 per cent less for blacks. DIGEST OF TARIFF HEARINGS, H. R. 7456. 461 Sizes Continued. 45-line Per gross. Solid colors $7. 25 Blacks 6. 00 50-line Solid colors 12. 30 Blacks - 9. 90 The labor cost in the manufacture of vegetable-ivory buttons is the largest single item in their manufacture; average costs, made up of 75 per cent labor and overhead as against 25 per cent for mate- rials. The wages paid in the button industry in Germany are gen r erally somewhat lower than those paid in larger industries. Comparative wages per day of eight hours. 1 Operation. Germany. Italy. United States. Marks. Equiv- alent. Lire. Equiv- alent. Turners 56 57 57 55 34 34 100 $0.70 .71 .71 .69 .42 .42 1.25 9 11 9 9 5 5 25 $0.36 .44 .36 .36 .20 .20 1.20 $5.12 5.45 6.25 6.35 2.50 2.50 9.50 Dyers Mechanics Hand workers Sorters (female) Foremen Total 393 7.67 i For Germany the wages are the highest paid for work similar to the various operations in making buttons; for Italy the wages are those paid in the button industry. In a general way it can be said that a lot of buttons costing $100 to produce in the United States to-day can be produced in Germany for the equivalent of $43.77; a button that would cost $1 per gross here can be produced in Germany for the equivalent of $0.347 per gross. In the United States $100 worth of buttons equals 771.25 lire ($30.85) in Italy; a button that would cost $1 per gross here can be made in Italy for the equivalent of $0.308. Size of industry. Manufacturers of vegetable-ivory buttons in this country give employment to approximately 6,000 people under normal conditions. Outside of the United States the industry is centered largely in Germany, Austria, Italy, and Japan. Rates suggested. Buttons of vegetable ivory and of horn, finished or partly finished, 2 cents per line per gross and 50 per cent ad valo- rem. Vegetable-ivory blanks not drilled, dyed, or finished, 1J cents per line and 15 per cent ad valorem. Rates are based on the Ameri- can valuation. The classification should include horn buttons, as they compete directly with vegetable-ivory buttons. Remarks. The control of Tagua nuts was before the war and is again to-day very largely in the hands of European interests. The control of practically all commercial machinery used in the manu- facture of vegetable-ivory buttons is in German hands. An appendix to the brief gives a description of the process of manufacture, wages in various industries in Germany, and prices of commodities in Germany. 462 DIGEST OF TARIFF HEARINGS, H. R. 7456. Hearings : Pages 4061-4062. Witness: The Ocean Pearl Button Manufacturers' Association, the Mother-of-Pearl Industry Association, and 15 other manufac- turers not members of either association. (Brief.) Rates suggested. Buttons of pearl or shell, finished or partly fin- ished, 2^ cents per line per gross and 25 per cent ad valorem ; pearl or shell button blanks, not turned, faced, or drilled, 2 cents per line per gross and 25 per cent ad valorem. Remarks. The brief cites working conditions in Japan and calls attention to hearings before the Ways and Means Committee and to the report of the Tariff Commission on the button industry. Low as Japanese production costs are, buttons can be produced in Czecho- slovakia at practically half the Japanese cost. Hearings : Pages 4062-4064. Witness: Mr. Frank J. Appelbee, representing Appelbee & Neu- man (Inc.). Rates suggested (in a brief submitted by the witness). Paragraph 1410. Buttons of pearl or shell, finished or partly finished, 1 cent per line per gross; pearl or shell button blanks, not turned, faced, or drilled, one-half cent per line per gross. PARAGRAPH 1411. BUTTONS, AGATE AND N. s. p. r. WITNESSES, AND INTEBESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. M. B. Whittemore, representing the Morley Button Manufacturing Co., Portsmouth, N. H., and Boston, Mass. FAVORING LOWER DUTIES : Mr. Frank J. Appelbee, representing Appelbee & Neuman (Inc.), New York City. Hearings : Pages 4065-4068. Witness: Mr. M. B. Whittemore, representing the Morley Button Manufacturing Co., Portsmouth, N. H., and Boston, Mass. Costs and selling prices. Buttons are being imported, laid down here, at 25 cents per great gross. The identical button costs wit- ness's plant over 42 cents to produce. Labor cost in witness's plant is in excess of 50 per cent. Size of industry. The company's weekly pay roll, running about one-third capacity, was $3,800 early in December, 1921. Rates suggested. Forty-five per cent on American valuation on buttons not specially provided for. Remarks. Witness's plant manufactures buttons entirely of papier- mache and of fiber products (shoe and clothing buttons). Hearings : Pages 4062-4064. Witness: Mr. Frank J. Appelbee, representing Appelbee & Neu- man (Inc.). Rates suggested. Buttons commonly known as agate buttons, 15 per cent ad valorem; agate button blanks, molds, or parts of agate buttons, 10 per cent ad valorem; the rest of paragraph at the rate provided for in the bill. (Note. Paragraph 1411 provides for 15 per cent ad valorem on agate buttons and 38 per cent ad valorem on parts of agate buttons.) DIGEST OF TARIFF HEARINGS, H. R. 7456. 463 PARAGRAPH 1412. CORK. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Charles D. Armstrong, representing the Armstrong Cork Co., Pitts- burgh, Pa. FAVORING LOWER DUTIES : Mr. Junius H. Stone, representing his own interests, New York, N. Y. Spanish manufacturers and American importers. (A communication from the Spanish Embassy.) Hearings : Pages 4068-4075. Witness : Mr. Charles D. Armstrong, representing the Armstrong Cork Co. Costs and selling prices. The labor involved in making cork squares is about two-thirds of the total labor cost of the finished cork. Imports of the larger corks in 1918-1920 show an average foreign value of 75 cents per pound. Imports of small corks during 1919 and the first six months of 1920 show an average foreign invoice value of 83 cents per pound. The standard quality crown disk at prewar exchange is valued f. o. b. steamer foreign port at about 85 cents per pound. Imports of cork, artificial or cork substitutes, manufactured from cork waste or granulated cork and n. s. p. f. in 1919 were valued at an average of -66 cents per pound. The difference in cost of production in the United States and in Spain is due to three factors applying to Spain: (1) Lower cost of raw materials (all exports of bark are taxed 5 pesetas gold per 100 kilos by the Spanish Government) ; (2) lower overhead and fixed charges; (3) lower labor costs. Comparison of wages paid in the Armstrong factories located at Pittsburgh and Senile. Average rates per week. Average rates per week. Spain. United States. Spain. United States. Cork bark sorters Cork punchers Machine operatives $6.00 5.00 3.25 $30.00 30.00 15.00 Sorters of cork $3.25 4.50 3.50 $15.00 24.00 15.00 Common labor Boys Size of industry. The cork industry in the United States com- prises at least 20 companies with a probable invested capital of over $15,000,000. These factories employ more than 6,000 operatives. Rates suggested. The following changes are recommended; they restore substantially the rates prevailing under the tariff act of August 5, 1909: 1. Cork bark cut into squares, cubes, or quarters, 8 cents per pound. 2. (a) Manufactured cork stoppers over three- fourths of an inch in diameter, measured at the larger end, and (6) manufactured cork disks, wafers, or washers over three-sixteenths of an inch in thickness, 20 cents per pound. 3. (a) Manufactured cork stoppers three-fourths of an inch or less in diameter, measured at the larger end, and (Z>) manufactured cork disks, wafers, or washers 464 DIGEST OF TARIFF HEARINGS, H. R. 7456. three-sixteenths of an inch or less in thickness, 25 cents per "pound. 4. Cork, artificial or cork substitutes, manufactured from cork waste or granulated cork and n. o. p. f. in this section, 35 per cent ad valorem. 1 5. Cork insulation, wholly or in chief value of granu- lated cork in slabs, boards, planks, or molded forms, 35 per cent ad valorem. 1 6. Cork paper, 35 per cent ad valorem. 1 7. Manufac- tures wholly or in chief value of cork or of cork bark or of artificial cork or bark substitutes, granulated or ground cork, n. s. p. f., 35 per cent ad valorem. 1 Remarks. Cork disks were formerly manufactured in this coun- try in very large quantities, but it has been found more advantageous under the present and preceding tariffs to make them in Spain or Portugal and to import them in finished form. At the present time the cork composition industry is in the primary stage of development. Cork insulation is the most important item in the cork schedule. A considerable amount of cork paper used for cigarette tips was formerly manufactured in the United States, but the business dur- ing the last few years has drifted entirely to Europe. Hearings : Pages 4075-4085. Witness : Mr. Junius H. Stone, representing his own interests, New York City. Costs and selling prices. Labor costs before the war were $1.50 to $1.75 per 10-hour day; since then they have reached $4 per 8-hour day, and are now down to $3 per 8-hour day. Cost of labor in the United States is approximately 1 cents per square foot; in Spain it is about 0.7 cent per square foot; in United States it is about 25 per cent of the total cost of production; in Spain about 18 per cent. Wages in the United States have dropped 25 per cent from the peak; in Spain about 15 per cent. American labor is more efficient. Size of industry. The manufacture of cork insulation forms an important branch of the cork industry. Rates suggested. The witness is opposed to assessing duty on American valuation and to an ad valorem duty. He states that the specific duty is better for this item, and suggests three-fourths of 1 cent per pound, which is three times the existing rate. Remarks. The witness is interested only in cork insulation, wholly or in chief value of cork waste, granulated or ground cork, in slabs, boards, planks, or molded forms, on which the proposed 'duty is 25 per cent ad valorem. Cork board is standard insulation throughout the country for cold-storage plants, ice and ice-cream plants, refrigerator cars, etc., and should not be placed on the same basis as cork paper for cigarette tips, fishing-rod handles, and other similar articles, but on a basis with lumber, for which it is a sub- stitute. A comparatively small ice or cold-storage plant will take 100,000 to 250,000 board feet of this insulation, while in a single large plant in New York there is installed between 2,000,000 and 3,000,000 board feet. The duty suggested would afford ample protection "to American industry, produce the largest possible revenue, and protect American users of the product from unreasonably high prices. *Ad valorem rates recommended are based on foreign invoice or market values, as in the tariff of 1918, now in force. DIGEST OF TARIFF HEARINGS, H. R. 7456. 465 The domestic industry is so dominated by one company as to be a virtual monopoly, with competition only from foreign sources, and the proposed rates will prohibit any large imports of this material. Also, with an ad valorem rate, based on American valuation, this dominant company could cause importers to pay increased duties by artificially increasing the price throughout the country when shipments are received, and then drop back to the previous price when the duty has been assessed at the higher valuation. Spanish manufacturers and American importers, in a communica- tion addressed to the Spanish Embassy at Washington and transmit- ted to the Finance Committee by the Department of State : Costs and setting prices. Composition disks are made in the United States at a very low cost with modern machines by patented processes, so that no artificial disks are imported from Spain or other countries. The advantage derived by Spanish manufacturers from their cheaper labor is greatly offset by the considerably higher efficiency of the American workman, the lower cost of fuel, and the highly developed American machinery. Labor in the cork industry in Spain has advanced more than 100 per cent against prewar times, and it is not probable that wages can be reduced again. Prices for cork board before the war, when there was competition from Europe, were about 4 to 5 cents a square foot. Prices were raised during the war to 18 cents until imports from Spain brought the price back to about 7 cents, now ruling. Size of industry. Reliable figures give the consumption of cork board in the United States as 70,000,000 to 80,000,000 square feet a year. The manufacture of cork board in the United States is a practical monopoly, there being one dominating manufacturer, the Armstrong Cork Co., which manufactures approximately 60 to 70 per cent of the cork board used in the United States. Two other small concerns divide the remaining business between them, with the exception of about 7,000,000 square feet imported from Spain. Rates suggested. The only one way to be fair to the importer is to leave the duty on cork board a specific one. In the hearings be- fore the Committee on Ways and Means it was stated by one of the witnesses that a specific duty of three-fourths cent per pound will more than compensate the difference in labor, but he failed to take into consideration that the Spanish-made cork board must be sent in crates, the cost of which alone amounts to about one-half cent a square foot. The duty on cork disks, washers, or wafers should be maintained at the actual duty of 15 cents a pound. The duty on cork board and cork tile should be altered from one-fourth cent to three-fourths cent per pound. Remarks. The importation of bottle corks has considerably de- creased, owing to prohibition. A comparatively good business is still done in cork disks, of which only the very best grade is im- ported, the sale of the lower grades being rendered impossible through the high duty of 15 cents per pound weight. The importa- tion of high-grade disks is now on the decline, as artificial cork disks made out of cork waste have taken the place of the natural. The export duty on the raw material, cork bark, is a nominal one, having been recently reduced to only one-fourth cent per pound. 466 DIGEST OF TARIFF HEARINGS, H. R. 7456. PARAGRAPH 1414. DOLLS AND TOYS. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Alfred C. Gilbert, representing the Toy Manufacturers of the United States of America (Inc.). Mr. Robert H. McCready. (Brief.) Mr. W. H. Fulper, representing the Fulper Pottery Co., Flemington, N. Y. Hearings : Pages 4085-4094. Witness: Mr. Alfred C. Gilbert, representing the Toy Manufac- turers of the United States of America (Inc.). Costs and selling prices. An assortment of toys (exhibit) was sent from Germany with all charges paid for $1. The same set could not be reproduced here for $7.5. Air rifles, German-made (exhibits), retail in Germany for 18 marks,' 35 marks, and 100 marks. Trolley car (exhibit), German-made, bought at retail in New York for $2.45 ; in Chicago, for 97 cents. Trolley car, American- made, will retail at not less than $3. Tea set (exhibit), domestic price, $45 per gross; import price, $33 per gross. Trains, German-made, landed for $1.09, sold for $2.50 to $3. American make, comparable, sold for $2.75. Size of industry Firms making dolls in United States : 1913 14 1920 142 Doll manufacturers, 1920 134 Of whom only 12 are left to-day. Toy manufacturers : 1914 _ 290 1920 1,800 Employees, 1920 40, 000 The educational toy is a comparatively new industry, developed by American toy manufacturers. Comparability. Germans specialize a great deal in what is called the trashy type of toy. Americans specialize in what is called the educational toy. Rates suggested. A tariff of at least 70 per cent on foreign value or a corresponding rate, not less than 40 per cent, on American value. Remarks. A brief of Mr. Robert H. McCready, filed by the wit- ness (p. 4095), includes the following data on competitive conditions in Germany : Sonneberg district, where cheap toys are made, wages October 1, 1921 : Basic or minimum wage, per hour. Men 25 years of age, 9.15 marks; women 22 years of age, 4.50 marks. Percentages are added for increased age, up to 30 years; for each year of service up to 5 years ; also for married men or women who support some one besides themselves. Pieceworkers must be guaranteed 25 per cent above the basic wage. Nuremberg, metal and other toys of more expensive type: The October scale basic wage ranged from 7 to 9 marks an hour. Fore- men had a basic wage, August, 1921, of 1,850 marks a month ; superin- tendents, August, 1921, 2,100 marks a month. DIGEST OF TARIFF HEARINGS, H. R. 7456. 467 Hearings : Pages 4096-4098. Witness: Mr. W> H. Fulper, representing the Fulper Pottery Co., Flernington, N. Y. Costs and selling prices. Hand labor enters into the cost of pro- duction to the extent of 75 per cent. A brief submitted by the wit- ness gives the firm's wholesale price for doll heads as 316 per cent above the German. The firm's extreme price is 253 per cent higher than the German prices cited below. Prices of German samples. Their numbers. Wholesale price per dozen. Compares with our number. Our best wholesale price per dozen. Our ex- treme manufac- turers' price per dozen. 390/1 . . . $3.00 40 $9.00 $9 20 390/2. .. 3.60 11 25 9 00 390/5 5 50 2c 15 75 12 60 390/6 6.25 2b 20.25 16.20 390/8... 9.50 2a 27.00 21.60 Size of industi^y. The firm's maximum production of doll heads on March 12, 1920, amounted to 1,250 heads per day. None have been made since October, 1920. The firm has spent approximately $100,000 in making possible the manufacture of bisque doll heads in America. Comparability. The quality of American bisque doll heads is rec- ognized by experts as being at least equal to the best made. Other foreign makes are not in any way comparable in quality to the Ger- man heads, being inferior in finishing and decoration. Rates suggested. It is requested that the Treasury decision which permits bisque doll heads to come in under the paragraph on toys and parts of toys at a duty of 35 per cent instead of 55 per cent under paragraph 80 of the present law relating to Parian and bisque wares be set aside or that the rate in paragraph 1414, H. K. 7456, be made 55 per cent on American valuation. A rate of 40 per cent on Ameri- can valuation would not be sufficient. Dolls with bisque heads should have a protection of 55 per cent on American valuation. The following data are abstracted from a brief filed by the com- pany : Foreign-made bisque figures, statuettes, porcelain lamps, and simi- lar articles are offered in the American market for one-half the American cost of production. Cheap foreign labor is assisted by cheap money under present exchange conditions. The manufacture was begun in America about the middle of 1919, many thousands of heads being destroyed during the education period. Of 100 or more doll factories in 1920, there are now a bare half dozen, and not one bisque doll head is being produced, and this although America is the only country able to make doll heads equal in quality to the German. High ceramic ability and artistic skill are necessary to produce doll heads. 468 DIGEST OF TARIFF HEARINGS, H. R. 7456. The brief asserts that to make the foreign article in this class com- petitive with similar American-made articles, assessing duty on the foreign value, an ad valorem duty running into many hundreds per cent would be required, eventually acting as an embargo. PARAGRAPH 1415. ABRASIVES (CRUDE ARTIFICIAL ABRASIVES). WITNESSES AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES: Mr. Robert MacDonald, representing the General Abrasive Co., Niagara Falls, N. Y. FAVORING LOWER DUTIES : The Manufacturers' Association of Bridgeport, Conn. (Brief.) The Grinding Wheel Manufacturers' Association. (Brief.) Hearings : Pages 4098-4103. Witness : Mr. Robert MacDonald. Costs and selling prices. The European manufacturer can sell crude and artificial abrasives in this country for less than it costs to produce them here. The American manufacturer must pay twice as much for bauxite at the mines as the European manufacturer and in addition must pay more than twice as much for freight. Crude artificial abrasive from Switzerland in 1915 was sold for $56 a ton in New 1 ork. It is still marketed in this country. To produce a similar article here costs $75. Abrasive grains of another foreign manufacturer are offered at 6f cents per pound, LJ cents less than the American manufacturer can sell for. In 1920 the cost of manu- facturing crude artificial aluminous abrasive in Canada was $65 a ton, in the United States $75 a ton. About 65 per cent of* the cost is in making the crude abrasive, and 35 per cent in reducing it to the granular form. Size of industry. Output is estimated at $60,000,000 a year. Em- ployees number about 25,000. It is of recent development, having had its principal growth in the past 20 years. Abrasive products are necessary. in practically all mechanical industries. Comparability. European manufacturers have advantages of raw-material supply near point of manufacture, cheap power, and cheap labor. American manufacturers face long hauls for raw mate- rial, as the plants must be located where power is cheap. Domestic wages are higher without greater efficiency, as the labor is of the unskilled iclass. Rates suggested. Twenty per cent ad valorem on crude artificial abrasives. The rate of 5 per cent on crude artificial abrasives is too low to protect the American manufacturer. It is out of proportion to the rate of duty specified on emery and carborundum grains and on grinding wheels. Five per cent on the average cost of imported crude artificial abrasives amounts to about four-tenths of 1 cent per pound. A specific duty of $20 per short ton on abra'sive grains has been in effect under the Payne- Aldrich tariff bill. Abrasive grains are simply crude abrasive broken into granular form. Remarks. Three American manufacturers of grinding wheels have formed Canadian companies to manufacture crude artificial corundum in that country, the output being used principally by these three companies and not generally distributed among the DIGEST OF TARIFF HEARINGS, H. R. 1456. 469 grinding- wheel makers of the United States. They enjoy lower power and other costs in Canada. They are opposing any duty on crude artificial abrasives in the name of the Grinding Wheel Manu- facturers' Association, and appeared before the Ways and Means Committee for that purpose. The witness states that, as a matter of fact, the majority of the more important members of the Grinding Wheel Manufacturers' Association favor a reasonable tariff on crude artificial abrasives in order that a domestic supply of their raw mate- rial may be protected and developed. In France and Austria there are enormous deposits of high grade bauxite, the principal raw mate- rial. In this country bauxite is found in commercial quantities only in Arkansas and Georgia. A duty on the crude artificial abrasives would not result in in- creased prices, but would merely help place the American manufac- turer more nearly on an equality with his European competitor. A duty would not unjustly affect^the Canadian plants of these com- panies, as they enjoy lower power and other costs. Witness: The Manufacturers' Association of Bridgeport, Conn. (Brief; no appearance at hearings.) Rates suggested. Crude artificial abrasives should remain on the free list. Remarks. Bauxite, mined, crushed, and calcined in Arkansas, is shipped to the Canadian side of Niagara Falls, where it is reduced to crude artificial abrasive by electric furnaces, which are in fact departments of large American industries. Manufacturers and users of abrasive grains would be forced to bear the burden, directly or indirectly, if crude artificial abrasives were removed from the free list. Approximately 75 per cent of the crude artificial abra- sives used in the United States are made in Canada from American materials and with American capital. The location of electric fur- naces on the Canadian side of Niagara Falls was a war necessity rather than a manufacturers' choice. Fully ten times more labor is required in manufacturing abrasive grains in the refining plants located in the United States than is employed in the electric furnace departments in Canada. Both domestic and foreign trade would be inj ured by the proposed tariff. Witness : The Grinding Wheel Manufacturers' Association. (Brief; no appearance at hearings.) Size of industry. The grinding-wheel industry of the United States comprises 27 plants, whose manufactured products in 1920 amounted to over $28,000,000. The principal raw material is crude artificial abrasive. It can be economically produced only where cheap electric power is obtainable in large quantity. It was impos- sible, during the war, to increase electric furnace production at Niagara Falls, N. Y.. or elsewhere in the United States, to meet the demands of munition manufacturers in the grinding of guns, shells, airplane and automobile parts, railroad equipment, etc. The Ameri- can* abrasive manufacturers were therefore obliged to expand their electric furnace departments on the Canadian side, where there was a surplus of electric power. Rates suggested. The only suggestion for a tariff comes from a single manufacturer of abrasives whose output represents less than 5 per cent of the total used in the industry. The other 95 per cent, 7713422 31 470 DIGEST OF TARIFF HEARINGS, H. R. 7456. together with the 27 manufacturers of grinding wheels and the 9 manufacturers of abrasive paper and cloth, are unanimous in sup- porting the petition that the raw materials of this industry should not be taxed unless all raw materials are to be taxed for revenue purposes. PARAGRAPH 1415. ABRASIVE PAPERS AND CLOTHS. WITNESSES. FAVORING PROPOSED OR HIGHER DUTIES : The American Glue Co. and others. (Brief; no appearance ftt hearings.) Rates suggested. The only specific mention of abrasive paper in previous tariff bills was in the act of 1913, which made emery paper dutiable at 20 per cent; this is only one of 10 to 15 kinds of surface- coated abrasive papers and cloths. The following is a list of abra- sive papers and cloths manufactured in this country. Emery cloth, emery paper, flint cloth and flint paper, garnet cloth and garnet paper, flint, emery and garnet polishing paper, glass paper, artificial cloth and paper, i. e. cloth or paper coated with artificial abrasives, chalk flint cloth and paper, and crocus cloth. The foregoing enumerated abrasive surface coated papers and cloths should be dealt with as a unit and subjected to a duty of 25 per cent. A separate paragraph should be inserted as follows : All papers, cloths, or combinations of paper and cloth, wholly or partly coated, with artificial or natural abrasives, or a combination of natural or artificial abrasives, 25 per centum ad valorem. If the American valuation plan is not adopted, the rate of duty should be 35 per cent. Remarks. The Board of General Appraisers under the act of 1909 classified sandpaper as surface-coated paper and it has been, since that time, so classified and treated. The act of 1909, paragraph 411. imposed a duty of 5 cents per pound on " papers with coated surface or surfaces n. s. p. f . " ; the act of 1913, paragraph 324, a duty of 35 per cent; and H. R. 7456, paragraph 1305, a duty of 5 cents per pound. Abrasive cloths, since the tariff act of 1897, have been classified as " manufactures of cotton or of which cotton is the component material of chief value, n. s. p. f ." The act of 1909, paragraph 332. imposed a duty of 45 per cent on " manufactures of cotton or of which cotton is the component ma- terial of chief value " ; the act of 1913, paragraph 266, a duty of 30 per cent ; and H. R. 7456, paragraph 920, a duty of 28 per cent. PARAGRAPH 1417. MATCHES. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Fred Fear, representing the Match Manufacturers' Traffic Bureau, New York City. FAVORING LOWER DUTIES : The Vulcan Match Co. (Inc.) r New York City. (Brief.) Hearings : Pages 4106-4112. Witness : Mr. Fred Fear. Costs and selling prices. During the war period matches were imported and sold here as low as 25 cents per gross of 144 boxes, duty DIGEST OF TARIFF HEARINGS, H. R. 7456. 471 paid. To-day's price for the same matches is $1 per gross. The wit- ness had been informed that these same matches are selling in Sweden, although manufactured there, at $1.40 per gross. Size of industry. Capital $50.000,000; employees, about 12,000; production in 1920, 25.480,000 gross. During the past 20 years about 300 to 400 match companies have begun operations, but the actual number now in business does not exceed 20. Comparability. Comparative costs are difficult. Foreign matches are all packed in small boxes containing between 50 and 60 matches, whereas American matches are packed in large boxes containing 400 to 500 matches; nor are foreign manufacturers able to produce a satisfactory American-type match. However, because of cheap labor and raw materials it is possible for foreign matches to be imported and to undersell domestic matches. Foreign manufacturers could lay down matches here to-day for 15 cents per gross of 144 boxes. The same number of American-type matches would cost to produce here TO to 90 cents. Although foreign matehes could be laid down at 15 cents it is not being done, as the foreign manufacturer is get- ting larger profits and selling them for 50 to 75 cents with the help of the present low tariff. Rates suggested. Twenty-five cents per gross boxes on boxes con- taining 100 matches or less, and 3 cents per thousand matches on boxes containing over 100 matches. Remarks. The witness states that increased rates are necessary in the interests of the smaller companies which he represents; that the large company, the Diamond Match Co., would not be affected by any change in tariff, because, with its foreign connections and domestic facilities, it could either import matches or manufacture them here. An increased duty would help the smaller companies, but would not increase the cost to the consumer, nor would it result in the withdrawal of the 1-cent box of matches. It would also result in larger revenue to the Government. The American companies are now all making a high-grade stand- ard match, a product developed by scientific research and practical experience. It has been designed to conform to all fire-prevention laws, is the safest match in the world from a fire-hazard standpoint, and since 1913 all domestic matehes have been of nonpoisonous materials. Competition is feared chiefly from the Scandinavian countries and Japan. Sweden is a match-making country, its association with Ger- many insuring an ample supply of potash and nearness to Russia affords a supply of suitable timber. Japan has very cheap labor, is able to dra\v on eastern Russia for timber, and is herself a producer of potash. Witness: The Vulcan Match Co. (Inc.). New York. (Brief; no appearance at hearings.) Costs and selling prices. The price of Swedish matches in Sweden and in the United States is relatively the same according to freight, etc.. expenses involved, no advantage in price being ob- tained in either country. *iz<- of industry. Statistics -show that during the last 10 years the largest yearly importation of Swedish safety matches into the United 472 DIGEST OF TARIFF HEARINGS, H. R. 7456. States amounted to less than $2,000,000, while during the same single year domestic manufacturers produced matches to the value of $23,000,000. Comparability. The Swedish safety match is not in competition with the usual so-called American "strike-anywhere safety match," which is packed in large boxes containing 400 to 500 sticks. The Swedish match is packed 60 sticks to the box. Remarks. The Swedish safety match is used in a limited field in the United States, being principally adopted by smokers and persons compelled to carry small quantities of matches about their persons. For years, and at the present time, the raw materials, consisting of chemicals, glue and paraffine wax, have practically all been imported from the United States by Swedish manufacturers. PARAGRAPH 1418. BLASTING CAPS. WITNESSES. FAVORING PROPOSED OR HIGHER DUTIES : The Atlas Powder Co., Wilmington, Del. (Brief.) The California Cap Co. (Brief.) Witness: The Atlas Powder Co., Wilmington, Del. (Brief; no ap- pearance at hearings.) Hates suggested. The duty on quicksilver has been increased in H. R. 7456 to 35 cents per pound. Fulminate of mercury, a product of quicksilver, is on the free list, paragraph 1516. Theoretically, 1 pound of quicksilver gives a return of 1.42 of fulminate, but from a practical standpoint 1 pound of fulminate requires eight-tenths of a pound of quicksilver. The duty on quicksilver being 35 cents per pound, eight-tenths of this amount, or 28 cents, should apply to mer- cury detonators or blasting caps for each pound of fulminate of mercury. Two pounds of fulminate of mercury are required to manu- facture 1,000 detonators or blasting caps: the proposed duty on blast- ing caps should, therefore, be increased to the full extent of the in- crease on quicksilver by adding 56 cents per 1,000 to $2.25, making the base duty about $2.75 per 1,000. Witness: The California Cap Co. (Brief; no appearance at hear- ings.) Costs and selling prices. The standard 1-gram cap, known as No. 6 strength, is now selling throughout the United States at an average list price of $2.50 per 1,000 less than during the war. Prices of other grades have also been reduced in proportion to the weight of explosive charge. Quicksilver can be obtained to-day at around $60 per 75-pound flask less than it could be bought for during the war. Hates suggested. If the proposed advance in duty on quicksilver is retained, fulminate of mercury, 73 per cent of which is quicksilver, should be taken from the free list and made dutiable at seventy-three one-hundredths of 1 cent for each 1 cent advance in the rate of duty on quicksilver, or 0.73X(35 cents, the proposed rate. 7 cents, the equivalent specific duty of 10 per cent ad valorem in the 1913 act)r= 0.73X28=r20.4 cents. For blasting caps containing not more than 1-gram charge the duty per 1,000 caps should be increased 1.37 cents DIGEST OF TARIFF HEARINGS, H. R. 7456. 473 for each 1 cent advance in the duty on quicksilver, and for blasting caps containing more than 1-gram charge the duty per 1,000 caps should be increased sixty-eight one-hundredths cent for each addi- tional |-gram charge for each 1 cent advance in the duty on quick- silver. Remarks. There are 1.37 pounds of quicksilver in 1,000 1-gram blasting caps. Much more quicksilver is consumed in the manufac- ture of fulminate of mercury than in any other industry in which the metal is used. It is estimated that over 70 per cent of the quick- silver consumed in the United States goes into the manufacture of fulminate of mercury for blasting caps and ammunition. The ful- minate is the principal explosive ingredient to the extent of 80 per cent, both in blasting cap's for miners' use and in percussion caps for ammunition. To make 1,000 No. 6 caps requires 2.78 pounds of copper and 1.38 galjons of alcohol. PARAGRAPH 1418. MINING, BLASTING, OR SAFETY FUSES. WITNESSES. FAVORING LOWER DUTIES : The Sterling Hardware Co. and the Sterling Mine Supply & Manufacturing Co. (Joint brief; no appearance at hearings.) Rates suggested. It is stated that a reduction of 50 per cent of the proposed duty would still protect the American manufacturer of fuses. Remarks. There is only one manufacturer of mining, blasting, or safety fuses in the United States, the Ensign-Bickford Co.. Simsbury, Conn.; it has patented the necessary machinery for the manufacture of the fuse in question. PARAGRAPH 1419. NATURAL LEAVES. SHRUBS, PLANTS, HERPS, TREES, * * * CHEMICALLY TREATED, COLORED, DYED, OR PAINTED, N. S. P. F. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Hon. Andrew ,T. Hickey. M. C., eighteenth Indiana district, repre-entin.fr the Ove Gnatt Co. (Inc.), LaPorte, Ind., manufacturers of prepared foliage. Hearings: Pages 4112-4115. ("oste and selling prices. Wage? here are five to ten times higher than in foreign countries. Domestic manufacturers are under large transportation expense, both inland and ocean, for raw material. Many of the plants used are natives of the Old World. Imports are now being made at prices much lower than the domestic cost of pro- duction ; in the case of oak, beech, and ruscus leaves, imported from Germany and Italy, 50 per cent to 75 per cent lower. Size of industry. The industry in this country is new. having been started by Mr. Gnatt in 1913. At present more than 2,000 employees are directly dependent on it, while many others are indirectly bene- fited. The annual consumption of the more important classes ap- proximates as follows: Oak leaves. 400,000 pounds; beech leaves, 150,000 pounds; cycas leaves (palm leaf from Japan and Formosa). 474 DIGEST OF TARIFF HEARINGS, H. R. 7456. 3.000,000 leaves: lycopodium, or ground pine, 500,000 pounds; ruscus (native to Italy. Switzerland, and France), 400,000 pounds; magnolia leaves. 1,000.000 pounds. Comparability. The domestic industry can successfully meet the demands, and did so during the war. when no imports were received. Kates suggested. Sixty per cent to TO per cent ad valorem on American valuation. Remarks. These articles were not specifically provided for in the 1913 tariff, but were held dutiable under paragraph 347 at 60 per cent ad valorem. Prepared foliage is used chiefly for funeral purposes, Christmas foliage, baskets, and novelties. PARAGRAPH 1419. PLUMAGE. WITNESS, AND INTEREST REPRESENTED. FAVORING RESTRICTIONS ON THE IMPORTATION OF CERTAIN PLUMAGE : Mr. Frederick M. Czaki. representing the Millinery Chamber of Commerce of the United States, New York City. Hearings: Pages 4125-4131. Remarks. The brief is in support of the amendment adding birds of paradise to the class of plumage, the importation of which is pro- hibited, and which shifts the burden of proof of lawful possession to the possessor of prohibited plumage in seizure or forfeiture pro- ceedings. PARAGRAPH 1419. FEATHERS AND ARTIFICIAL FLOWERS. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES: Mr. Jacob de JOIILC. representing the Association of Flower and Feather Manufacturers of America, New York City. FAVORING LOWER DUTIES : Mr. Samuel Zucker, representing importers of artificial flowers and feathers, New York City. Hearings : Pages 4123-4125. Witness: Mr. Jacob de Jong, representing the Association rf Flower and Feather Manufacturers of America. Xew York City. Costs and selling prices. Mr. de Jong exhibited a number of for- eign-made articles showing the foreign price and the name of the manufacturer. Comparability. The witness claimed that the samples exhibited by Mr. Zucker (as below ) were not articles of general importation. Hearings: Pages 411o U23. Witness: .Mr. Samuel Zucker. representing importers of artificial flowers and feathers. Xew York City. Costs and selling prices. The witness left with the committee a number of exhibits showing foreign ccst. landing price, and condi- tions under which the goods were bought. Attention was called to one exhibit, costing $9 a dozen to lay down, which was copied by a domestic manufacturer and sold for $5.25. Take, again, an article costing $4 a dozen in Germany, with a 60 per cent duty ($2.40) plus landing charges (60 cents)", total, $7 a DIGEST OF TARIFF HEARINGS, H. R. 7456. 475 dozen. The selling price of $10.50 a dozen, less customary discount, makes $9.66 a dozen net. Under the suggested American valuation plan, it is claimed that a duty of $7.50 would have to be paid, plus landing charges (60 cents), making the total cost $12.10 net; the selling price would be $15, less discount, or $13.80 net. The Germans have had about four advances in wages; the minute the mark decreases the German raises his prices. Comparability. Merchandise that can be imported profitably in large quantities in competition with that of domestic manufacturers must be largely confined to such articles as forget-me-nots, lilacs, lilies, small fruits, etc. The larger flowers, such as roses, poppies, Camellias, gardenias, etc., are more likely to be of domestic manu- facture. What is made in this country can not be imported at any- thing near the home price; what is imported can not be made here at any price. Rates suggested. The present rate of 60 per cent based on foreign valuation should not exceed 15 per cent. Remarks. It was stated by the manufacturer who had copied the foreign article that it represented an extreme case. PARAGRAPH 1420. DRESSED, DYED, AND MANUFACTURED FURS. WITNESSES, AND INTERESTS BEPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Brief submitted by Messrs. Samuel Ullman and Edward Fillmore in behalf of the Board of Trade of the Fur Industry of the city of New York, composed of the Fur Merchants' Association, Fur Dressers and Fur Dyers' Association, and the Associated Fur Manufacturers (Inc.), and other associations. FAVORING LOWER DUTIES: Mr. H. L. Allen, attorney, representing the Furriers' Association of France, the Professional Union of Tanners and Dyers of France and Belgium, and the Belgian Union of Fur Cutters. Hearings : Pages 4131-4135. Witness : Brief submitted by Messrs. Samuel Ullman and Edward Fillmore in behalf of the Board of Trade of the Fur Industry of the city of Xew York, and other associations. Rates suggested. If the American valuation plan is adopted, the rates provided for in the proposed bill would amply protect the American manufacturer. In case the American valuation plan is not adopted, the rates should be increased proportionately in order that the American manufacturer may receive the proper protection against European competition. Remarks. ^Reference is made to a brief filed with the Ways and Means Committee, in which more detailed facts are given. Hearings : Pages 4135-4143. Witness : Mr. H. L. Allen, attorney, New York City, representing the Furriers' Association of France, the Professional Union of Tan- ners and Dyers of France and Belgium, and the Belgian Union of Fur Cutters. Costs and selling prices. While a difference in wages does exist, it is not as great as before the war, and the output of the European workman is far below that of the American. The actual labor cost is not known. 476 DIGEST OF TARIFF HEARINGS, H. R. 7456. Size of industry. According to statistics given before the House committee, the value of rabbit skins dyed in the United States in 1920 was $203,095, while the value of all kinds of furs dyed during the same year was $52,910,589. Comparability. No rabbit skins are produced in the United States suitable for the manufacture of imitation furs or for the produc- tion of hatters' furs. Rates suggested. On paragraph 1420 : Pelts of rabbits dressed on the skin, but not advanced farther than dyeing, 15 per cent ad va- lorem. Rabbit skins now included with rare furs to be subject to a special classification. On paragraph 1421 : Hatters' furs, including fur skins, carroted, 10 per cent ad valorem. PARAGRAPH 1421. HATTERS' FUR. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Aaroix Naumburg, representing the hatters' fur industry of the United States. FAVORING LOWER DUTIES : Mr. H. L. Allen, attorney, representing the Furriers' Association of France, the Professional Union of Tanners and Dyers of France and Belgium, and the Belgian Union of Fur Cutters. Hearings : Pages 4143-4145. Witness : Mr. Aaron Xaumburg, representing the hatters' fur in- dustry of the United States. Costs and selling prices. The total amount of hatters' fur going into a finished hat represents less than 10 per cent of its selling price in -the store. Size of industry. The IT firms presenting the brief filed by the witness represent fully 75 per cent of all the manufacturers of hat- ters' fur in the country. Rates suggested. A rate of 22 per cent ad valorem on the basis of American valuation or 35 per cent ad valorem on the foreign-value basis. These rates are based on the assumption that raw materials (rabbit skins) will remain on the free list. It was urged that the classification of hatters' fur as provided for in H. R. 7456 be retained, as it does not properly fit in with other furs. Remarks. All of the raw material (rabbit skins) is imported. The skins come almost exclusively from animals not indigenous to North American climates, nor has it been possible to breed the animals in this country and at the same time retain the commercial character- istics of the fur proper (fiber). The details concerning the industry were gone into extensively be- fore the Ways and Means Committee and can be found on pages 3295-3300, Part V, Hearings on General Tariff Revision, 1921. Hearings: Pages 4135-4143. Witness: Mr. H. L. Allen, attorney, representing the Furriers' Association of France, the Professional Union of Tanners and Dyers of France and Belgium, and the Belgian Union of Fur Cutters. (For digest of testimony, see par. 1420.) DIGEST OF TARIFF HEARINGS, H. R. 7456. 477 PARAGRAPHS 1424 AND 1426. HUMAN HAIR AND HAIR PRESS CLOTH. WITNESS, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DITTIES : Mr. Charles C. Tompkins, representing .1. T. Perking Co. (Inc.), Brooklyn, N. Y. ; the Sugden Press Bagging Co. ; and the Oriental Textile Mills. Hearings: Pages 4145-4148. Size of industry. The companies filing brief have about $5,000,000 invested in plants. Rates suggested. Raw human hair to be given a rate on a parity with camel's hair. raw. (Par. 1101, camel's hair, raw, 7 cents per pound.) Human-hair press cloth to be given a duty of 50 per cent ad valorem. Remarks. The witness states that all human hair is imported, and that practically all of it is used in the manufacture of hair press cloth. This hair press cloth is the principal competitor of camel's- hair press cloth, and the hair should, therefore, be given a duty that would place it on a parity with the camel's hair. Such a duty on raw human hair would also justify and require a compensatory duty on hair press cloth of 50 per cent ad valorem. The companies represented by the witness are manufacturers of camel's-hair press cloth, and two of them also manufacture human- hair press cloth. PARAGRAPH 1427. FUR FELT HATS. WITNESSES, AND INTERESTS REPRESENTED. FAVORING LOWER DUTIES : Mr. Edward W. Bill, representing Bill & Cnldwell and William C. Hesse, wholesale importers. (Brief.) Mr. Win. V. Campbell, chairman National Association of Fur and Wool Felt Manufacturers. (Brief. ) Hearings: Pages 4148-4153. Witness: Mr. Edward W. Bill. (Brief.) Costs and selling prices. Costs of hats sinre 1913 have advanced much faster in England than in the United States. An English manufacturer states, in a cable: "To-day's prices 160 per cent over 1913 " ; another states, " Price of 6142 is 200 per cent higher than October, 1913." The price to-day of domestic-made hats shows no such advance since the enactment of the tariff of 1913. One notable domestic hat shows to-day an advance of only 80 per cent over the price of 1913. Another well-known make shows an advance at to-day's price of not more than 33 to 40 per cent since 1913. An Italian manufacturer cabled regarding a representative hat in his line : " Price is 105 per cent higher than October, 1913, on gold basis." The advance on hats from Czechoslovakia runs from 75 to 100 per cent, gold basis. Foreign advances are even more, because of the very large increase in the cost of packing and expenses to land the goods in America. The cost of packing, cases, and cartons is not included in the cost 478 DIGEST OF TARIFF HEARINGS, H. R. 74-56. price of imported hats, as is the custom on domestic merchandise. In practice, it costs $6 to cover expenses and to land in New York one dozen hats from Italy or Czechoslovakia. The witness believes that questions of exchange are not to be con- sidered in this connection. To show that no advantage has been gained because of exchange depreciation, the following cables were cited : " October. 1913. French hat cost in France T.50 francs, exchange at par equals $1.45. "October, 1921. The identical hat cost in France 39.50 francs: exchange at 7.50 cents equals $2.96." Every hat bought abroad must be bought in American dollars. Peschel A*elours, 1913, quality L, 87 kronen (20 cents to a krone) equals $17.40 gold basis. Peschel velours to-day, quality L. $30. One domestic maker seems to have put a value of $18 a dozen on his name, another $9 a dozen. Knox advertisement sent out Septem- ber, 1921 : "Knox, extra quality, $58.50 lined. Also make this with mer- chant's name only, lined, $40.50." Stetson's price list : Fall 1921 select $51, chamois, $48. "The chamois quality, which does not contain the Stetson name, has been reinstated in stiff and soft hats at $48 per dozen. Size of industry. Ratios of imports to domestic production : Per cent. 1904 0. 32 1909 1 . 81 1914 1. 23 1919 ___ .58 Value of production in the United States : 1914 $37, 000, 000 1919 82. 745. 000 1920 (estimated) 100,000,000 Imports 1, 159. 000 Exports 3, 145, 000 Comparability. The claim had been made by manufacturers that the wording of the schedule was necessary to cover the higher-priced hats, velours, which are imported in large part from Czechoslovakia. It is pointed out, in reply, that the domestic manufacturers say the higher-priced hats are not made in this country to any great extent, at least the very fine hats of Austria. There are not and never have been any points of comparison be- tween a domestic hat and a foreign hat. They are entirely dissimi- lar, as the present duty effectually prevents the sale of foreign hats on a competitive basis. Rates suggested. Rate not to exceed 45 per cent, based on foreign valuation. A compound duty on fur- felt hats is entirely unworkable. The straight ad valorem method of assessment is easy of adminis- tration. Xo man, no matter how expert he may be, except the man who actually makes the hat. can accurately judge the value. Some of them can not tell within $6 a dozen; others say within $3 a dozen. An examiner in the appraisers' stores will be called upon to say whether a certain importation is worth $35.90 or $36.10 per dozen. This means a difference of $3 in the duty under the bill. DIGEST OF TARIFF HEARINGS, H. R. 7456. 479 Hearings : Pages 4153-4154. Witness: Mr. William V. Campbell, chairman National Associa- tion of Fur and Wool Felt Hat Manufacturers. (Brief.) The company regards it as essential to oppose a suggested tariff duty upon raw skins, imported for the sole purpose of cutting hat- ters' fur, and a cognate proposal to reduce the duty on cut fur. Hat- ters' cut fur needs all the protection that has been asked for, as the entire cost of transformation is one of labor. The brief points to the keen competition from Italy, Austria. Czechoslovakia, France, and England, and to the advantages enjoyed by those countries in regard to raw material. The company is in favor of American valuation of imports. PARAGRAPH 1428. JEWELRY. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : The New England Marmfacturering Jewelers' and Silversmiths' Association. (Brief.) FAVORING LOWER DUTIES : Mr. David J. Gallert, representing novelty jewelers, New .York City. Hearings : Pages 4154-4156. Witness : Brief of the New England Manufacturing Jewelers' and Silversmiths' Association. (Brief.) Costs cmd selling jyrices 1 eSSbtt. Description. Where made. Unit. Actual cost of produc- tion. Laid down in U.S.,duty paid. i No.25a.. White stone bar pin Rhode Island Gross. . $34.00 No. 25b do do $13.60 No. 2f>a. . White blue stone bar pin No. 2(ib do Rhode Island Czechoslovakia. . . ...do ...do 58.00 18.66 do do 5.23 do do 5.00 Each 3 30 No. 29b Foreign copv of No. 29a . do 1.78 No.39a.. Imitation ivorv and enamel cigarette holder. No.39b.. Oigasette holder of genuine ivory and Rhode Island Germany Dozen... ...do 41.12 24.00 i enamel . No. 31a. .' Sterling silver, enamel pencil, gold plated: No.31b.. Sterling silver, enamel pencil, better than No.Sla. Rhode Island Germany ...do ...do 42.67 ""i2."72 A very large percentage of the total cost of American production is labor. The figures given in the case of the American articles are the bare cost of production ; in the case of the imported articles they are the actual prices at which such imported articles are sold in the American wholesale market. Kates suggested. To retain unaltered the wording or classification of the jewelry paragraph No. 1428, H. R. 7456. Rates of 55 and 45 per cent ad valorem, appearing in paragraph 1428, to be respectively changed to 60 and 50 per cent ad valorem, based on American valuation. 480 DIGEST OF TARIFF HEARINGS, H. R. 7456. If the foreign wholesale market value is made the basis, then rates respectively equivalent to 60 and 50 per cent on American valuation. Per cent ad valorem. Jewelry, valued above 20 cents per dozen pieces 60 Rope, curb, etc., valued above 30 cents per yard CO Articles valued above 20 cents per dozen pieces, etc GO Stampings, etc 50 Remarks. See Tariff Information, 1921. Hearings on General Tariff Revision before the Committee on Ways and Means, Part V. vpages 3327-3331. Imitation precious stones, both white and colored, are not manufactured in this country. They are used by manufac- turers of jewelry. The rates have been raised from 20 per cent on foreign valuation in former tariff acts to 45 per cent American valuation in paragraph 1249, H. R. 7456. being equivalent to an in- crease of 125 per cent in the rate of duty on raw material in the form of imitation stones. This, the brief contends, would greatly increase the difficulties of American manufacturers in meeting the competition of countries with long and hereditary experience in the production of imitation precious stones, neither made, nor capable of being made, in the United States. Hearings : Pages 4013-4023. Witness : Mr. David J. Gallert, representing novelty jewelers. Size of industry. The domestic production of jewelry in 1914 was a trifle over $81,000,000. In 1919 this had increased to $203.898,000. On the other hand, imports for 1910 averaged about $1.000.000, and exports slightly inside that. Manufacturers import the design in small quantities and put them on the road. Importation is practi- cally only for the novelty of design and ideas. The imports are chiefly small articles pins and brooches. Mr. Rosenberger. a manu- facturer, of Providence, R. L. appealed to by the witness, stated that he thought articles imported for design were in the minority, but the question is difficult. Rates suggested. The rate to be reduced from 55 to 25 per cent ad valorem. Mr. Rosenberger stated that he was not asking for anything lower than 60 per cent on American valuation, but that 85 per cent o-n foreign valuation would handicap his importing branch to a cer- tain extent, and that his manufacturing branch would be hampered by not getting the ideas and designs from Europe. PARAGRAPH 1429. DIAMONDS AND OTHER PRECIOUS STONES. WITNESS, AND INTEREST REPRESENTED. FAVORING LOWER DUTIES : Mr. il. G. Monroe, representing the American Jewelers' Protective Associa- tion, New York. Hearings : Pages 4157-4161. Rates suggested. Rough precious stones, free; cut diamonds and other precious stones, and pearls. 10 per cent ad valorem. Remarks. The association, which includes all the prominent im- porters of diamonds and precious stones and cutters of diamonds in the United States, believes that the adoption of the duty recommended DIGEST OF TARIFF HEARINGS, H. R. 7456. 481 would automatically lower the value of their stock on hand by 10 per cent. They desire such reduction, however, in order that the 'tempta- tion to smuggle precious stones may be lessened. Smuggling in precious stones is easily and successfully carried on, and honest im- porters can not compete with smuggled merchandise. The witness recommends that the " appropriation for the preven- tion of fraud against the customs," at the disposal of the Treasury Department, be so increased as to enable the Secretary of the Treas- ury to employ a special squad of six men whose efforts shall be con- fined to the detection of fraudulent importations of precious stones. He also requests that the paragraph providing for the free entry of personal effects of nonresidents (par. 1678) be so changed as to pre- vent the importation by such persons of precious stones. Any amount of personal effect's may now be brought in by such persons, provided they are brought in without the intention of selling them, but there is nothing to prevent their selling them after entry without payment of duty. PARAGRAPH 1429; ALSO PARAGRAPH 350 or SCHEDULE 3, AND PARA- GRAPHS 1403, 1411, AND 1444 or SCHEDULE 14. IMITATION PRECIOUS AND SEMIPRECIOUS STONES. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. E. M. Johnson, representing American manufacturers of imitation pearls and fusible enamels, New York City. FAVORING LOWER DUTIES : Brief of importers of imitation precious stones or of precious and imita- tion precious stones. Hearings: Pages 4024-4027. Witness: Mr. E. M. Johnson, representing American manu- facturers of imitation pearls and fusible enamels, New York City. Coftfs and selling prices. (See pp. 3093-3098, part 5, Hearings before Ways and Means Committee. The products of the industry in this country are produced by skilled labor, receiving high wages. The labor cost is over 75 per cent of the total production cost. Abroad, the industry is what is known as a cottage industry and the products are largely the work of children. Size of industry. An industry 7 which the war really created. Production now amounts to a value of over $6,060,000 a year, in com- parison with a production of $500,000 in 1914. The industry employs about 5,000 workers. Rates suggested. No change in rates or phraseology of paragraphs 350. 1403, and 1411 of H. R. 7456 is desired, as the situation is covered and the rates seem to be just and equitable. If the system of as- sessment of ad valorem duties should be changed, it is required that the rates given in these paragraphs be so translated into other terms as to give the same amount of protection. Paragraph 1429 to read : Imitation precious stones, cut or faceted, imitation semiprecious stones, faceted, imitation half pearls and hollow or filled pearls of all shapes, with- out hole or with hole partly through only, 20 per cent ad valorem ; imitation precious stones, not cut or faceted, imitation semiprecious stones not faceted, imitation jet buttons, but polished or faceted; imitation solid pearls wholly or partly pierced, mounted or unmounted, 40 per cent ad valorem. 482 DIGEST OF TARIFF HEARINGS, H. R. 7456. Attention was called to the fact that articles which should have the protection of the same rate of duty have two different rates, 40 per cent in paragraph 1403 and 45 per cent in paragraph 1429. It was suggested that the rate in paragraph 1429 be made 40 per cent. Attention was also called to paragraph 1444 relating to rosaries. In the opinion of the witness any article which could be classed as a rosary would be entitled to come into this country by paying not more than 30 per cent. This would permit the importation of neck- laces made of imitation pearls and other imitation precious stones with a cross attached as rosaries, but after importation into the United States the cross could be removed and such articles offered for sale as regular necklaces. It was suggested that the classifies, tion of the Paj-ne-Aldrich law be followed or that paragraph 144-1 be amended to make rosaries composed of imitation pearls or imita- tion precious or semiprecious stones dutiable at the same rate as such items in paragraph 1403. Hearings: Pages 4161-4162. Witness : Importers of imitation precious stones or of precious and imitation precious stones, representing six firms located in Providence and Xew York City. (Brief.) Rates suggested The proposed rates of duty on diamonds and other precious stones, uncut ; pearls, not set or strung ; diamonds and other precious and semiprecious stones, cut but not set, and suitable for the use in the manufacture of jewelry, are concurred in. Imitation precious stones, cut or faceted, imitation semiprecious stone?, faceted, imitation half pearls and hollow or filled imitation pearls of all shapes without hole or with hole partly through only, 20 per cent ad valorem. Imitation precious stones, not cut or faceted, imitation semipre- cious stones not faceted, imitation jet buttons, cut, polished, or faceted, 45 per cent ad valorem. Imitation solid pearls wholly or partly pierced, mounted or un- mounted. 45 per cent ad valorem. Remarks. Imitation precious stones, imitation half pearls, and hollow and filled imitation pearls are not made in this country. They are a necessary raw material in the manufacture of jewelry. The solid or indestructible pearl is made in this county. PARAGRAPH 1430. EMBROIDERED LINENS. * WITNESS, AND INTEREST REPRESENTED. FAVORING LOWER DUTIES : Mr. W. A. McCleary, representing 46 linen importers and traders, all of whom, with one exception, are located in New York City. Hearings : Pages 3483-3485. Rates suggested. The present rate of 60 per cent ad valorem, in the act of 1913, to be maintained. (For a more complete abstract of the brief presented, see para- graph 1009.) DIGEST OF TARIFF HEARINGS, H. R. 74-56. 483 PARAGRAPHS 1430 AND 912 LACES AND EMBROIDERIES. WITNESSES. AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Albert L. Waitzfelder, representing the Braid Manufacturers' Asso- ciation. Mr. Charles A. Bihler, representing the United States Lace and Embroidery Manufacturers' Association and the American Shuttle Embroiderers Man- ufacturers' Association. Mr. Henry X. Berry, representing the Richmond Lace Works and the Lace Manufacturers' Association of New England. Mr. Thomas J. Diamond, representing American Bobbinett Co., the Brom- ley Manufacturing Co., and the Liberty Lace and Netting Works. Mr. Hugo N. Schloss, representing the Liberty Lace and Netting Works. Mr. H. A. Phillips, representing the American Lace Manufacturers' Asso- ciation. Mr. Joseph W. Stein, representing the Tariff Committee of American Cotton and Linen Handkerchief Manufacturers. The Narrow Fabric Co., Reading. Pa. (Brief.) The Oswald Lever Co. (Inc.), Philadelphia, Pa. (Brief.) FAVORING LOWER DUTIES : Mr. Lemuel J. France, representing the Lace and Embroidery Association of America.* Mr. David E. Schwab, representing himself. Mr. Max Neuberger, representing himself. Mr. Thomas M. Lane, representing manufacturers and importers of Ma- deira embroideries. Hearings: Pages 4162-4166. Witness : Mr. Albert L. Waitzfelder, representing the Braid Man- ufacturers' Association. Costs and prices. According to a report l of wages in a manufac- turing district in Germany the largest braid manufacturing dis- trict in the world the price paid for day labor is equivalent, at the present rate of exchange, to 3.1 cents per hour and for female labor to 2.3 cents per hour. In the United States the wages for similar labor are. for males 50 cents per hour and for females 35 cents per hour. The labor cost in these goods is about 61 per cent of the total cost. The average selling price in Germany of the samples submitted is equivalent to $3.42 per pound. The cost to make the same braids in the United States is approximately $8 per pound. On braids made from metal thread, the foreign cost is $1.54 per pound and the do- mestic cost $4.05 per pound. Foreign selling price of braids made from artificial silk. a Article No. Foreien selling price, per ligne. Weight per ligne. Foreign selling price, per pound. 3059 Cents. 31 Ounces. 1 40 3060 21 1 00 3 36 3061 52 2 63 3 18 3063 31 5 1 40 3 60 Total Average per pound 3.42 Research Report No. 40, National Industrial Conference Board, p. 701. 1 Samples filed with Ways and Means Committee 481 DIGEST OF TARIFF HEARINGS,, H. R. 7456. Domestic costs of braids made from artificial silk compared with landed cost of foreign braids. Domestic. Foreign. $2.75 $1.90 .45 .32 Cost of material, 1-pound braid 3.20 2.22 4.80 1.18 8 00 3 40 Domestic costs of braids made from metal threads compared imth landed cost of foreign braids. Cost of metal threads per pound (duty, 10 cents per pound) . 35 per cent on domestic value Landed cost per pound of metal thread 1 pound braid takes 1 J pounds metal thread Cost of material, 1-poand braid Cost of conversion Total cost per pound Domestic. Foreign. $0.80 .59 $0.80 .13 4.05 I One-fourth domestic. Difference $2.51 per pound. 35,000 in- Size of industry. There are employed approximately 35,' people in the industry, and about an equal number in subsidiary dustries. Kates suggested. That the rate on braids be changed from 45 per cent ad valorem to 60 per cent, based on American valuation. Remarks. It was stated that the industry is "working less than 50 per cent of its capacity. " Large orders are being placed by Ameri- can buyers in Germany because they are able to land goods at very much less than they can be purchased and sold for in this country." Hearings : Pages 4166^174. Witness: Mr. Charles A. Bihler, representing the United States Lace & Embroidery Manufacturers' Association and the American Shuttle Embroiderers Manufacturers' Association. Costs and selling price. The following table was submitted, show- ing the wages paid since November 1, 1921, and at present in the .United States, Germany, and Switzerland : [Mark- J cent. Franc- 19.3 cents.) United States, 47-hour week. Germany. 46-hour f week. >witzerlan we Skilled stitcher Watcher per week.. do $42.50-$50.00 17.00- 24.00 13.00- 14.50 23. 00- 25. 00 50. 00- 60. 00 Marks. 400-500 250-300 200 250-350 600-800 $2.00-$2.50 i 1.25- 1.50 i 1.00 ! 1.25- 1.75 j 3.00- 4.00 i Francs. 50 25 20 28 75 Shuttler do Mender .. .do.... do $9.fi5 4.^3 3.86 5.40 14.48 Size of industry. Located in 14 States. The witness, appearing in the interest of manufacturers of lace embroideries, gold and silver embroideries, embroideries and nets, etc., general dress novelties, stated that the production last year approximated $25,000,000 in value. DIGEST OF TARIFF HEARINGS, H. R. 7456. 485 Rates suggested. That embroideries be placed in the same classi- fication as laces, and that the duty be placed at 55 per cent ad va- lorem on the American valuation basis. On the foreign valuation the equivalent would be 115 per cent. Remarks. The witness stated that the industry is now 85 per cent idle, due chiefly to importations and not to general depression. Hearings : Pages 4185-4190. Witness: Mr. Henry N. Berry, representing the Richmond Lace Works and the Lace Manufacturers' Association of New England. Size of industry. The association comprises an investment of be- tween $2,000,000 and $3,000,000. Comparability. The witness cited several patterns manufactured by his company selling at $2.80, $4.10, $4.50, and $5.85, and stated that exactly identical patterns manufactured in Germany are being offered at $1.80, $2.15, $3, and $4, respectively, the unit in each case being the gross. These are, in each case, the prices to the whole- saler. Rates suggested. On laces at least 60 per cent on American valu- ation. The witness would regard the imposition of an equivalent foreign valuation, say 140 per cent, as not businesslike and as likely to entail manipulation of invoices. Remarks. The business is not running at full capacity now, due largely to import competition. The witness requests American valuation as the basis for the assessing of the duty, because with the equivalent rate on foreign valuation (130 or 140 per cent) the market would tend to be unset- tled, the goods coming from different foreign countries with differ- ent prices. With American valuation the duty would be uniform. The lace in which Mr. Berry is interested is that manufactured on the Lever go-through machine. Hearings : Pages 4205-4206. Witness: Mr. Thomas J. Diamond, representing the American Bobbinett Co., Newburgh, N. Y. ; the Bromley Manufacturing Co., Philadelphia, Pa. ; and the Liberty Lace and Netting Works, New York City. (Brief.) Comparability. Appended to the brief is a sample of 35-hole " Bretonne Net," made with 40's single yarn in the bobbin and 80's two-ply in the warp. The domestic cost to make is 25.10 cents per square yard. Profit and distribution require a selling price of 29.81 cents. "Similar nets can be imported from Nottingham, England, for 12.37 cents (exchange $3.60) and from Saxony, Germany, at about one-third of the English price. Rates suggested. Sixty per cent on American valuation, equiva- lent to 141 per cent on Nottingham value and about 400 per cent on German value. Remarks. It is necessary to import the yarn for the manufac- ture of these finer grade goods, as the finer yarns are not spun here. The yarns are dutiable and the revenue derived from them would equal that which would be obtained from importations of the fin- ished net. Hearings : Pages 4190-4199. Witness: Mr. Hugo N. JSchloss, representing the Liberty Lace & Netting Works, New York City. 77134_22 32 486 DIGEST OF TARIFF HEARINGS, H. R. 7456. Costs and selling pieces. The witness referred to exhibits shown by Mr. Schwab, which the latter claimed were made by the witness's concern and sold for $1.50 per yard. The witness stated that these goods, made from artificial figures, were originally imported from France at $4.50, $5, and $6 a yard. They are a distinct business novelty. The articles come to this country and are put on sale at a very high price, and sometimes the profit put on by the foreign manufacturer was so tremendous that domestic competition was possible. The firm has commercialized the article, reducing qualities, making sometimes the same pattern and sometimes similar patterns, and are selling these goods to-day at $1.50 per yard, permitting the importer to make his profit 25 per cent. A warper earns in Lyons, France. $6.50, in this country $42, wages in France being converted at the current rate of exchange. The witness does not agree with Mr. Schwab's method of computing for- eign cost on an article selling for $6 in the domestic market and dutiable at 60 per cent on American valuation ; $6 minus ($3.60 duty plus $1.50 profit and overhead plus 9 cents packing, etc.) equals $0.81 foreign cost. Mr. Schloss's method, as explained to the committee, would be : Per cent. 100=American valuation. 60= Duty, American valuation. 40=Foreign cost, importers' profit and charges. 60-=-40 per cent=150 per cent on foreign valuation. In China, where lace is made by hand, it is sold by the Chinese manufacturer at 6 cents a yard, of which 4 cents represents labor. With a 48-hour week wages would amount to 64 cents as against $50 to $60 to machine workers in the United States. The witness's firm, formerly large producers of veiling, is now entirely out of that business. Dots are put on by hand and cost about 60 cents a thousand dots in this country. Veilings are landed here to-day in large quantities at 20 to 21 cents per yard, containing about 1,500 or 1,600 dots. The retail price is somewhere between 85 cents and $1 a yard. The article made by machine is somewhat like it and costs about 324 cents a yard to make. Size of industry. The firm began making Levers lace in 1909 and 1910. Comparability. The Calais manufacturer produces art goods a more elegant and higher quality of merchandise. All of the veil- ing that has been selling on a large scale is what is called Chenille veiling. Rates suggested. Sixty per cent on American valuation, which, as figured by the witness, is equal to 150 per cent on foreign valua- tion. The words " whether finished or unfinished " should be in- serted, as lace is very often imported in the raw state or in an un- sewed condition. Hearings : Pages 4200-4202. Witness: H. A. Phillips, representing American Lace Manufac- turers' Association. Costs and prices. The difference in cost between the United States and European countries is entirely due to the great differences in wages, illustrated by the following tables in a brief of the association. DIGEST OF TARIFF HEARINGS, H. R. 7456. 487 Comparative union wage* in Lyou and Neic York, per week of .'f8 hours. Liberty lace and netting works. Lyon, France. New York. Plain net weavers... . $9.00 9.00 6.50 6.50 5.40 6.00 $50.00-$55.00 55.00- 60.00 42.00 30.00- 35.00 22.00 30.00- 35.00 Lace weavers Warpers Brass bobbin winders Silk winders Threaders Comparative icayets in Nottingham and New York. Libertv lace and netting works. Nottingham, England. New York. Day work, per hour $0. 18 $0.69 1.30 .40 .40 .50 .30 .10 25.00 15.00 25.00 50.00-80.00 Brass bobbin winding, per thousand. . .12 Threading, per thousand .15 Mending: Y ' ^ Per rack .03 250 racks 7. 50 Draftsman, per week: Apprentice 6. 00 j The brief also cites the following "Examples" in support of the association's belief that the rate of 45 per cent on American valua- tion will not afford sufficient protection to permit the American in- dustry to continue: Selling price of American manufac- turer. Sg *=a rnTnX- gdt y turer. required. 1 Veiling Cents. 7 64 Cento. Per ctnt. "1 42 68 do 20 80 7 3U 64 do 19 38 5 28 73 4 Veiling 164 40 1U ^7 88 5 Veiling do ' 5 53 1 26 77 6. Valenciennes lace 7. Valenciennes lace per 12 vards . . ".do.... 107.00 40.00 56 00 31.00 71 12.00 70 17 00 69 do 71 00 22 00 69 do 38* 12.00 69 11. Valenciennes lace do.... do 5000 146 00 15.00 70 40 00 72 do 30 00 11J 61 14. Valenciennes lace 15. Valenciennes lace do.... do.... do 38.00 45.00 58 00 14. 4 62 17.3 61 23 00 60 1" V'llp'ioip'irp*; larp do 70 00 28 8 59 per 144 yards.. $S.95 $4.20 58 19 Oluny do 21 65 9 36 57 do 13 10 4 >;s m 21. And lilet 22 Laces do.... do . 6.74 5 95 2.55 62 3 00 49 Averaee 6 488 DIGEST OF TARIFF HEARINGS, H. R. 7456. Size of the industry. Prior to 1909 there were in the United States 83 Levers or go-through machines and no circular machines. To-day there are 600 Levers or go-through lace machines and 1,000 circular lace machines so engaged. There are 9.900 Levers or go-through lace machines in England, France, and Germany, and approximately 50,000 circular lace ma- chines in Germany. The investment in the United States is $21,000,000, giving oppor- tunity for the employment of approximately 8,000 people. Rates suggested. The rate to be increased from 45 per cent Ameri- can valuation to 60 per cent American valuation. Hearings : Pages 3430-3434. Witness: Joseph W. Stein, representing the American manufac- turers of cotton and linen handkerchiefs, New York City. (Brief.) Rates suggested. Cotton handkerchiefs and mufflers composed of cotton cloth, in the piece or otherwise, finished or unfinished, if em- broidered in any manner with an initial, letter, monogram, or other- wis.e. by hand or machinery, or if tamboured or appliqued or scal- loped, or if trimmed wholly or partly with lace or with tucking or insertion, shall pay a duty of 42 per cent ad valorem. This to form part of paragraph 917. If foreign valuation is retained then a 75 per cent rate of duty is asked. Comparability. The brief states that Great Britain is the greatest competitor in cotton and linen handkerchiefs and Switzerland in embroidered goods. The domestic production cost is double that of Great Britain, and stitching costing 30 cents here is turned out for about 16 cents in Switzerland. Hearings : Pages 3398-3400. . Witness: The Narrow Fabric Co, Reading, Pa. (Brief.) The brief directs attention to the 1920 platform of the Republi- can Party and to certain schedules in H. R. 7456, suggesting that the rates proposed in the latter be brought into closer harmony with the former. Comparability. Accurate first-hand information shows that Ger- man braiders earn 280 marks per week at the then rate of exchange equivalent to about $3.50 per week. This rate compares with $25 to $40 per week paid in the company's factory. It is urged that the proposed rates in paragraph 912 do not begin to cover this dis- crepancy. Harmful competition may also be expected from Japan, Belgium, and Italy. Further data on prices include quotations from German firms on rickrack braids from which tables on page 3399 were compiled. The figures show plainly the disadvantage under which the com- pany labors in competing with foreign manufacturers. Witness : The Oswald Lever Co. (Inc.) , Philadelphia, Pa. (Brief ; no appearance at hearings.) Renuirl's. This concern manufactures a special machine for the lace trade, used in making an imitation of hand-made laces, commonly called Cluny or Barmen lace. Orders for these machines have been canceled and thousands of dollars worth of machinery have been left on the company's hands, owing to the dumping of this line of lace from Germany on the New York market. Other laces have been reclassified in the emergency tariff, and the question is asked why these laces have been left out. DIGEST OF TARIFF HEARINGS, H. R. 7456. 489 Hearings : Pages 4175-4181. Witness: Mr. Lemuel J. France, representing the Lace and Em- broidery Association of America. Hates suggested. The witness is opposed to the American valua- tion plan. It is impossible to suggest a rate for laces and embroider- ies on that basis equivalent either to the present or the Payne- Aldrich rate. He suggests retention of the present duty of 60 per cent on foreign valuation and believes that the proposed rate on laces of 45 per cent on American valuation is equivalent, on foreign values, to rates ranging from 123 to 218 per cent. Remarks. Many members of the association manufacture in this country as well as import laces, embroideries, and similar lines, and many more handle domestic lines of such merchandise. While a condition of idleness in this industry now exists in this country, such condition also exists in Switzerland, and is due to change of fashion and general economic causes, and not to foreign competition. An increased rate, while it would afford protection against German goods, would shut out imports from other countries. To meet these conditions. Mr. France asks w r hy it should not be possible and feasible to provide for a duty additional to the fixed rate, the size of it to depend on the extent of depreciation of currency of the country from which the goods were exported, or, in the case of indirect shipments, the country of origin. Such a duty could be provided for with a further proviso that it would be levied or not, in the discretion of the Secretary of the Treasury according as he might find that American industry was being injured by importations because of such de- preciation. Hearings : Pages 4181-4184. Witness : Mr. David E. Schwab, New York City. Comparability. Samples w-ere shown by the witness of domestic articles with relative similar articles of foreign make. The prices were $1.50 for domestic and $2.50 for foreign; $1.50 and $2.50 for domestic and $4 for foreign ; $0.75 for domestic and $1.05 for foreign. Rates suggested. The witness opposes the American valuation plan and advocates the retention of present rate and foreign valuation. Remarks. The witness denied that he owned a factory in Austria, as alleged by a previous witness. He had owned one, but it was scrapped in 1911 or 1912. To illustrate the effect of 60 per cent ad valorem on American valuation, he stated that the selling price would include the duty. 60 per cent of the selling price; profit. 25 per cent on the selling price being considered a fair average to include over- head, etc.. and packing and transportation charges. H per cent : a total of 86J per cent of the selling price for duty, profit, and expense, which would leave only 13^ per cent to represent the cost. The sell- ing price in this country would, therefore, of necessity, be at least six times [sic] the cost of the article. There is no industry established in Germany with the Levers go- through machine, but a different type of goods* of this class is manu- factured there. 490 DIGEST OF TARIFF HEARINGS, H. R. 7456. Hearings : Pages 4184-4185. Witness: Mr. Max Xeuberger. Rates suggested. Retention of present rate and foreign valuation. Remarks. With reference to statements that there are many idle machines in this country, the witness states that this is usually true all over the world, as laces and embroideries are subject to fashion, and have not been in style or demand. Hearings : Pages 4202-4205. Witness : Mr. Thomas M. Lane, representing manufacturers and importers of Madeira embroideries. Costs and selling prices. A brief submitted by the witness gives this illustration of the application of a 22^ per cent rate, based on American valuation, of a typical article selling for $10 in the United States and costing i;3.75 in Madeira: Foreign price $3.75 Duty of 60 per cent on foreign value of $3.75, or at 22 per cent on American selling price of $10 2.25 Landing charges (including freight, insurance, customhouse entry fee, consular fee) and packing charges .50 Overhead in United States. 20 per cent on the selling price 2.00 Profit--. 1.50 10.00 Comparability. Madeira embroideries are absolutely noncompeti- tive with anything manufactured in this country in any fair sense. They are a native product of Madeira, purely handwork no machine work whatever obtainable only in limited quantities, and could not be commercially produced in commercial quantities except by a class of labor found among relatively primitive people. Rates suggested. The proposed rate of 37 per cent will have to be materially reduced if the American valuation plan is retained. The highest rate which this product will bear on the American valua- tion basis is 22^ per cent, equivalent to 60 per cent on foreign valua- tion at the normal ratio between foreign and domestic prices. (See table above.) The 37^ per cent rate would amount to about 135 per cent on foreign valuation. Machine-made embroidery may re- quire a different treatment, in which case a separate classification could be made for articles produced exclusively by hand. Remarks. American capital has been very largely invested in Madeira and controls 75 per cent of the production. In a brief filed with the committee on July 27, 1921, protest was made against the adoption of the American valuation plan. The second brief recapitulates parts of the Republican national platform of 1908 and 1920. pledging the party to the policy of pro- tection. In the former, protection was defined as '" the imposition of such duties as will equal the difference between the cost of produc- tion at home and abroad, together with a reasonable profit to Ameri- can industries.'* The brief includes the two following tables, show- ing how seriously the company would be affected by the rates of duty proposed in H. R. 7456 : A further brief, dated December 1, 1921, states that the rates pro- posed in H. R. 7456 are distinct reductions from the present rates, and if enacted into law would work a serious hardship to domestic manufactures of boot, corset, and shoe lacing. The greatest compe- DIGEST OF TARIFF HEARINGS, H. R. 7456. 491 tition comes from Germany and, to a less extent, from Japan, Bel- gium, and Italy. Even if German wages advance to pre-war rates, the wages paid in the United States would still be more than 100 per cent higher. Rickrack braids constitute one of the principal products of the com- pany. If the 45 per cent rate proposed in H. R. 7456 becomes a law, it wilfr be impossible for manufacturers here to meet German competi- tion. The brief gives detailed figures of domestic production costs and the landed costs of various imported braids. A salesman of the Narrow Fabric Co. was shown laces purchased in Germany by a New Orleans firm for 18, 15, 22, up to 35 cents per dozen yards as against ?.4, 48, 57, and 87 cents of the witness's firm. It was stated that the German prices included the duty and everything. Rates suggested. Rickrack braids are dutiable under the act of 1913 at 60 per cent and under H. R. 7456 at 45 per cent. It is claimed that this reduction should not be made, but that the existing rate of duty should stand. The proposed rate of 45 per cent on laces is inadequate. The measure of protection should be to equalize the cost of production at home and abroad. PARAGRAPH 1431. GLOVE LEATHER. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. A. R. White, representing the fine glove-leather manufacturers, Glov- ersville, N. Y. Hearings : Pages 4206-4210. Costs and selling prices. In a brief supplementing the witness's testimony, it is stated that labor is the principal element, in the difference between the cost of producing glove leather in this coun- try and in Europe. In order to produce good leather, it is necessary to have the greater part of the work done by hand labor. Not only are German wages at least 50 to 60 per cent lower than in this coun- try for corresponding work, but hours are longer there and women and apprentices are used much more than here. The American manufacturer also has to pay more for his dyes and chemicals. Size of industry. There are about 40 fine glove-leather manufac- turers in this country. The value of the output is between five and six million dollars a year. During 1919, the industry employed 2,500 men at average wages of $32.50 per week. Most of the establish- ments are in Fulton County, N. Y. Rates suggested. Thirty per cent on foreign valuation and 20 per cent on American valuation. It is not believed that this rate would be prohibitive. The varieties of fine glove leather are glace, lambskin, nappa-tan, freized mocha and suede, and chamois. Those imported into the United States come either colored, in the white, or in the crust. The words " in the white " and " in the crust " should be contained in the tariff provision, in order that the Government may not be deprived of the fixed rate of duty by having the importer declare that such leather " in the white or " in the crust " has been im- 492 DIGEST OF TARIFF HEARINGS, H. R. 7456. ported for purposes other than used in the manufacture of fine gloves. Remarks. This industry is at a disadvantage with its foreign competitors in the matter of raw material. All the skins from which this leather is made have to be imported into the United States, while France, England, Italy, and Germany produce the skins or are near the source of supply. Italy formerly manufac- tured but little fine glove leather coming here, but the records show that in 1920 about $1,000,000 worth of Italian glove leather was imported into this country. The business of manufacturing fine glove leathers has been developing under the encouragement given by earlier tariffs. PARAGRAPH 1432. LEATHER GOODS. WITNESSES, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Samuel F. Leber, attorney, and Mr. K. Kaufman, representing K. Kauf- man & Co., manufacturers of leather bags, suitcases, etc., Newark, N. J. Hearings: Pages 4210-4214. Witness: Mr. Samuel F. Leber, attorney. Costs and selling prices. The witness cited instances of under- selling by German and British makers. A brief amplifies data in this connection and states that since 1914 the wages paid in the Kaufman factory have increased from 100 to 150 per cent; within the last year .reductions have amounted to only 10 per cent and overhead expenses are still high. Leather luggage is made prin- cipally by hand labor. European labor is cheaper than American labor by more than the amount of duty proposed in the present bill. If a duty is levied on leather the cost of material will be increased. Rates suggested. Sixty per cent ad valorem on nonfitted bags and cases (foreign valuation). Duties are levied by the proposed bill on many articles used in the manufacture of these cases, namely, metal locks and frames, silk linings, cotton linings, sewing threads, fiber board, celluloid fittings, cut-glass fittings with gilded metal tops, mirrors, brushes, scissors, etc. The above rates have been recommended after conference with many manufacturers of leather luggage. Remarks. Ocean freight rates have gone down, adding to the danger of foreign competition in leather goods. There is keen com- petition among domestic manufacturers in this line of goods. Hearings : Pages 4214^-4217. Witness: Mr. K. Kaufman, representing K. Kaufman & Co., Newark, X. J. Supplementing the statement made by his attorney, Mr. Samuel F. Leber, Mr. Kaufman said that the American valuation plan would be objectionable because of the difficulty in securing equitable administration. He also emphasized the high cost of marketing the product in this country as compared with the low expenses of foreign manufac- turers at Auerbach, Germany, for example, who practically sell their goods " over the counter " to American buyers who go there. DIGEST OF TARIFF HEARINGS, H. R. 7456. 493- PARAGRAPH 1433. LEATHER GLOVES. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Lucius Littauer, representing the Associated Leather Glove Manufac- turers of the United States. Gloversville, N. Y. FAVORING LOWER DUTIES : The Association of Glove Importers, New York City. Hearings : Pages 4218-4222. Witness : Mr. Lucius Littauer. Costs and selling prices Wages paid in this industry in the United States are now 95 per cent higher than in 1912, 1913, or 1914. There has been one reduction of 12 per cent from the high point and the employees have agreed, of their own accord, to a further reduction of 6 to 10 per cent in the hope of regular employment. Ladies' black kid gloves are popular and the imported gloves increased in price from $40 to $48 a dozen pairs in June, 1921, to $64 in January, 1922. The value of imports was $16,486,000 in the fiscal year ending June 30, 1921, more than double the importation of the previous year. The respective numbers of pairs were 965,000 dozen and 582,018 dozen. The production of American gloves dropped to 40 per cent of the normal value and the number of dozen pairs to 25 per cent of the usual amount. Furthermore, jobbers have not placed their orders for the coming year, as they usually do in January. Rates suggested. In paragraph 1433, line 19, insert before the word " Provided " the words " when sewed, pique or prixseam, 40 cents per dozen pairs." Embroidering and embellishment of gloves, for which an extra duty of 40 cents per dozen pairs is provided by the bill, does not cover the forms of sewing mentioned above. The Ding- ley and Payne- Aldrich bills allowed for each of these purposes 40 cents a dozen pairs. The ordinary sewing is done on a machine run- ning at a much higher rate of speed than the one on which pique sewing is done. In the latter style of sewing two seams are super- imposed. The glove manufacturers ask for a minimum ad valorem duty of 60 per cent on foreign valuation (or 37^ per cent on American valua- tion) because imports have increased greatly in value, while the equivalent ad valorem rate of duty has fallen. Importations from 1898 to 1913 amounted each year to $7,000,000 ($100,000 up or down) and the duties collected during those years, based upon foreign valua- tion and a specific duty, amounted to $3,200,000, or an average of 52 per cent ad valorem. In 1920, the value of gloves had increased until in the calendar year there were imported $14,044.283 worth, or about twice the former imports. Receipts from duties had been falling from $3,200,000 to $1.297,000, a drop of approximately $2,000,000. That is to say, the duties had fallen off one-third and, as the value had doubled, the ad valorem rates now being collected are only 14 per cent as against the previous 52 per cent. Witness: The Association of Glove Importers, New York City. (Brief; no appearance at hearings.) Rates suggested. It is submitted that the proposed rates on women's leather gloves would be burdensome, adding from $1 to $1.50 pe,r pair to the cost of the lightweight kid gloves for general wear. 494 DIGEST OF TARIFF HEARINGS, H. R. 7456. As women's kid gloves are not luxuries, but necessities, there is no justification for rates higher than those imposed by the Payne- Aldrich law. The women of this country will object to this addi- tional burden of taxation. The provision for a minimum ad valorem rate of 37^ per cent would mean an increase over previous rates of from 300 to 500 per cent. The rate of 50 cents for each additional inch in excess of the limit provided is excessive and out of proportion to the basic rates ; it should be reduced to 25 cents an inch. Ad valorem rates on gloves have been tried and have proved a failure. American manufac- turers of women's leather gloves have been given protection but have failed to produce gloves corresponding in style and finish to the imported article. American employees have not the skill necessary to produce as good a glove as the French worker ; those of the latter who have been brought to this country have not proved able to duplicate their work under American conditions. About 90 per cent of the imported leather gloves for women and children are light-weight gloves which cannot be manufactured in the United States. Under such a high duty on kid gloves as is proposed in the pend- ing tariff bill, importations would decline greatly, with a corre- sponding loss of revenue. The higher cost of the imported gloves, caused by the tariff, would put up the price of the domestic glove. The rates of the Payne- Aldrich bill were 50 per cent higher than existing rates and would provide additional revenue for the Govern- ment and also give the women of the country opportunity to buy necessary apparel. PARAGRAPH 1433. WOVEN LEATHER GLOVES. Hearings: Pages 4222-4225. Witness: The Association of Glove Importers, New York City. (Brief; no appearance at hearings.) The brief submits that women's kid gloves are known to be actual necessities and in no sense luxuries, and that the hopes of a success- ful manufacture of high-class articles in this line have not been realized. Special qualities inherent in French labor are not found here, and the long experience required is also lacking. No attempt should be made, through the medium of a high tariff, to compel American women to be satisfied with a glove of domestic manu- facture that does not compare in quality or appearance with the imported article. The brief suggests, as a maximum, the rates of the Payne-Aldrich tariff on women's leather gloves. These are not less than 50 per cent higher than the existing tariff rates, and a greater increase would be intolerable. PARAGRAPH 1434. CATGUT, ETC. WITNESS, AND IN TEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Thomas J. Mee, representing the Chicago Gut String Manufacturing Association. Hearings : Pages 4225-4226. Costs and selling prices. Tennis strings selling for $200 a gross in this country can be bought abroad for half of that amount, and DIGEST OF TARIFF HEARINGS, H. R. 7456. 495 cheaper grades which sell for $160 a gross can be bought abroad at a cost of less than $100 a gross. The foreign cost of music strings is about one-fourth of the 'American selling price. Music strings of American make, sold in this country for $4 a bundle, can be bought abroad for $1 a bundle. Surgical catgut can be bought abroad for one-half the price of the American article in this country, the American price being around $13 a thousand feet and the foreign price about $6 a thousand feet. Rates suggested. The equivalent of at least 35 per cent on the American value for tennis strings and surgical catgut: on music strings as high a rate of duty as the committee can give. If manufacturers of certain kind of fishing tackle would be seri- ously injured by the imposition of a duty on " worm gut," then such gut should be placed on the free list. Remarks. A brief previously filed with the Ways and Means Committee gives details of the industry. PARAGRAPH 1434. WORM GUT. WITNESSES. FAVOKING LOWER DITTIES . G. W. Frost & Sons, Stevens Point, Wis. (Brief.) The Pequea Works, Strasburg, Pa. (Brief.) Mr. Joseph E. Pfluger, Akron, Ohio. Witness: G. W. Frost & Sons, Stevens Point, Wis. (Brief; no appearance at hearings.) Rates suggested. Worm gut should be on the free list. Remarks. Worm gut is an exclusive silk-worm product of a very small center in Spain. Notwithstanding diligent experiments, it has never been possible to produce it in this and other countries. It is used almost exclusively in the manufacture of snelled hooks, leaders, casts, and other fishing tackle. Witness: The Pequea Works, Strasburg, Pa. (Brief; no appear- ance at hearings.) Rate* suggested. A tariff on worm gut would be disastrous to the manufacturers of fishing tackle. Under former tariffs it has been free of duty. Remarks. Worm gut is not and, for climatic and other reasons, can not be produced in this country. The world's supply practically all comes from Spain. Hearings: Pages 4226-4228. Witness : Mr. Joseph E. Pfluger, Akron, Ohio. The witness explained to the committee that a misunderstanding or a mistake had arisen in connection with paragraph 344, evidently intended for 1434 as regards this item. Worm gut is a silkworm growing in southern European countries and is used extensively for the making of fishing tackle. As the outcome of the witness's testimony, it was understood that catgut should be placed on the dutiable list and that worm gut should continue to come in free. 496 DIGEST OF TARIFF HEARINGS, H. R. 7456. PARAGRAPH 1435. GAS MANTLES. WITNESSES, AND INTERESTS HKPBESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Sidney Mason, representing the Welsbach Co. The Lindsay Light Co., Chicago, 111. (Brief.) Hearings : Pages 4230-4233. Witness: Mr. Sidney Mason. Costs and selling prices. The German mantles, the Holland mantles, or the Netherlands mantles are entered in the American market at from $32 to $35 a thousand. Taking the entering value at about $36. the duty under the Underwood bill would be $8.75 to $9. The American wholesale price for the corresponding mantle is $65, and the difference of 30 per cent is more than double the duty. Gas mantles vary in value, due to variation in quality, but the popular mantle's retail price is from 10 to 15 cents. This* price prevails even though the foreign mantle is imported at $45 a thou- s.and. There is an increase in cost of materials and labor running from $15 to $27 a thousand. Wage rates are at least 20 per cent above those of 1914 and cost of materials will average over 50 per cent. The American manufacturer is producing a gas mantle at from $58 to $60, which used to be at about $42. Rates suggested. Fifty per cent ad valorem on American valua- tion. Remarks. It is pointed out that the duty on materials* entering into the manufacture of gas mantles is $12.18 a thousand mantles under H. R. 7456 and $4?<2 under the act of 1913, a difference of about $8 or 200 per cent. The duties on materials are not objected to. The brief referred to is not printed in the hearings. Hearings: Pages 4229^230. Witness: The Lindsay Light Co., Chicago, 111. (Brief.) Comparability. The company reviews the history of German and Japanese importations into this country in 1914 and prior thereto, as well as since the war. Quotations had been made as low as $45 per 1,000, which, with the present duty of 25 per cent ad valorem, made it possible to bring in mantles of a very good quality at less that $60 per 1,000. American manufacturers can not duplicate these qualities at less than $85 per 1.000. Ra.te$ suggested. That the tariff on gas mantles in the past has not been high enough is shown by a reduction in the number of do- mestic manufacturers since 1910 from 99 to 23. It is the opinion of over 80 per cent of this industry that nothing short of 50 per cent ad valorem, on American valuation, will enable those now operating to meet foreign competition and show a nominal profit. PARAGRAPH 1437. MANUFACTURES OF GUTTA PERCHA. FAVORING PROPOSED OR HIGHER DUTIES : The Bishop Gutta-Percha Co., New York. (Brief; no appearance at hear- ings.) Costs and selling prices. The cost of manufacturing gutta-percha goods consists of about 50 per cent for material and 50 per cent for DIGEST OF TARIFF HEARINGS, H. R. 7456. 497 labor and overhead. In Germany the labor and overhead cost is about one-third of what it is in the United States. Comparison of costs. United States. Germany. Materials $0.50 $0.50 Labor .... 50 17 Total 1 00 67 Duty, 35 per cent on $1 .35 1.02 Size of industry. There are only four or five manufacturers in the United States with an aggregate business of from $750,000 to $1.000.000 per year. Rates suggested* A duty at least equal to that provided in the 1913 act (35 percent). PARAGRAPHS 1437 AND 1438. MANUFACTURES or RUBBER. WITNESS, AND INTERKST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. A. L. Viles, representing the Rubber Association of America. Hearings : Page 4233. Rates suggested. The association, representing 90 per cent of United States rubber manufacturers, approves paragraphs 1437 and 1438 regarding rubber articles. The proposed 10 per cent duty on tires should not be higher, as reprisal tactics of other nations are more to be feared than the competition from importations. PARAGRAPH 1438. HARD RUBBER PRODUCTS. WITNESSES. AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHEK DUTIES : Mr. Judson Drayton, representing the Vulcanized Rubber Co. (Brief.) Mr. F. G. Achelis, representing the American Hard Rubber Co., New York City. Hon. Samuel K. Owens, acting mayor of Butler, N. J., and member of the House of Assembly of New Jersey. (Brief.) Hearings : Page 4233. Witness : Mr. Judson Drayton, representing the Vulcanized Rub- ber Co. (Brief.) Costs and selling prices. The total cost of labor is very much higher for hard-rubber goods, being 60 to 70 per cent of tne total cost of the article. Wages paid in this country are from 4 to 6 times as high as those paid for the same work in Germany, Austria, and Japan. Size of industry. The American hard-rubber business, when run- ning to capacity, employs 7.000 hands, with an output of $15,000,000 to $20.000,000. 498 DIGEST OF TARIFF HEARINGS, H. R. 7456. Rates suggested. There should be a separate paragraph or classi- fication for hard-rubber goods, as distinguished from rubber goods in general. The proposed rate of 30 per cent should be increased to at least 45 per cent, or, if the 30 per cent rate be retained, then, in addition, a specific duty of at least 40 cents per pound. Remarks. Hard rubber is forced to compete with many other ma- terials, whereas soft rubber has no such competition. Hearings : Pages 4234-4240. Witness : Mr. F. G. Achelis, representing the American Hard Rub- ber Co., New York City. Costs and selling prices. Manufactures of hard rubber represent a great deal of hand labor on a small quantity of material. A gross of 8-inch combs takes 8 pounds of material and a single 32 by 4 automobile tire weighs 25 pounds. Labor is the large factor of cost. In 1920 it was 65 per cent of the cost of the total product. Wages in the hard-rubber industry. Average earnings per annum. Comb operations. Germany. United States, 1921. 1913. 1921. Female. Male. Platin? Jl/orfc*. 1,000 1,000 1.000 1,100 950 1,053 980 $240 240 240 264 228 253 235 Marks. 10,000 10,000 10, 000 11,000 a, 500 10, 530 9,800 $100 100 100 110 95 105 98 $1,510 1,560 1,610 1,690 1,645 1,145 1,295 Rabbin?.. . ""$i,"340 U20 Washin" Polishing Stamping In the preparation of technical articles, vulcanizing work, the wages for German women are 9 marks; for men, 23.56 murks, per week. In the preparation of electrical insulating material, German women, 14 marks ; men, 29.30 marks, per week. In the manufacture of combs, finishing work, German women, 12 marks ; men, 24 marks, per week. Turning, German women, 16.33 marks; men, 28.37, marks, per week. A hard-rubber article [exhibit], which after it is cut in two be- comes a smoker's article, was sold at $2.30 a gross. The American cost to manufacture a similar article was $2.66 a gross. There are 300 different types of combs, varying in price from $9 to $100 a gross, wholesale. A fancy comb [exhibit] would sell for $45 per gross, net. Size of industry. The American Hard Rubber Co. operated three factories, with 3,000 employees in 1920 and 1,789 on December 1. 1921. Twelve concerns in the United States manufacture hard- rubber articles. Comparability. The Germans make excellent goods. Competi- tion with them is not on quality but on wages. DIGEST OF TARIFF HEARINGS, H. R. 7456. 499 Rates suggested. Fifty per cent on American valuation, or, as an alternative, a specific "duty per gross of combs, or per pound of product. Remarks. Hard rubber is radically different as an industry from tires, boots and shoes, mechanical goods, and soft rubber sundries. It is a specialized and highly technical industry, competing with other plastics, such as celluloid, bakelite, condensite, redmanol, gala- lith, vulcanized fiber, etc. Attention is called to the fact that combs and other articles made of hard rubber carry a duty of 30 per cent, while combs and other articles made of pyroxylin carry a duty of 65 cents per pound and 25 per cent ad valorem; galalith, 40 cents per pound and 25 per cent ad valorem; fountain pens, holders (mostly made of hard rubber), are protected by a specific as well as an ad valorem duty ; combs of horn or horn and metal. 35 per cent. The export market has been ruined by the flood of cheap Japanese and German products. The hard-rubber industry is entirely different from the soft- rubber industry. Witness: Hon. Samuel K. Owen, acting mayor of Butler, N. J., and member of the House of Assembly of New Jersey. (Brief; no appearance at hearings.) Rates suggested. Suitable legislation should be enacted so that hard rubber goods can be imported only on a basis of American val- uation or under a tariff which will equalize the difference in ex- change. Remarks. Since the recent revival of foreign manufacture, the American market is being flooded with cheap rubber combs of Ger- man manufacture which, under existing conditions, can be sold here at prices with which it is utterly impossible to compete. Hard rubber goods should not be confused with other rubber goods. PARAGRAPH 1438. MANUFACTURES or PLASTER or PARIS. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. T. M. O'Connell, representing T. M. O'Connell Co.. Philadelphia, Pa. Hearings: Pages 4240-^243. Costs and selling prices.^- Xinety-five per cent of the work in mak- ing plaster of Paris ecclesiastical and other statuettes is handwork. In Germany, type casters are paid 300 marks, polishers 280 marks, and painters 350 marks per week. Material costs in Germany in- clude: Plaster of Paris, which in peace times used to cost 1.20 marks the bag, now costs 36 marks ; colors have gone up more than 500 per cent. The following weekly wages are being paid at witness's plant: Casters, $40 or 2,000 marks; polishers, averaging $35 or 700 marks; painters. $30 to $50 or from 1,580 to 2,500 marks. Plaster, the prin- cipal commodity used, $1.50 per bag as against 18 cents in Germany. Size of the industry. Three hundred thousand dollars' worth of various statuettes are manufactured in Philadelphia ; there are three manufacturers in New Jersey, and several in Xew York, some in Bos- ton, and some in the other large cities. It was estimated that, as -i whole, the product would amount to $500,000. 500 DIGEST OF TAKIFF HEADINGS, H. B. "7456. Comparability. Small statuettes were never manufactured up to the time of the war in this country to any extent ; 75 to 90 per cent imported. Statuettes made of bisque or china were never manufac- tured in the United States and were highly protected under prewar conditions (55 and 60 per cent). Rates suggested. Under existing conditions, 100 per cent on American valuation. Small statuettes should have a higher duty than larger ones, because they are carried in bulk and open stock and are used mostly in homes and sometimes in schools or private chapels or convents, but seldom, if ever, in churches. A separate classification of these articles is desired. The following is the phraseology recommended : Manufactures of plaster of Paris, casts of sculpture, statuettes made of plaster of Paris, papier-mach6 carton piers, metal or other material, of cruci- fixes, over 7 inches in length, with wooden cross and corpus of any of the foregoing materials. A similar tariff should be put on metal crucifixes or any crucifixes made of other substances, as they enter into competition with plaster crucifixes. Metal crucifixes are brought in under the metal schedule. Remarks. A comparative statement of prewar and present-day wages has been filed with the Committee on Ways and Means, to- gether with a schedule of prices. PARAGRAPH 1441. VIOLINS. WITNESS. FAVORING LOWER DUTIES : John A. Gould & Son, Boston, Mass. (Brief; no appearance at hearings.) Rates suggested. The writer of the brief is apparently opposed to a specific duty applying to cheap violins, as in some cases the value would not be much greater than the duty. Many violins are being imported free of duty on account of their supposed antiquity, and it is suggested that the same duty be placed on old instruments as on modern ones. PARAGRAPH 1441. TUNING PINS. WITNESS. FAVORING LOWER DUTIES : Hammacher, Schlemmer & Co. (Inc.), New York, X. Y. (Brief; no appear- ance at hearings.) Costs and selling prices. Prior to the war, tuning pins were sold by domestic manufacturers as low as $2.40 per 1,000, but when im- portations ceased the price was advanced to $10 per 1,000. Now that tuning pins are again being imported the price of the domestic pins has been reduced to $5.30. The following data are based on August 1, 1921, prices : TUNING PINS, FORKIGN. Per 1.000. Foreign currency price (Germany) $3. GO Cost of packing and cases .14 Dutiable total _. - 3.74 DIGEST OF TARIFF HEARINGS, H. R. 7456. 501 Per 1,000. Other expenses to bring goods to port of arrival, c. i. f. cost $0.20 Total 3. 94 Present duty, at 35 per cent on .$3.74 1. 31 Present landed cost, duty paid 5. 25 Importer's present selling price to trade, adding 334 per cent to cost 7. 00 TUNING PINS, AMERICAN (MADE BY THE AMERICAN MUSICAL SUPPLY CO.) COMPARA- ABLE AND COMPETITIVE. Selling price to the trade $6.00 Proposed duty, based on American valuation : Ad valorem 25 per cent : $1. 50 Specific $1 per 1,000 1.00 Total duty 2. 50 Less present duty, 35 per cent on foreign value 1. 31 Increase in duty of 1.19 On which importer claims a gross profit of 33J per cent .40 Amount which must be added 1. 59 To selling price of 7. 00 Making new selling price of 8. 58 The total duty on 1,000 tuning pins, based on American valuation, is equivalent to 67 per cent on foreign valuation. Rate* suggested. The rate of $1 per 1,000 and 25 per cent ad valorem will make it absolutely prohibitive to import tuning pins. It is recommended that tuning pins be not separately provided for, but allowed to come in as parts of musical instruments, as the}' have in the past. PARAGRAPH 1444. ROSARIES. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES: Mr. Francis J. Smith, representing the Association of Catholic Publishers, Manufacturers, and Dealers in Catholic Goods of America. Mr. John R. Rafter, representing importers and dealers in rosaries and other religious articles. (Brief.) Mr. Emil Klein, representing G. Klein & Son, Providence, R. I. Hearings : Page 4246. Witness : Mr. Francis J. Smith, representing the Association of Catholic Publishers, Manufacturers, and Dealers in Catholic Goods of America. Rates suggested. Separate classification for rosaries. The asso- ciation is not interested in rates, whether high or low. Approves of the suggested omission of the words "similar articles of religious devotion," as they will lead to confusion. Hearings: Pages 4243^246. Witness: Mr. John R. Rafter, representing importers and dealers in rosaries and other religious articles (Brief). Size of industry. The annual importations average about $300,000. Comparability. The only rosaries made in the United States are those composed of precious metal or of precious metal in combination 7713422 33 502 DIGEST OF TARIFF HEARIXGS, H. R. 7456. with beads of semiprecious or imitation precious stones. Practically all rosaries imported are made of base metal solely, or of base metal in combination with other common materials, wood. bone, glass, etc. Rates suggested. No recommendation as to rates, but the classi- fication adopted by the House of Representatives is approved. Remarks. Only by means of a special (eo nomine) provision of the kind recommended will rosaries be classified at a uniform rate of duty. In the absence of such a provision they will continue to be assessed for duty, as now and heretofore, at various rates, dependent on their component material of chief value a most unsatisfactory rule of tariff classification both from an administrative and a busi- ness standpoint and producing the most anomalous and absurd results. Hearings: Pages 4247-4250. Witness: Mr. Emil Klein, representing G. Klein & Son, Provi- dence, R. I. Costs and selling prices. Exhibit 1 : Two rosaries made of imita- tion cocoa beads strung on nickel-plated chain, with the customary corpus attached. Sells in the American market for less than $1.25 per dozen. Exhibit 2 : Two rosaries, one made of imitation cocoa beads and nickel-plated chain, the other of nickel-plated beads and chains. They are valued at more than $1.25 per dozen. Exhibit 3 : A rosary of pressed beads and gold-plated chain of American manufacture. The cost of production is $16.63 per gross, of which $12.96 is for labor. The cost of the same rosary made abroad and laid down in this country, exclusive of duty, is $8.71. Exhibit 4: A rosary of fine cut beads and gold-plated chain of American manufacture. The cost of production is $21.61 per gross, of which $12.96 is for labor. The cost of the same rosary made abroad and laid down in this country, exclusive of duty, is $11. Exhibit 5 : A rosary of fine oval beads and gold-plated chain of American manufacture. The cost of production is $34.16 per gross, of which $12.96 is for labor. The cost of the same rosary made abroad and laid down in this country, exclusive of duty, is $21.79. Rates suggested (on American valuation). Rosaries and chaplets of whatever material composed, valued at not more than $1.25 per dozen, 15 per cent ; valued at more than $1.25 per dozen, 30 per cent ; any of the foregoing if made in whole or part of gold, silver, gold plate, silver plate, precious or imitation precious stones, 50 per cent. The words "and similar articles of religious devotion" in H. R. 7456 should be omitted, as the phrase would be made to compre- hend a large variety of articles which have under all previous tariff laws been assessed under various paragraphs at varying rates of duty. Great difficulties will arise in determining what articles come within the scope of " similar articles of religious devotion." Remarks. It is stated in the brief that the duty of 30 per cent on rosaries valued at more than $1.25 per dozen is not a sufficient pro- tection for rosaries and chaplets made in whole or in part of gold, silver, gold plate, silver plate, or precious or imitation precious stones. Beads in imitation of precious stones, which form a large part of the raw material, have been raised from 35 to 45 per cent and imitation DIGEST OF TARIFF HEARINGS, H. R. 7456. 503 precious stones to 45 per cent. Rosaries assessed for duty under paragraphs 333 and 167, act of 1913, at 50 per cent, have been pro- vided for in H. R. 7456 at 30 per cent. PARAGRAPH 1447 ; ALSO PARAGRAPHS 1660, 1685, AND 1688 OF SCHEDULE 15. CHURCH STATUARY. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. John J. Kirley, representing manufacturers of church statuary. The Association of Domestic Manufacturers of Church Statuary. (Brief.) FAVORING LOWER DUTIES : The Frederick Pustet Co. (Inc.), New York City. (Brief.) Hearings : Pages 4250-4256. Witness : Mr. John J. Kirley, representing manufacturers of church statuary. Costs and selling prices. In Germany the present scale of wages is about 20 per cent and the cost of materials about 40 per cent those prevailing in the United States. The market price ranges from $85 to $100 for a 5-foot statue of "rich" or "extra rich" decoration, varying according to the com- ponent material or the value of the decoration used. American casters and cleaners or finishers are paid $6 ; flesh painters $7.20; drapery painters and free-hand workers $6.40, in each case per 8-hour day. German casters, cleaners, and finishers are paid $1.12 a day; flesh painters $1.44 a day; drapery painters and free-hand workers $1.28 per day. A brief submitted by the importers includes the following table, showing the cost of production of a 5-foot church statue cast, tech- nically known as a religious cast of sculpture, painted and decorated. Domestic. Foreign.! Labor, including preparing mold, pouring in and removing, casting, ratine; making cases, packing, and shipping Inishing, deco- $30.20 14.58 16.04 5.83 Materials, including casting plaster, fiber, nondextrin oils, turpentine, paints, gold Prime cost 44.78 30.20 2.24 11.87 6.04 .35 Overhead expense, including rent, salaries, commissions, heating, gas, light, ex- Loss and collections (3 per cent) 77.22 18.26 50.00 If a duty of 50 percent of the American valuation ($100) is imp amount to jsed, this will The total cost of a domestic article as compared with a foreign statue "Mark of value 2 cents. Size of industry. The industry is an important one and is carried on in New York. Chicago. St. Louis, Boston, Philadelphia, Mil- waukee, Pittsburgh, and Dubuque. It employs hundreds of men in a skilled occupation in which no machinery is used. In the year 1920 upward of 10,000 religious statues were cast and sold by domestic manufacturers, including statues over 1 foot high up to a height of 6 feet. The yearly value of the product is upward of $2,500,000. 504 DIGEST OF TARIFF HEARINGS, H. R. 7456. Rates suggested. Fifty per cent on American valuation instead of 15 per cent as provided for in paragraph 1447. So far as the provisions of paragraph 611 (par. 1660. H. R. 7456) and of para- graph 655 (par. 1688. H. R. 7456) of the tariff act of 1913. which are applicable to statuary and casts of sculpture, are concerned, it is recommended that these provisions remain unchanged. It is urged that no further exceptions be made to the levying of duty upon statuary, letting down the bars to further importations of articles free of duty. Remarks. Under the tariff act of 1913 the article is admitted free of duty when it is to be used for art educational purposes only (par. 611) and when it is a work of art imported expressly for presenta- tion to national institutions, etc. In other cases the article is duti- able at 35 and 40 -per cent ad valorem if the chief component part is earthenware (par. 79) and at 25 per cent ad valorem if the chief component part is plaster of Paris (par. 369). The product is not a work of art in any sense of the word. Xeither the original creation, the glue model, nor the final mold as cast and decorated is recognized by art schools or art authorities as a work of art. They are properly classified as trade articles, the products of a factory or workshop, similar to the classification given to profane statuary and other articles cast from stock molds. Witness: The Frederick Pustet Co. (Inc.). Xew York City. (Brief; no appearance at hearings.) Costs and selling prices. In a brief of the American Manufac- turers of Church Statuary, filed with the Ways and Means Commit- tee (p 4051, Tariff Information 1921), the bare cost of manufacture in the United States is given as $77.22 for a 5-foot statue in " extra- rich'* decoration. This cost, according to the brief, does not include interest on principal or capital or profit of any kind. A copy of invoices from the Deprato Statuary Co., of Chicago, to the witness's company is inclosed. The following are the prices shown in the invoices: Price, net. 1 statue St. Joseph and child. No. 258, 5- foot ere:' in and gold, extra rich $63.70 1 statue St. Teresa. Xo. 1185, 5-foot, extra rich 63.70 The price includes careful packing in excelsior and a strong case f. o. b. Chicago. (The price does not cover pedestals or brass plates, for which the invoice shows a net charge of $42.) It is stated that the Munich Statuary Co.. of Milwaukee, furnishes the witness's company 5-foot statues of St. Joseph with child. Xo. 261. in extra-rich decoration, for $76.80. from which price a discount of 30 per cent is allowed. A sheet of the Deprato Statuary Co., showing list prices of certain church statuary, is inclosed. Rates suggested. A fair duty might properly be imposed on im- ported church statuary, but it would not be right materially to in- crease the rate of duty on such goods on the basis of representations which have been made to the Ways and Means Committee. Witness : The Association of Domestic Manufacturers of Church Statuary. (Brief; no appearance at hearings.) Costs (md selling prices. When the tariff act of 1913 was enacted the scale of wages in the industry in the United States was less than DIGEST OF TARIFF HEARINGS, H. R. 7456. 505 one-half of that now maintained. Similarly, the cost of materials has more than doubled. The present scale of wages in Germany is about 20 per cent of that obtaining in the United States, and the cost of materials is-about 40 per cent. The market price ranges from $85 to $100 for a 5-foot statue of "rich" or "extra-rich" decoration. The price varies according to the component material or the value of the decoration used. The item of labor forms a large percentage of the cost of produc- tion, as shown in this table : COMPARATIVE LABOR COSTS. \ German wages. American wages. Marks, i Dollars. Dollars. Casters, per hour 1 0.14 14 0.75 75 Flesh painters, per hour 9 .18 .90 Drapery painters, per hour Free-hand workers, per hour 8 8 .16 .16 .80 .80 Mark taken as equivalent to 2 cents. COST OF PRODUCTION, 5-FOOT CHURCH STATUE, CAST. Foreign. Domestic. Labor, including preparing mold, pouring in and removing, casting, finishing, decorating, making ca^es, packing, and shipping Materials, including casting plaster fiber, iron, desterine oils, turpentine, paints, $6.04 5 83 $30.20 14.58 Prime cost Overhead expense, including rent, salaries, commissions, heating, gas, light, expense* of salesmen (100 per cent of labor cost) 11.87 6.04 44.78 30.20 Loss on collections (3 per cent) .35 2.24 18 26 77.22 Size of industry. The industry is carried on in several of the large centers, namely, New York, Chicago, St. Louis, Boston, Phila- delphia. Milwaukee, Pittsburgh, and Dubuque. In 1920 upward of 100,000 religious statues were cast and sold by domestic manufacturers, including statues over 1 foot high up to 6^ feet. The average sale price per statue is $25. The total yearly value is upward of $2,500,000. Rates suggested. A duty of 50 per cent ad valorem, based on American valuation. A duty of at least 250 to 300 per cent would be required if based on the valuation of the imported article or on its cost to manufacture abroad. No change is desired with respect to paragraphs 1660, 1685, and 1688, but it is recommended that no further exceptions be made in the direction of lowering the bars to the further importation of arti- cles free of duty. Remarks. These products are not works of art ; art schools or art authorities do not recognize them as such. They are trade articles, the products of a factory or workshop, the same as other articles cast from stock molds. 506 DIGEST OF TARIFF HEARINGS, H. R. 7456. PARAGRAPH 1449. LEAD PENCILS. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Mr. Frank W. Lilley. representing the Joseph Dixon Crucible Co. and others. FAVORING LOWER DUTIES : Mr. X. Bilder, representing A. W. Faber (Inc.). Hearings : Pages 4263-42X0. Witness : Mr. Frank W. Lilley, representing the Joseph Dixon Crucible Co. and others. Costs and selling prices. A Castell pencil used to be laid down at 60 marks, equivalent to about $10, per gross, but there was a com- mission or discount off that. To-day that pencil is sold at 60 marks, with the mark at one-half cent, or about 30 cents. The German Government adds to that an export duty of 550 per cent, making the price $1.80 per gross. Pencils are being sold in Tokyo at 35 cents per gross, as against $1.25 by Mr. Lilley's concern. The graphite in the Japanese pencil is not as good as in the American pencil. German pencils are being sold in New York all the way from 85 cents to $1.70 per gross, as against $2.50 to $2.90 per gross for the American pencil. Size of industry. Four thousand or five thousand hands are em- ployed in the industry. Rates suggested. No change is desired in the present bill (H. R. 7456). Would be willing to accept the provisions of the Payne- Aldrich bill. Remarks. Senator Smoot having questioned the statement that lead pencils could be sold in Germany for 60 marks, 30 cents, as that would not cover the cost of the graphite or cedar, the witness stated that the Japanese imitate the marks of the American pencils to the smallest details. In a brief filed by the witness (pp. 4269-4270) the effect of pre- vious tariffs is reviewed, particularly as enabling importers, A. W. Faber especially, to import large quantities of pencils from Germany at prices against which American manufacturers were powerless to compete. Contradicting statements made by A. W. Faber, the brief affirms that pencils imported by that concern were undervalued ; the records in the New York customhouse are cited as confirming that statement. The brief discusses relative prices of various pencils and gives the present labor cost in Germany as $2.40 per week. Hearings : Pages 4257-4263. Witness: Mr. N. Bilder, representing A. W. Faber (Inc.). Costs and selling prices. The witness discussed the effect of the proposed tariff on the cost of a pencil costing in a foreign port $1.40 per gross The duty of 25 per cent ad valorem per gross would amount to $0. 35 Specific duty per gross _. . 50 Imprint other than the manufacturer's name .50 Total__. . 1. 35 DIGEST OF TARIFF HEARINGS, H. R. 7456. 507 which is 275 per cent higher than the present duty of 36 cents per gross and nearly 100 per cent of the original cost. The effect of the tariff on a popular brand, with tip, costing $2 per gross in a foreign port, was detailed as follows : Cost of pencil $2.00 25 per cent duty . 50 Name other than manufacturer's .50 Specific fluty . 50 Rubber tip . 25 3.75 Cost of insurance and freight .15 Importer's cost, total 3.90 A pencil of a similar type is sold by the American manufacturer for $3.60 per gross. Size of industry. The pencil industry of this country is con- trolled by four manufacturers. They control 95 per cent of the pen- cil industry, the other 5 per cent being in the hands of approximately four other manufacturers. In 1919 exports of pencils amounted to $3,565.347 and in 1920 to $3,849,221. Imports in 1920 amounted to $225,578, being less than 6 per cent of the exports and doubtless less than 1 per cent of the domestic business. Rates suggested. The present law (1913) adequately protects the American manufacturer. If the industry should be given a further protection not to exceed 15 cents per gross, then the iniquitous, dras- tic, and absolutely business-destroying features of the cumulative provisions of the proposed law should be eliminated. If the cumu- lative duties on caps or protectors, on pencils prepared for caps or protectors, and on pencils stamped with names other than the manu- facturers is written into the law, the importer will be legislated out of business and the existing " big four " control of the industry will continue. PARAGRAPH 1449. MECHANICAL PENCILS. FAVORING PROPOSED OR HIGHER DUTIES : The Wahl Co., Chicago, 111. (Brief; no appearance at hearings.) Costs and selling prices. The Eversharp pencil, which retails at $1 and wholesales at 50 cents, forming 60 per cent of the total sales of the Wahl Co., costs $0.5757, of which $0.3413 is labor, direct and indirect, and $0.2324 is material. The cost to a German manu- facturer, assuming that he pays the same for his materials, would be $0.2893. A German pencil is offered at 50 marks, equivalent to-day to about 50 cents. A similar Eversharp pencil retails for $1.75, wholesales at $1.05, and costs the American company $0.93 to manufacture, of which $0.47 is labor and $0.46 material. Rates suggested. H. R. 7456 provides specifically for mechanical pencils in paragraphs 352 and 1449. The former applies to those made of base metal, and not plated with gold, silver, or platinum, a duty of 45 cents per gross and 20 per cent ad valorem; the latter applies to mechanical pencils, n. s. p. f., a duty of 50 cents per gross and 25 per cent ad valorem. Under the act of 1913, mechanical pencils 508 DIGEST OF TARIFF HEARINGS, H. R. 7456. were dutiable under the jewelry paragraph, 356, at 60 per cent ad valorem. In view of the specific provisions of the proposed bill, the question is raised whether these pencils would be dutiable under the basket clause of paragraph 393 at 45 or 35 per cent, or under paragraph 1428 at 55 per cent. If the mechanical pencils now in general use, plated with gold, silver, or platinum, should be held to be dutiable under paragraph 1449 at 50 cents per gross and 25 per cent ad valorem, the protection would be entirely inadequate. It is suggested that enameled pencils, which compete with the plated ones, should be specifically covered in the tariff act. The brief pro- poses the following as to classification and rates. [It fails, however, to cover mechanical pencils made of precious metals.] Mechanical pencils made of base metal and not plated with gold, silver, or platinum, or not enameled or not colored with gold lacquer, whether partly or wholly manufactured, 45 cents per gross and 25 per centum ad valorem. Mechanical pencils made of base metal and plated with gold, silver, or platinum, or enameled or colored with gold lacquer, whether partly or wholly manu- factured, 50 per centum ad valorem. PARAGRAPH 1450. REFILL LEADS. FAVORING PROPOSED OR HIGHER DUTIES : The Wahl Co., Chicago, 111.' (Brief.) M. A. Ferst (Ltd.), Atlanta, Ga. (Brief.) Witness: The Wahl Co., Chicago, 111. (Brief; no appearance at hearings.) Costs and selling prices. The Wahl Co. sells its refill leads in metal boxes containing 12 pieces of lead, If inches long and forty-six one-thousandths o^f an inch in diameter. The retail price is 15 cents and the wholesale price 9 cents per box. or $1.08 per gross of leads. Rates suggested. The following is suggested as the phrasing and rates for paragraph 1450: Pencil leads not in wood or other material, 6 cents per gross; leads not ex- ceeding six one-hundredth* of 1 inch in diameter and commonly known as refills, 10 cents per gross of lead* J indies or lex* In Irnuth and 10 cent* addi- tional per yross for each 1% inches or fraction thereof additional length; col- ored, copy, or indelible leads, 60 cents per gross of leads 2 inches or less in Icnfftli and 30 cent ft additional per gross for each inch or fraction- thereof addi- tional length; and, in addition thereto, on all the foregoing, 20 per centum ad valorem. Remarks. The brief calls attention to the diameter of the leads mentioned in the bill. This diameter of six one-thousandths of an inch has no particular significance. The lead in an Eversharp pen- cil is forty-six one-thousandths of an inch in diameter. The brief states that under the present wording of paragraph 1450 a foreign manufacturer may send leads into this country in lengths of 4 or 5 inches, pay the tax per gross, and then cut them off to the commercial length of If inches. A gross of leads 5| inches long will make 4 gross If inches long. Ninety-five per cent of refills are 1 inches long. The commercial length of indelible and colored leads is 2 inches. DIGEST OF TARIFF HEARINGS, H. R. 7456. 509 Witness: M. A. I^erst Co. (Ltd.), Atlanta, Ga. (Briefs; no ap- pearance at hearings.) Attention is called, in a letter, to a typographical error in the House bill, regard ing* refill leads. The diameter of such leads should be sixty one-thousandths and not six one-thousandths of an inch. Rates suggested. In a more extended communication (pp. 4270-4271) it is urged that paragraph 1450 be changed to read as follows : Pencil leads not in wood or other material, 7^ cents per gross and 25 per cetit ad valorem ; thin leads, small-diameter leads, not exceeding 0.060 inch diameter and li inches in length, or refills for American pencils, 10 cents per gross and 30 per cent ad valorem. Attention is drawn to the relative rates of wages in Germany (5 cents per hour for the average laborer) and in America (35 cents), representing a difference in cost of 6 cents per gross. On colored copy or indelible leads the duty should be at least 75 cents per gross plus 25 per cent ad valorem, the cost of the particular dye, in America, being from four to five times as much as in Germany. PARAGRAPH 1451. PHOTOGRAPHIC GOODS. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES ON CAMERAS: The Ansco Co. (Brief.) FAVORING PROPOSED OR HIGHER DUTIES ON RAW FILMS (SENSITIZED BUT NOT EXPOSED) : Mr. P. A. Powers, representing Powers Film Products Co. Mr. Charles H. Cole, representing Bay -State Film Co., Eastman Kodak Co., and two others. Mr. Jules E. Brulatonr. (Brief.) The Ansco Co. (Brief.) FAVORING PROPOSED OR HIGHER DUTIES ON FINISHED PRODUCTIONS (FILM EX- POSED, DEVELOPED OR UNDEVELOPED; POSITIVE PRINTS) : Mr. Paul M. Turner, representing Actors' Equity Associat'on. Mr. John Emerson, representing independent producers. The Powers Film Products (Inc.). (Brief.) The Actors 1 Equity Association. (Brief.) FAVORING LOWER DUTIES ON FILM (SENSITIZED RUT NOT EXPOSED), FILM EX- POSED (DEVELOPED OR UNDEVELOPED), AND POSITIVES: Mr. Frederick R. Coudert, representing Pa the Film Co. Mr. Saul E. Rogers, representing National Association Motion Picture In- dustry. Mr. Edward F. Colladay. indorsing Mr. Rogers's presentation. Mr. G. S. McFarland, representing International Film Service. Mr. William A. Det'ord. representing International F 1m Service. Mr. S. F. Hartman, repres<>nt : ng Universal Film Manufacturing Co. Mr. Daniel R. Forbes, representing Seneca Camera Co. The Internat'onal Newsreel Corporation. (Brief.) Republic Laboratories (Inc.). (Brief.) Claremont Film Laboratories (Inc.). (Brief.) Coudert Bros., representing Pa the Film Co. (Brief.) Memorandum from the Belgian Ambassador. Washington, transmitted to the Finance Committee by the Secretary of State. Photographic cameras : Witness: The Ansco Co.. Binghamton, X. Y. (Brief: no appear- ance at hearings.) Cost* and selling prices. Labor enters so largely into the cost of making cameras that the American manufacturer can not success- 510 DIGEST OF TARIFF HEARINGS, H. R. 7456. fully compete with foreign makers, particularly the German. Ger- man and English cameras are again coming into this country in in- creasing volume and at the present rate of duty they can undersell the American product. Rates suggested. An ad valorem duty of 45 per cent will result in fair competition and provide a substantial revenue. Motion picture films sensitized but not exposed : Hearings : Pages 4342-4350. Witness: Mr. P. A. Powers, representing Powers Film Products Co., New York,.N. Y. Costs and selling prices. Cost in 1920, $2.11 per 100 feet ; selling price Powers, $2.40 ; Eastman, $2.52. Selling price now of domestic film, $2.25 ; of German film (in this country) , $1.75. Comparability. German film costs Mr. Powers $0.90, and the costs of manufacturing domestic film is now $2 per 100 feet. Rates suggested. Three-fourths of a cent per foot on positive and \\ cents per foot on negative film, sensitized but not exposed. Remarks. The witness began manufacturing film in 1918, and was able to compete with and undersell the Eastman Co. He was forced to close his plant in 1921, however, because of the competition of German films. The Eastman Co. has also cut down production, and the Eagle Rock Co. has closed down. Since closing his plant Mr. Powers has been importing film from Germany which he can now purchase at $0.90 per 100 feet and sell in this country at $1.75. He is importing between 250,000 and 500,000 feet a week all he can obtain now but he is promised de- liveries by July of 5,000,000 feet per week. He prefers to manufac- ture film here and can do so in competition with the Eastman Co. and other domestic manufacturers if he is afforded protection from the German product. Photographic and moving-picture films, sensitized but not exposed : Hearings : Pages 4309^329. Witness: Mr. Charles H. Cole, representing Bay State Film Co., Sharon, Mass. : Ansco Co.. Binghamton, N. Y. : Eastman Kodak Co., Rochester, N. Y.; Powers Film Products Co., Rochester, N. Y. Costs and selling prices. The cost of production of American-made films in 1921 was $1.92 per 100 linear feet ; the estimated cost of Agfa (German) film was $0.776 per 100 feet. The selling price of Amer- ican film is $2.25 per hundred, while the selling price in Germany of Agfa film is $0.92 to $1 per hundred. The witness cited specific instances of German film laid down in New York at $1.31 per hun- dred and $0.94 per hundred, and a quotation of German film laid down in New York at $1.20 per hundred. Average cost of domestic labor was $4.80 per day. Size of industry. Five companies in the United States are engaged in manufacturing moving-picture film, with a total investment for plants and equipment not suitable for other purposes of approxi- mately $50,000,000. Mr. Cole states that the total production of film in the'United States last year was " between 700,000.000 and 800,000,000 linear feet. Imports for last three months have been at the rate of 240,000,000 feet a year. Comparability. The domestic companies fear competition chiefly from the Agfa Film Co., a German company controlled by the Ger- DIGEST OF TARIFF HEARINGS, H. R. 74-56. 511 man Chemical Trust. The detailed cost of producing 100 feet of film in this country and the estimated cost in Germany are as follows : Ger- many. United States. Celluloid Silver nitrate, gelatin and chemicals Labor and manufacturing expense Overhead .102 .510 Total.. Rates suggested. Not less than three-fourths cent per linear foot on positive film sensitized but not exposed, and not less than 1^ cent per linear foot on negative film sensitized but not exposed. The witness stated that he preferred a specific duty, but if this were not granted he would suggest an ad valorem duty of 35 per cent on American valuation or 50 per cent on foreign valuation. Remarks. The witness filed briefs with letters and invoices in substantiation of the prices on German films quoted by him. He states that unless increased duties are provided, the Agfa Film Co., controlled by the German Chemical Trust, will acquire the en- tire American market for unexposed film and dominate the motion- picture industry. This company now has a monopoly in Germany, Austria, and the central states of Europe, and is doing an immense volume of business in England, Italy, and Scandinavian countries. The duty which the witness requests would not prohibit the im- portation of foreign films. It would still permit the importation of such films and their sale at a profit, but it would enable the Ameri- can manufacturer to compete on a more even basis. The Eastman Kodak Co. denies that increased duties would per- mit that company to monopolize the industry and increase prices. It states that it has no intention or desire to do this, but rather to encourage the industry and enlarge production, and states that with the rates suggested it could not raise prices and compete with Ger- man film. The witness further stated that two American companies are not now able to manufacture film and sell in competition with the for- eign film, and have therefore discontinued manufacturing. Witness: Mr. Jules E. Brulatour. (Brief; no appearance at hear- ing.) Costs and selling prices. Foreign manufacturers can easily pay a duty of 20 per cent and still undersell American manufacturers. The brief states that the writer, who formerly sold foreign films exclu- sively, was able to pay the duty of 25 per cent imposed by the Payne- Aldrich tariff, plus freight, insurance, and all other charges, under- sell the American manufacturer, and still make the enormous profit of one-half cent per foot. The prices at which film imported into this country is placed in consular invoices are : [Cents per linear foot.] From Belgium 2. 02 From France From England 1. 53 From Germany : 1. 07 512 DIGEST OF TARIFF HEARINGS, H. R. 7456. The German Agfa Co. is flooding this market with its film and is actually offering to accept contracts here at 1.67 cents per foot de- livered. Size of industry. There are five domestic manufacturers engaged in the production of this film. Rates suggested. The ad valorem duty of 20 per cent in the pend- ing bill to be maintained. Attention is called to an inconsistency in the present tariff act, namely, that sensitized film is admitted free of duty while the cellu- loid base of motion picture films is dutiable at 40 per cent. Film sensitized, but not exposed : Witness: The Ansco Co., Binghamton, X. Y. (Brief; 110 appear- ance at hearings.) Rates suggested. Photographic film sensitized, but not exposed or developed, should carry a duty of 30 per cent ad valorem. In a lettei* dated November 7, 1921 (nearly nine months later than the brief), developments are said to have shown that a duty of 30 per cent will be inadequate. Remarks. The photographic-film industry was created by the genius of an American. The patent owned by the Ansco Co. expired in 1915. This country would have been flooded with importations of photographic films had it not been for the war. Motion-picture films, exposed but not developed: exposed and de- veloped; positives, prints, etc. (finished productions) : Hearings : Pages 4288-4300. Witness: Mr. Paul M. Turner, representing the Actors' Equity Association. Costs cmd selling prices. Pictures which cost $20,000 to $30,000 to produce in Germany are bringing returns here of $300,000 to $400,000. Size of industry. Capital invested between $150,000000 and $200,000,000; 250,000 people connected with industry; 10,000 men and women actually in the production end (acting, etc.). Comparability. Motion pictures can be produced in Germany for about iO per cent of the cost of production here. " Passion " is esti- mated to have cost $30,000 to produce in Germany. It was sold to the American buyer for $7,000, and brought in ab'out $400.000. To produce it in this country would have cost about $400,000. Rates suggested. Fifty to sixty per cent ad valorem. Rema.rJcs. Mr. Turner stated that the subject would be divided between Mr. Emerson and himself. He is requesting a high duty on the finished motion-picture pro- ductions in the interest of the people employed in the domestic indus- try who are dependent on American productions for their liveli- hood. The salaries of the actors are not high on the average. The largest portion. 80 per cent, composing what is known as the crowd. take very small parts in the picture. They are paid about $10 when they work, which averages, over a period of a year, about $5 a day. Sixteen per cent form the small-act class, who play parts of com- v parative importance. Their pay averages, over a year, about $45 a week. The remaining 4 per cent are the higher-paid actors. A tVw of these, but only a few, may be said to be overpaid. DIGEST OF TARIFF HEARINGS, H. R. 7456. 513 The result of foreign pictures being brought into the country will be to displace American-made pictures, which means decreased do- mestic production and unemployment for those connected with American production. The American producers will not produce here, but will transfer their activities to foreign countries, and uss foreign actors. With reference to the statement of Mr. Rogers that only a few foreign pictures have been suitable for presentation here. Mr." Turner filed a list of 54 foreign pictures which had been exhibited during the past few months. As regards a retaliatory tariff on our exports of pictures, he stated that the only countries that could be considered in this connection would be Germany, France, and Italy, the pro- ducing countries. Motion-picture films, exposed but not developed ; exposed and de- veloped; positives, prints, etc.: Hearings : Pages 4300-4308. Witness: Mr. John Emerson, representing independent producers. Rates suggested. Fifty per cent to sixty per cent ad valorem. Remarks. Mr. Emerson states that he speaks for himself and Mr. David Griffith, as independent producers of motion pictures. Other independent producers are in favor of a higher tariff, but are not openly advocating it for fear of antagonizing the larger pro- ducers who control the distribution of their pictures. The effect of foreign films was first felt about a year and a half ago. At that time there were 208 companies working in Xew York and Los Angeles and now there are only 83, a decrease in a year and a half of 60 per cent. The demand 'from theaters for pictures has not fallen off 60 per cent, only comparatively few theaters being closed. The large producing companies are not in favor of a duty on fin- ished productions because they have determined . upon, and are. in fact, in process of transferring their production activities to foreign countries. With an American star and director they can produce abroad cheaply, and, with free entry of the films, send them here for exhibition at the highest possible price. Discontinuance of pro- ducing here will not affect the exhibition, as the large companies con- trol the organizations which handle the distribution of pictures. Among them they practically control the theaters of the country and can dictate the prices at which the pictures can be sold. One company, the Famous Players-Lasky. has reduced the num- ber of companies in their Los Angeles studio from 10 to 3, and closed entirely their Xew York studio. They have opened studios in Lon- don, Berlin, and India and are planning one in France. The Fox Co. are producing in Italy. Their New York studio has been reduced from 6 companies to 3, and in Los Angeles from 12 companies to 4. If this item is retained on the free list the industry will be trans- ferred entirely to Europe, the American workers will be deprived of a livelihood, the Government will get nothing, and the public will not benefit through lower costs. The witness does not believe retaliatory duties will be imposed. Two countries have already placed duties on films, but these duties are for revenue purposes and not as a matter of retaliation. He states, however, that even if the foreign market were entirely closed 514 DIGEST OF TARIFF HEARINGS, H. R. 7456. to American films and, the American market closed to foreign films, the home market is ample to permit of payment of decent salaries and afford the producers a handsome profit. The duty requested is not prohibitive, but it would serve to pro- tect domestic producers. Witness: The Powers Film Products (Inc.), New York, X. Y. (Brief; no appearance at hearings.) Remarks. Advocates of the free entry of moving pictures who appeared before the committee represented men who are producing pictures in Germany. They are closing American studios in order to transfer the production of pictures to Europe. On the other hand, those who appeared before the committee to advocate a tariff on sensitized film and on moving pictures were practical men in the business, operating on their own money, while those on the other side, who claimed to represent the entire moving picture industry, represented in reality a combination of associated interests. The combination has imported the greatest number of German pictures during the past two years, and has accumulated in this country a large number of pictures obtained at ridiculously low prices. Witness: The Actors' Equity Association, New York, N. Y. (Brief; no appearance at hearings.) Kates suggested. If the industry in the United States is to sur- vive, the provisions in the Fordney tariff must be retained. Remarks. The letter refers to two inclosed clippings, taken from the New York Times of September 1 and October 2, 1921. The former is a news item relating to the action of the Federal Trade Commission in issuing a formal complaint against the Famous Play- ers-Lasky Corporation and 11 others, on the ground that they repre- sent a combination and conspiracy to secure control and monopoliza- tion of the motion-picture industry of the country. The second clipping, referring to the film industry in Germany, states that there are about 1,600 film companies in that country and that the cost of production is about half of what it is in England and one-sixth of that in America. Motion-picture films, sensitized but not exposed : Hearings : Pages 4331-4342. Witness: Mr. Frederick R. Coudert, representing Pathe Film, 2 Rector Street, New York. Size of industry. The motion-picture industry, in 1920, paid taxes, outside of excess profit and income taxes, amounting to $87,000,000. The production of raw film by one domestic company amounted to 800,000,000 linear feet per year." Rates suggested. Motion-picture film, sensitized but not exposed, free. Remarks. The interest represented by Mr. Coudert is opposed to a duty on films sensitized but not exposed on the grounds that such duty w r ould strengthen the grip that the Eastman Co. now has on the raw film market, permit of increased prices by that company, and even permit of its controlling the motion-picture industry of the DIGEST OF TARIFF HEARINGS, H. R. 7456. 515 country through control of the raw film ; that it would not result in increased revenue to the Government, as such revenue as might be received from importations would not compensate for the loss due to decreased income and excess profit taxes from the motion picture companies ; and that the domestic film manufacturing industry would not be hurt by allowing these films to enter free of duty. To support his contention that the Eastman Co. is a monopoly, Mr. Coudert cited the case of United States v. Eastman Kodak Co. and others (United States District Court, Eastern District, N. Y., Aug. 24, 1915.) He further stated that the Eastman Co. manu- factures more than 90 per cent of the domestic film, is able to export large quantities, and in 1920 made a profit, after paying income and excess profits taxes, of $18,000,000 on a $25,000,000 capitalization. He believes that the few small domestic competitors of the East- man Co. would not be hurt with raw film admitted free, as the labor item is insignificant, the manufacture being almost entirely me- chanical, and the materials which enter into the film being more easily obtainable and cheaper here than abroad. Another reason advanced by Mr. Coudert was the possibility of retaliation, which he feared would not only be directed against American raw film, but also against American motion-picture pro- ductions. He stated that the company which he represents, Pathe, is an American corporation. Photographic goods, motion-picture films, etc. : Witness : Mr. Saul E. Rogers, representing the Fox Film Corpora- tion and the National Association Motion Picture Industry, New York City. Size of industry. The American motion-picture industry is the fifth or sixth in point of size in the country. Employees number between 250,000 and 300,000. Raw film : Manufactures amount to around 1.200,000,000 linear feet per year ; domestic consumption is about 900,000,000 linear feet. Comparability. Finished productions : American productions dom- inate the domestic and foreign markets. Eighty to eighty-five per cent of films exhibited in foreign countries are produced in America. Foreign pictures generally are not suited for American audiences, about 10 out of 350 imported during the past three years having been found suitable. Raw film (sensitized but not exposed) : The Eastman Co. in the United States produces between 90,000,000 and 100,000,000 feet per month: three other domestic companies produce small amounts. Pathe (France) produces about 2.500,000 feet per month; the Belgian company about 5.000,000 feet (half of which is used at home) ; and the Agfa Co. (Germany) about 9.000,000 feet (half of which is used in Germany and most of the remainder exported to this country). Rates suggested. Motion-picture films exposed but not developed, 2 cents per linear foot ; exposed and developed, 3 cents per linear foot ; positives, imported for use with moving-picture exhibits, 1 cent per linear foot. Raw films, sensitized but not exposed, free. 516 DIGEST OF TARIFF HEARINGS, H. R. 7456. Remarks. With regard to retaining the present duty on the fin- ished production films exposed but not developed, exposed and de- veloped, and positives Mr. Rogers testified, in effect, as follows : The imposition of an ad valorem duty would result in retaliatory duties by foreign countries, thus jeopardizing the foreign market for American films; the American producer would be compelled to go abroad to produce in order to enter the European market on equal terms with the foreign producer: the American consumer would be compelled to pay a higher price if the standard is to be maintained ; the tariff is unnecessary and would produce small revenue, the num- ber of foreign productions imported having been small and not hav- ing made any material inroad in the American market. It is fronTthe foreign business that the profit is derived, the pro- ducers counting on the home market only for amortization of produc- tion cost and a very small profit. With retaliatory duties barring American films from other countries, thus destroying the foreign market, or at best making it a speculative one, it would be necessary to obtain both the profit and the amortization of production cost from the market in this country, that is, by passing the burden on to the consumer the public. The alternative to this would be to lower the standard of production, which would mean losing the dominant posi- tion now held and, consequently, the opportunity for foreign films to come in and outstrip the domestic industry. Practically all the manufacturers of motion pictures in the country are opposed to an ad valorem duty, and so far as can be discovered only one independent producer (Mr. David Griffith) is in favor of it. Mr. Rogers filed clippings with the committee to show that the fear of retaliatory duties is well founded. He also stated that the industry has been served with a protest by the Canadian Motion Picture Distributors' Association against an increased tariff, stating that Canada will follow in the footsteps of Great Britain in bringing about retaliation. This protest was also filed. On the subject of retaining on the free list films sensitized but not exposed, Mr. Rogers gave the following testimony : The only object that would be served by a duty on raw film would be to help the Eastman Kodak Co. to maintain their monopoly on this article. This company at present controls between 95 and 98 per cent of the American market and a large part of the foreign market. Prior to the entry of foreign films the company could dic- tate any price it desired, but with foreign competition the price has fallen. The profits of the Eastman Co. are still tremendous, both at home and abroad. The laboratory men, who are the chief users of raw film, had ap- peared before the Ways and Means Committee and submitted a brief by Mr. Tom Evans in which every laboratory joined. This brief opposed the imposition of a duty on raw film and pointed out that the laboratories were in danger of being forced out of business by the Eastman Co. In order to bring these laboratories under their con- trol the Eastman Co. acquired three laboratories which they threat- ened to open and operate unless the other laboratories purchased their supplies of stock from the Eastman Co. As a result a contract was made under which the laboratories agreed to limit their pur- chases to Eastman stock, and the Eastman Co. agreed not to open DIGEST OF TARIFF HEARINGS, H. R. 7456. 517 their laboratories, with the proviso that as soon as there was any evidence of departure from this plan the Eastman Co. would open them and go into competition with the other laboratories, undersell them in the market, and practically force them out of business. As soon as this contract was completed the laboratory men withdrew the brief they had filed with the committee and withdrew every remark they had made against the Eastman Co. A copy of the brief referred to was filed by Mr. Rogers (p. 4285). Film sensitized but not exposed : Hearings : Pages 4329-4331. Witness: Mr. G. S. McFarland, International Film Service, Bos- ton, Mass. Kemarks. Mr. McFarland stated that he would answer a question asked by Senator McLean as to the amount of protection to American labor under the proposed rate. He stated that the cost of labor to the Eastman Co. in sensftizing the films is about $500,000 a year, about 0.1 of 1 cent per foot. This, he contends, is insignificant. He did not know the total cost of production per foot. Motion-picture films, sensitized but not exposed : Hearings : Pages 4350-4354. Witness: Mr. William A. Deford. representing International Film Service (Inc.) and International Xewsreel Corporation. Size of industTry. Eastman produces about 100,000,000 feet a month. Powers produces about 1.200.000 feet a month. Bay State produces about 1,200.000 feet a month. Eastman employs about 500 wage earners. Rates suggested. Motion picture films, sensitized but not exposed, free: negatives of news pictures, free. Remarks. The Eastman Co. has practically a monoply on the domestic business, and under the proposed duty would be able to fix and set exorbitant prices. Protection is not needed, as for- eign competition is now largely speculative and not a real menace. Without this competition the' Eastman Co. will have the entire motion picture industry in its grip, as it will have control of the basic product, and heretofore it has used such power to obtain con- trol. The witness states that the Allied Film Laboratories (Inc.). an organization of independent laboratories, appeared before the Ways and Means Committee to oppose the proposed duty on raw films. When they had done this the Eastman Co. purchased two or three operating laboratories and told the Allied Laboratories (Inc.) that if they continued the opposition to the proposed duty the Eastman Co. would put them out of business, which they could do by operat- ing laboratories in competition. As a result a contract was entered into by these laboratories and the Eastman Co. (Sept. 20, 1921), and the laboratories have discontinued their opposition. The Eastman Co. does not need protection from a labor standpoint, as their employees number only about 500. The witness 'also requested that pictures of foreign news events be permitted free entry. If they were held for appraisal they would lose their news value. 77134_22 34 518 DIGEST OF TARIFF HEARINGS, H. R. 7456. Motion picture films, exposed but not developed ; exposed and de- veloped; positives, prints, etc.: Hearings : Pages 4308-4309. Witness: Mr. Siegfrid F. Hartman, representing the Universal Film Manufacturing Co. Rates suggested. Free list. Remarks. The witness stated that the Universal Film Co. has no intention of transferring its production activities abroad, and that their plant is now being utilized at very near its full capacity. They do not want a duty on finished pictures, as they fear retaliatory duties, and the receipts from foreign exhibition represent their profit. Roll films for hand cameras : Hearings : Pages 4354-4357. Witness: Mr. Daniel E. Forbes, representing the Seneca Camera Co. Rates suggested. Free. Remarks. The witness speaks in reference to film rolls such as are used in the ordinary hand camera, and which have no relation to motion-picture films. His company manufactures cameras, not films, but in order to keep the cameras on the market must furnish films for them. They can not obtain films from the film manufac- turers on terms permitting of retail competition with films for other cameras and have therefore been importing films from England. If they can not furnish films for their cameras on the same basis as films offered for other cameras, their cameras will not sell. The film they import does not undersell the domestic film. It is made in England on celluloid exported from this country. News films: Witness: The International Newsreel Corporation. (Brief; no appearance at hearings.) Rates suggested. Imported topical films should be exempted from the propsed tariff duty of 30 per cent ad valorem on motion-picture negatives and positive prints. The duty as applied to topical films would -not afford protection for an American industry, because American news-reel producers themselves use the imported product. Most of the imported topical film is received by American news-reel producers in exchange for American topical films. The revenue would be small, as the total importations of this class of films do not exceed 3,000 to 4,000 feet per week. The imposition of an ad valorem duty would result in delays in- cident to appraisals, seriously impairing the value of the imported product. Remarks. " Topical films " are meant to cover motion pictures devoted to representations of actual current events and containing no pictorial matter whatever. Films sensitized but not exposed: Witness: Republic Laboratories (Inc.), New York, N. Y. (Brief; no appearance at hearings.) Rates suggested. Raw film stock to be retained on the free list. Remarks. It is stated that the Eastman Kodak Co., which now controls over 90 per cent of the motion-picture film printed in this DIGEST OF TARIFF HEARINGS, H. R. 7456. 519 country, will be continued as a monopoly if raw film stock is not permitted to come into this country free of duty. The Eastman Co., through Mr. Jules E. Brulatour, its sole agent, is building large laboratories to compete with the independent labora- tories at prices and on terms which the latter can not meet. Films sentitized but not exposed : Witness: Claremont Film Laboratories (Inc.), New York, N. Y. (Brief; no appearance at hearings.) Remarks. The fact of the matter is that if this duty (20 per cent ad valorem) is placed upon foreign raw stock it places the labora- tories entirely at the mercy of the Eastman Kodak Co. That com- pany has already invaded the laboratory field with plants capable of printing more film than is necessary for the entire needs of the country, and is now quoting prices at approximately what the raw stock costs. If a duty is placed on the stock, the independents can not compete with the Eastman laboratories. The producers of pictures make one negative and the prints are made in the laboratories. If the Eastman Co. secures a monopoly of the laboratory work, it will be in a position to dictate any price it wishes. Films sensitized but not exposed : Witness : Photostat letter of the Erbograph Co., New York City, to the Pathescope Co. of Canada (Ltd.), transmitted to the Finance Committee by Coudert Bros., counselors at law, New York, N. Y. Remarks. The photostat letter states that the Erbograph Co. would be unable to supply the Pathescope' Co. of Canada with prints on Pathescope stock, as; it was necessary for the former company to become a party to an agreement calling for the exclusive use of American-made film. This letter is given as evidence to support the charge that the Eastman Co. is seeking to eliminate foreign com- petition and to secure complete control of the American market. Filmq sensitized but not exposed : Witness: Memorandum from the Belgian ambassador, Washing- ton, transmitted to the Finance Committee by the Secretary of State. Remft.rks. The firm L. Gevaert & Co., of Vieux Dieu, Belgium, through Mr. Louis Destenay, director of the Gevaert Co. of Amer- ica (Inc.). states that if the high tariff of 30 per cent should be im- posed on this product the American company will, as a result, be unable to import in the future and that they would as a consequence be obliged to cease purchasing celluloid from the American Cellu- loid Co. The point is made that the German and French film manufacturers export to the United States a product that is entirely foreign, while the Gevaert Co. of Belgium exports a procluct that is. in origin 70 per cent American. Considering the very high percentage of Amer- ican material entering into the product the Gevaert Co. should benefit by the drawback tariff, namely, that the prospective tariff should apply only to that ad valorem quota pertaining to the Belgian percentage value, viz. approximately 30 per cent of the total value of the finished product. 520 DIGEST OF TARIFF HEARINGS, H. R. T4o6. PARAGRAPH 1452. PIPES AXD SMOKERS' ARTICLES. WITNESS, AND INTERESTS REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES : Witness: Mr. Leopold Demuth, representing W. M. Detnuth Co., New York City. Hearings : Pages 4357-4358. Rates suggested. Approves of paragraph 1452 as written. Re- quests that articles enumerated in paragraph 403 (brier root or brierwood, ivy, or laurel root, etc.) be placed on the free list, as there is no substitute found in this country. (NOTE. Mr. Demuth's statement that these articles were free prior to the present tariff act overlooks the fact that they were dutiable under the Payne- Aldrich Act.) PARAGRAPH 1454. THERMOSTATIC BOTTLES. WITNESSES. FAVORING PROPOSED OR HIGHER DUTIES : The Simplex Vacuum Manufacturing Co., Philadelphia, Pa. (Brief.) Manufacturers of thermos and vacuum bottle products. (Brief.) Witness : The Simplex Vacuum Manufacturing Co., Philadelphia, Pa. (Brief; no appearance at hearings.) Costs and selling prices. The brief includes the following table : Comparison of prices. German Simplex wholesale quotation, quotation. G erman No. Simplex No. c. i. f. Baltimore or Jan. 1 to Since New York. May 31. June 1. No. ,lpint No. , 2 pints No. , 1 pint No. ,2pints 100 101 404 405 JO. 21 I 81. 37J 2. 12J i.3 2. 374 81. 124 1.75 1.37i 2.00 No. ,lpint j 406-C .48 2.00 1.75 No. 7, 2 pints No. 8, 1 pint, refill.... 407-c 414 .78 .13 2.874 .87$ 2.50 .75 No. 8, 2 pints 415 .22 1.25 1.00 At these prices an average net profit of 10 per cent can be made under normal conditions. Orders are being taken by the company at an extra 10 per cent discount off these prices ; that is, at actual cost, in order to keep the plant going and the organization intact. A fuller description of the product is given in an attached memo- randum. Remarks. A copy of a letter addressed to the company by E. A. Krieger and Friedeberg, Berlin, Germany, is attached, in which the foreign concern solicits trade. Hearings : Pages 4363-4365. Witness: Manufacturers of thermos and vacuum bottle products. (Brief of Mr. William B. Walker; no appearance at hearings.) Comparability. The brief includes a table contrasting detailed German and domestic costs of the bottle commanding the largest sale DIGEST OF TARIFF HEARINGS, H. R. 7456. 521 in this country, with the German mark taken at approximately one- half cent. The final averages of the 13 included items work out at 9.2 cents for the German and 101.1 cents for the American article. Rates suggested. The brief discusses at length the operation of various tariff rates and shows that a specific duty of 33 to 57 cents, plus 60 per cent on the foreign selling value, will be needed to prevent the closing of United States plants employing approximately 5,000 persons. On American valuation the total duties to be assessed would range from 43 to 72-J cents per bottle, according to size. PARAGRAPH 1457. WHITE BLEACHED BEESWAX. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED OR HIGHER DUTIES: Witness: Mr. R. J. Mayer, representing the Theodor Leonard Wax Co. Hearings: Pages 4292-4297. Costs and selling prices. Germany is delivering this material at an average price of 23 cents a pound. The crude material costs the Theodor Leonard Wax Co. from 23 to 24 cents. The American product can not be made and put on the market for less than about 36 cents a pound. An extract from copy of invoice, page 4292, of Araujo & Co., Lisbon, to E. A. Bromund & Co., New York, shows the following prices : E. B. 1/20-20 cases with guaranteed, pure shredded white beeswax: G. W. Kilos, 1.310; Tare, Kilos, 294.7. N. W. Kilos, 1,016 at pounds, 2,240, at 2 1/2 c., dollars $481.60.' Rates suggested. A duty of either 20 per cent ad valorem on American valuation or 30 per cent ad valorem on foreign valua- tion, based on 'the supposition that the crude beeswax will be re- tained on the free list. Remarks. K brief previously filed with the Committee on Ways and Means explained why white bleached beeswax should be placed on the dutiable list and not in the free list with crude beeswax. Details of the processes of manufacture were also given. SCHEDULE 15. FREE LIST. PARAGRAPH 1504. AGRICULTURAL IMPLEMENTS, AND PARTS or. WITNESSES, AND INTERESTS REPRESENTED. FAVORING HIGHER DUTIES : The North Wayne Tool Co., of Hallowell, Me. (Brief.) Mr. Finley P. Mount, representing manufacturers of agricultural imple- ments. Mr. William K. Payne, representing manufacturers of scythes, corn cut- ters, etc. The Rixt'ord Manufacturing Co., East Highgate, Vt. (Brief.) MARKING PROVISIONS (CANADA) : The Garden City Feeder Co., Pella, Iowa. (Brief.) Witness: The North Wayne Tool Co., of Hallowell, Me. (Brief; no appearance at hearings.) Attention is directed to the pledges of the Republican Party ap- pearing on the back page of the Republican 1920 campaign text- book, as follows: 522 DIGEST OF TARIFF HEARINGS, H. R. 7456. The Republican Party reaffirms its belief in the protective principle and pledges itself to a revision of the tariff as soon as conditions shall make it necessary for the preservation of the home market for American labor, agri- culture, and industry. It is asserted that, in the Fordney tariff bill, this pledge means only a plank on which to get into office, for American manufacturers of scythes, sickles, grass hooks, corn knives, etc., get not one particle of protection on their products. If the company's factory has to shut down, or to diminish the market for American labor, a sign will be made of this pledge, to hang on the front door. Protection is demanded against cheap foreign labor, sufficient to meet the difference in wages and exchange. Hearings : Pages 4367-4370. Witness: Mr. Finley P. Mount, representing Manufacturers of agricultural implements. Costs and selling prices. The wages and overhead charges in the production of agricultural implements are practically the same in Canada as in the United States. Canadian threshing machines and other agricultural implements are shipped into the United States. By reason of the adverse exchange rate that has always prevailed, the Canadian manufacturer is able to get substantially that much more profit on his importations into the United States than the American manufacturer gets on his into Canada. Comparability. The witness understands that more than 90 per cent of all importations of agricultural implements are from Canada. American manufacturers must pay on agricultural implements ex- ported from the United States into Canada 17-J per cent duty and an additional importation tax of 1 per cent. In the Canadian market, the Canadian manufacturer therefore enjoys the advantage of this duty against the American manufacturer. He undersells the Ameri- can manufacturer in the Canadian market, and with the exchange advantage can undersell him in the United States. Agricultural implements shipped to the United States free, prin- cipally from Canada, for the 11 months ending as follows : Nov. 30, 1918 $664.327 Nov. 30, 1919 3,077,617 Nov. 30, 1920 5, 550. 561 Specifically, the most marked increases in agricultural implements shipped from Canada to the United States, duty free, are as follows : 1918 1919 1920 $72 854 $40,886 $125 875 (ream separator .. ....... 12,861 5,085 437,222 p it* t 7,120 12,257 78,714 7.154 6,686 19,675 15,847 77,574 670, 695 14,716 17,529 1,597,498 Years ending Mar. 31 Rates suggested. The tariff laws of the United States should be placed on a reciprocal basis with those of Canada, in so far as they DIGEST OF TARIFF HEARINGS, H. R. "7456. 523 relate to the importation into either country, by the other, of the manufactured products referred to above. The farm machinery manufacturers of the United States believe that common fairness entitles them to ask for this reciprocal duty. The Canadian manu- facturer does not undersell the American manufacturer in the United States, but he makes a larger profit on goods shipped into the United States, and with this profit is enabled to, and does, undersell the American manufacturer in Canada. Hearings : Pages 4371-4372. Witness : Mr. William K. Payne, representing manufacturers of scythes, corn cutters, etc. Costs and (telling prices. The cost of manufacturing a dozen scythes in the United States is $10.50. The freight to the jobber is 50 cents and, with a profit of 14 per cent, these scythes cost the jobber, delivered, $12.50 per dozen. Comparability. Importers are freely offering competitive scythes of Swedish manufacture delivered for $9.50 per dozen. Scythes of Austrian manufacture are coming in at $9 per dozen delivered. The same approximate relation exists between the American and the competing foreign selling prices of sickles, grass hooks, and corn knives. Kates suggested. Scythes, sickles, grass hooks, and corn knives to be restored to the dutiable schedule with a duty of 35 per cent ad valorem, and the general provision for all other agricultural implements, if left on the free list to be so amended as to exclude these small hand cutting tools. Remarks. The industry enjoyed a protective tariff until the Act of 1913 placed its products on the free list under the provision for " all other agricultural implements of any kind and description, whether specially mentioned herein or not." This paragraph was framed for the purposes of giving the farmer some relief from the high prices he was obliged to pay for expensive farm machinery, which it was felt were caused by a more or less monopolistic control of the production of tillage and harvesting machinery. Whether or not this feeling was justified, and whether or not the remedy sought has been effective, the witness submits that scythes and kindred hand cutting tools have no place in this paragraph. The average cost of a scythe to the farmer, who uses it for from 5 to 10 years, is insignificant, and the free importation of foreign scythes could not reduce his yearly expenses by more than 5 cents under the most favorable calculation. While the scythe is generally thought of as one of the farmer's tools, the fact is that he is not the chief user of it. By far the largest users of scythes are the rail- road companies, which use them in keeping down the grass on their narrow right of way. Witness: The Rixford Manufacturing Co., East Highgate, Vt. (Brief; no appearance at hearings.) Comparability. The company had a considerable shock in ex- amining the Fordney tariff bill to note that it carried no duty on scythes from foreign countries. The company had expected that the old duty of 35 per cent, which was in effect until the Wilson administration went into power, would at least be reestablished. They had hoped for a 40 per cent duty, because, even with the old 524 DIGEST OF TARIFF HEARINGS, H. R. 7456. duty, the company was forced to meet damaging competition from Austria; scythes are manufactured in that country at a cost with which it is absolutely impossible to compete. Austria's low labor and material costs afford an opportunity to sell scythes in this country at such a low figure that every American manufacturer will find himself forced either to shut down his factory or operate it at a loss. Rates suggested* The company urges that the tariff bill be amended in such a manner as to include a duty of at least 35 per cent on foreign scythes. This demand is a real necessity to the wel- fare of an industry which at best is far from remunerative. Witness: The Garden City Feeder Co., Pella, Iowa. (Brief; no appearance at hearings.) Remarks. Attention is directed to the provisions in the Canadian tariff relative to the marking requirements on imported goods. It is requested that H. B. 7456 be scrutinized, to the end that relief may be obtained from Canadian provisions requiring the marking of machine parts imported into that country from the United States. PARAGRAPH 1504. SUGAR MACHINERY. WITNESS, AND INTEREST REPRESENTED. FAVORING HIGHER DUTIES : The American Tool & Machine Co., Hyde Park, Boston, Mass. (Brief; no appearance at hearings.) Costs and selling prices. Labor costs are much lower in Scot- land than in the United States. Size of industry. The American Tool & Machine Co., employs normally about 500 men, nearly all of whom are skilled mechanics; it pays about $600,000 a year in wages. In 1911 the company's business amounted to over $690,000 and in 1912 to slightly less than $595,000, over 62 per cent of which was sugar machinery. Rates suggested. A rate of 45 per cent ad valorem is requested to enable the domestic industry to obtain a fair share of the Ameri- can business and to enable American manufacturers to compete in the Cuban market. Remarks. In 1911 and 1913, orders which should have been placed here went to Watson Laidlaw & Co., Scotland, because of lower prices. As evidenced during the recent war, the equipment of the do- mestic industry is well suited to the manufacture of powder ma- chinery and of tools required in the production of various war sup- plies. PARAGRAPH 1509. CRUDE OR NEEDLE ANTIMONY. WITNESSES, AND INTERESTS REPRESENTED. FAVORING HIGHER DUTIES : Mr. G. C. Riddell, representing the Wah Chang Trading Corporation. REQUESTING RECLASSIFICATION : Mr. Martin T. Baldwin, special attorney, office of the assistant attorney general. New York. (Memorandum. ) Hearings : Pages 4372-4374. Witness : Mr. G. C. Riddell, representing the Wah Chang Trading Corporation. DIGEST OF TARIFF HEARINGS, H. R. 7456. 525 Size of industi^y. The United States must, in the main, continue to import its antimony supplies, the natural deposits of this country being deficient. It 'is further an absolute certainty that the bulk of the antimony supply of the world must continue to come from the Chinese deposits. Rates suggested. The present act carries a duty of 10 per cent ad valorem on antimony metal and other products of antimony, but in H. R. 7456 one of* these products, called needle or liquated anti- mony, is transferred to the frejp list, while the duty on antimony metal is increased. Paragraph 376 retains antimony metal on the dutiable list at H cents per pound. It is suggested that the differ- ential between antimony metal and antimony " crude, liquated or needle." should be $ cent per pound. If the metal is to be dutiable, as in paragraph 376, at 1| cents per pound, " crude " or " needle " should carry 1 cent per pound, and paragraph 376 should be revised to read as follows : Antimony as rej?ulus or metal and alloys thereof, in which antimony is the constituent of chief vnlne, 1 cents per pound; antimony a.s crude, needle, or- liquated, 1 cent per pound. To have needle or liquated antimony on the free list would have the following results: It would eventually completely eliminate, the importation of the 7,000 to 12,000 tons of antimony metal and oxide now brought into this country annually. It would give the* four or five firms that are in the antimony refining business a monopoly. The needle or liquated form of antimony can very easily be made into either antimony metal or oxide, and it would be this form of antimony that would become, under the new bill, the article of commerce a commodity which would be shipped here from China for conversion into metal or oxide. There would be the loss of the revenue from the importation of the product known as " needle liquated, or crude" antimony, and at the same time the long estab- lished Chinese smelting industry would be virtually ruined, to no useful purpose. Witness : Mr. Martin T. Baldwin, special attorney, office of the assistant attorney general, Xew York. (Memorandum.) Paragraph 1509 of the House bill provides in the free list for " antimony ore and needle or liquated antimon} 7 , but only as to the antimony content. " Mr. B'aldwin suggests that the phrase "but only as to antimony content ," does not seem applicable to " needle or liquated antimony. *' That product consists only of sulphur and antimony (sulphide of antimony), and sulphur is itself free under paragraph 1662. PARAGRAPH 1510. ARCHIL LIQUID. WITNESS, AND INTEREST REPRESENTED. FAVORING HIGHER DUTIES: Mr. Maurice Landin. representing the Boreal Chemical Co., New York City. (Brief; no appearance at hearings.) Size of industry. Seven hundred thousand pounds of this extract, including cudbear, a by-product, were imported in 1920. A few 526 DIGEST OF TARIFF HEARINGS, H. R. 7456. American manufacturers know how to produce this, but European competition prevents it. Rates suggested. A small duty. Remarks. This is an extract of the archil weed. A small duty would start an American industry and be a source of revenue. PARAGRAPH 1513. SULPHIDE OF ARSENIC. WITNESS, AND INTERESJ? REPRESENTED. FAVORING HIGHER DUTIES : Mr. Henry M. Eakin, representing manufacturers of the State of Wash- ington. Hearings : Pages 4374-4376. Size of industry. The interests represented by the witness own deposits of arsenic sulphide, developed equipped for production, but at present inoperative. The arsenic content averages 140 pounds to the ton. Rates suggested. Five cents per pound on red arsenic, to meet the competition of artificial arsenic sulphide from Europe. Remarks. There is an opportunity here to produce a superior product a nonpoisonous pigment of the finest quality. PARAGRAPH 1514. AMERICAN MERCHANDISE RETURNED AFTER HAV- ING BEEN EXPORTED. The Merchants' Association of New York. (Brief; no appearance at hearings.) Remarks. The association urges the elimination of that portion of paragraph 1514 which restricts the free importation of returned American merchandise to that imported by or for account of the person by whom it was exported from the United States* In so doing, the brief refers to the movement of merchandise in the ordi- nary course of business, and not to the extraordinary conditions which have arisen as the result of the sale of large quantities of war materials in France. Some of this has been returned to the United States and distributed in this country at a price underselling the American market. That situation, temporary in nature, could readily be provided for by separate emergency legislation applicable only to this class of merchandise. Instances are constantly occurring in which exported American merchandise must be brought back to the United States by persons other than the shipper. In cases where an American shipper has gone out of business, and where the foreign customer refuses to accept the merchandise, the domestic bank or others, not being the shipper, who would become the actual owners of the merchandise could not import the goods free of duty under the provisions of the paragraph in question. DIGEST OF TARIFF HEARINGS, H. R. 7456. 527 PARAGRAPH 1515. ASBESTOS (CRUDE). WITNESS, AND INTEREST REPRESENTED. FAVORING HIGHER DUTIES : Hon. Henry F. Ashurst, United States Senator from Arizona, representing asbestos producers. Hearings: Pages 4377-4381. Size of industry. Known for more than 2,000 years as a heat in- sulator, the use of asbestos has greatly increased during the last half century. To-day a capital of over a hundred million dollars is in- vested in an industry employing over 20,000 workers and having an annual turnover equal to the capital. It was stated by a witness be- fore the Committee on Ways and Means that $8,000,000 worth of wooden shingles were replaced in 1920 by asbestos shingles. C&mparabdity. The great labor advantage enjoyed by European manufacturers in regard to Avages is supplemented by their control of the second largest asbestos deposits in Rhodesia and South Africa, where the raw asbestos is produced by Kaffir labor at an average wage of 25 cents per day. Rates suggested. A flat duty of at least 20 cents per pound on all asbestos ore and fiber. Remarks The absence of iron from the Arizona asbestos makes it a surer nonconductor of heat, thus adding to its value for fire- protection purposes. PARAGRAPH 1517. JUTE BAGGING FOR COVERING RAW COTTON. WITNESSES, AND INTERESTS REPRESENTED. FAVORING HIGHER DUTIES : Mr. Julius Werner, representing Mente & Co., New Orleans, La. Mr. James W. Mansou, representing Young & Metzner, Long Island City, N. Y. Hearings : Pages 4381-4383. Witness : Mr. Julius Werner, representing Mente & Co. Size of industry. In the past the independent bagging manufac- turers, whom the witness represents, have supplied about one-half of all the bagging used for covering the American cotton crop. With the two largest American bagging firms, whose combined output is equal to one-half of the domestic production, moving their plants to India, it is only a question of time when all the bagging will be im- ported and independent domestic bagging producers will be forced to close their factories. Rates suggested. Paragraph 1008, relating to jute cloths, to re- main as it is, and paragraph 1517, relating to bagging, to be stricken out. If this is done both bagging and burlap will be dutiable at 1 cent a pound. Bagging under H. JR. 7456 is free of duty. Remarks. A duty on bagging is requested on account of two of the American manufacturers moving their plants to Calcutta. These two companies have appeared in all tariff hearings in the past, re- 528 DIGEST OF TARIFF HEARINGS, H. R. 7456. questing a duty on bagging ; this year they have not appeared. It is requested that the duty on bagging be the same as that applied on other jute cloths; namely, 1 cent per pound. The point should be emphasized that a duty of 1 cent per pound is the minimum that will afford the necessary protection. The rate of six-tenths of 1 cent per square yard afforded in the acts of 1897 and 1909 will not now be sufficient, owing to an advance of over 100 per cent in labor rates and because a large amount of the imported bagging will weigh 4 pounds to the square yard, instead of 2 pounds as formerly. Six-tenths of 1 cent per square yard is only about one-eighth of 1 cent per pound and would furnish no protection against the American firms now located in India. While burlap, bagging, and steel ties for tying up cotton bales are all on the free list in the act of 1913, they were all dutiable in the Republican tariffs of the past. In H. R. 7456, however, bagging is the only one of the three articles on the free list. Hearings : Pages 4383-4393. Witness: Mr. James W. Manson, representing Young and Metz- ner, Long Island City, N. Y. Costs and selling prices. A pay roll, including both Indian and white labor, of an English jute mill located in Calcutta shows their pay for a week of 72 hours to have averaged $1.38 per operative. The wages paid to corresponding classes of workers in American jute mills range from $24 to $30 per week. Two to two and and one-half Indian laborers are equal in efficiency to one American. Indian mills can buy raw jute in India at about 1 cent per pound. Freight charges and cost of manufacturing bagging causes the present price of domestic bagging to amount to about 8 cents per yard. Size of industry. Out of a normal cotton crop requiring about 60.000,000 yards of bagging, the- independent manufacturers, in- cluding those making bagging from raw sugar bags, supply a total of 25,000,000 yards. The plant of the witness, located in Long Island City, has a value of about $1,000,000. Comparability. Bagging made from bags purchased in this country from Cuban sugar refiners is cheaper material than domestic bagging. The sugar bags are made in India, exported to Cuba, filled there with raw sugar and exported to this country. The five firms here represented clean these bags, cut them up, and sew them into bagging for covering raw cotton. There has never been a time during the past thirty years when the witness's company could not have sold twice its output. Sugar bag cloth is very popular with farmers and ginners, much more so than the new bagging made in this country from imported jute butts. Remarks. The two large American companies are now going to Calcutta. They will buy Indian material, their labor will be Indian, and the money expended will remain in India. They will be under no such labor regulations and under no such taxation as the dome-tic producers still operating in this country. Every dollar the domestic bagging producer expends, remains in the United States. DIGEST OF TARIFF HEARINGS, H. B. 74-36. 529 PARAGRAPH 1520. BIBLES. WITNESSES, AND INTERESTS REPRESENTED. FAVORING HIGHEK DUTIES : Mr. C. F. Hint, representing the John C. Winston Co., Philadelphia. Pa. The National Publishing Co. (Brief.) Hearings : Pages 4393-4396. Witness: Mr. C. F. Kint. Size of industry. The firm manufactures and publishes nearly 500 styles of Bibles, in addition to general publications. Com payability. American Bibles are mainly produced in New York and Philadelphia. The Philadelphia concerns are all con- trolled by American capital ; the New York concerns are either con- trolled by English capital or they have English affiliations, the Oxford University press, for example. On the basis of direct in- formation from London the witness gave present printers' and binders' wages in London as $21.25 per week, as compared with his firm's wages of $44 to $49.50 for printers and $34 to $43.50 for binders practically double the English rates. The margin of profit in Bibles has always been small. Witness: The National Publishing Co. (Brief: no appearance at hearings.) Rates suggested. The company objects to Bibles being placed on the free list. This would work great injury to publishers who print and bind all their Bibles in the United States. In addition to the labor cost in Great Britain being about half of the cost in America, American publishers import considerable paper upon which they have to pay a duty of 10 per cent plus, which makes the cost o'f production much higher in America. If Bibles are placed on the free list, it will set up unfair competition. PARAGRAPH 1523. BTSMUTH. WITNESS, AND INTEREST REPRESENTED. FAVORING HIGHER DUTIES : . Mr. William Loeb. jr.. representing the American Smelting & Refining Co. Hearings : Pages 4396-4397. f'osts and selling prices. Bismuth is produced in the United States entirely as a by-product. The cost of production depends upon the percentage of each operation which is charged against bismuth as compared with the other products recovered from the smelting operations. The cost of production can, therefore, be stated only approximately, as each company's figures are influenced by their accounting methods. The highest cost of production for the year 1920 was $2.14 per pound. It is believed that the cost of production will be materially lowered during the latter part of 1921 and thereafter, and it is hoped to bring it down to approximately $1 per pound. The cost of foreign production is unknown, but must be low. due to the working of high-grade bismuth ores containing from 25 per cent to TO per cent bismuth. When these figures were made up, the 530 DIGEST OF TARIFF HEARINGS, H. R, 7456. market price was from $1.35 to $1.40 per pound. With the present high rate of exchange, the price is about $1.55 to $1.60 per pound. As bismuth is produced as a by-product only, and is contained in substantial quantities in various lead ores, the United States should conserve its raw material assets by encouraging smelters to recover this valuable material. There is every reason to believe that the domestic production can be increased to take care of the domestic consumption. Rates suggested, A specific duty of 25 cents per pound on refined bismuth metal, in order to protect American producers against foreign low-cost producers. Bismuth salts and preparations are dutiable at 25 per cent ad valorem as against a former protection of 10 per cent ad valorem. The witness suggests that the duty on bismuth salts and other preparations be changed to 20 cents per pound, plus 25 per cent ad valorem, because 0.8 of a pound of bismuth is used in manufac- turing 1 pound of the usual bismuth salt; hence, 0.8 of 25 cents per pound would give 20 cents per pound additional protection for each pound of bismuth salts. PARAGRAPH 1527. BONES. SUGGESTING REVISION OF PARAGRAPH : Baugh & Sons Co., Philadelphia, Pa. (Brief; no appearance at hearings.) See hearings before Ways and Means Committee (pp. 3529- 3530), in which this and other firms describe the following terms as properly listing the materials referred to : Bones, crude, whole, crushed or ground, bone meal, steamed bone, calcined bone, and bone dust, crude bone ash, also spent or discard bone black. These constitute raw materials and should, as such, be on the free list. PARAGRAPHS 1529-1532. EDUCATIONAL BOOKS. WITNESS. FAVORING LOWER DUTIES. Mr. M. L. Raney, librarian of Johns Hopkins University, Baltimore, Md. Hearings : Pages 4398-4401. The witness submitted a brief objecting to the provisions of H. E. 7456, dealing with English books more than 20 years old, foreign- language books, school textbooks, and immigrants' books if valued at more than $250. The potential effect of these provisions is dis- cussed at length and a contrast is drawn between them and the regula- tions in force in other countries. " The Old World is virtually of one opinion on this business." As regards the effect on libraries, it is pointed out that a great in- crease in clerical work will be entailed by the affidavit provisions. It is urged that the typothetse, lithographers, and bookbinders who favor the provisions of the bill have a worthy 'dm but a mistaken notion of the way to obtain it. The brief sets forth the language necessary f ^ effect the changes regarded as necessary. DIGEST OF TARIFF HEARINGS, H. R. 7456. 531 PARAGRAPH 1531. RELIGIOUS BOOKS. WITNESS, AND INTEREST BEPBESENTTX FAVORING PROPOSED DUTIES: Rev. M. J. Curley. (Brief; no appearance at hearings.) Rates suggested. The witness desires that all books of a religious character used by the laity or the church, printed either in English or in a foreign language, especially such books as are used by the Catholic faith, be placed on the free list. PARAGRAPH 1539. CADMIUM. WITNESSES. FAVORING HIGHER DUTIES : The American Smelting & Refining Co. The Grasselli Chemical Co., Cleveland, Ohio. (Brief.) Hearings : Pages 4396-4397. Witness : The American Smelting & Refining Co. Costs and selling prices. Cadmium being a by-product, the cost of production, as figured by the producing company, depends en- tirely upon what proportion of each operation is charged against this particular by-product as compared with other by-products or major metals. So far as the witness can now ascertain, the highest cost of pro- duction figured by any of the principal producers was $1.172 per pound for 1920 arid $1.69 for 1921. Other costs will range below these figures, down to somewhat less than $1 per pound. In 1920 the United States produced 129,283 pounds. The average sale price was $1.17 per pound. Comparability. The German cost is unknown, but as German producers are pressing sales at as low as 75 cents per pound their cost is probably extremely low. This is substantiated by the general knowledge that all German products produced from 100 per cent German raw materials and labor are ridiculously low, as a result of the depreciated mark currency. Cadmium is used in very small quantities in a variety of ways, chiefly in alloys. Rates suggested. As a by-product industry, cadmium should be protected so that the raw material resources of the country shall not be wasted. A specific duty of 25 cents per pound is suggested. Remarks. In a pamphlet on cadmium (United States Geological Survey. Mineral resources of the United States, 1920), it is estimated that 600 short tons of cadmium accumulate annually in the various plants in this country arid is not recovered as metallic cadmium. In other words, only about one out of every ten tons of recoverable cadmium is actually recovered. Cadmium sulphide carries an ad valorem rate of 25 per cent under the pigment section; a duty on cadmium metal would therefore be quite consistent. Witness : The Grasselli Chemical Co., Cleveland. Ohio. (Brief ; no appearance at hearings.) Costs and selling prices. Cadmium metal is now quoted at from $1 to $1.10 per pound: cadmium sulphite (paragraph 63) at $1.15 to 532 DIGEST OF TARIFF HEARINGS, H. R. 7456. $1.25 per pound. No figures as to market prices of cadmium sulphate and cadmium hydrate are given. Size of industwj. There are five producers of metallic cadmium in the United States. Production increased from 26,152 pounds in 1911 to 207,408 pounds in 1917. For the period 1916 to 1920, inclusive, the average annual consumption of cadmium metal was about 127.000 pounds, while the capacity for production is about 350,000 pounds. In 1911, the United States production of cadmium sulphite was 2.392 pounds, increasing to 22,723 pounds in 1914 and to 51,702 pounds in 1918. This last figure was doubtless in excess of consumption, since production in 1919 and 1920 was only 31,197 pounds and 32.133 pounds, respectively. Comparability. The production of cadmium metal in Germany increased from 82,000 pounds in 1915 to 236,000 pounds in 1918. No figures are available as to the German production of cadmium sul- phite, but prior to 1914 Germany exported both products to the United States. Rates suggested. Since the domestic producing capacity exceeds consumption, protection is asked to enable the American industry to keep on equal terms with Germany. Cadmium metal, cadmium sul- phite, cadmium sulphate, cadmium hydrate, and all chemical com- pounds and mixtures containing cadmium should be grouped in one paragraph and made dutiable at the specific rate of 25 cents per pound. PARAGRAPH 1540. ACETATE OF LIME. WITNESSES. FAVORING HIGHER DUTIES : Ten chemical companies, Will'amsport, Pa. (Brief: no appearance at hear- ings.) Rates suggested. Seventeen and one-half per cent ad valorem, same as the Canadian duty. Remarks. Free entry of acetate of lime and charcoal would result in the shutting down of the wood chemical industry in Pennsylvania ; adequate protection for these articles is requested. PARAGRAPH 1541. CASH REGISTERS. WITNESSES, AND INTERESTS REPRESENTED. FAVORING HIGHER DUTIES : Mr. H. A. Savage, representing the American Cash Register Co.. the St. Louis Cash Register Co., and the Michigan Machine Co.. the three so- called independent cash-register companies in the United States. The St. Louis Cash Register Co., St. Louis, Mo. (Brief.) Hearings : Pages 4404-4413. Witness: Mr. H. A. Savage (as above). Costs and selling prices. German manufacturers have quoted 6 rices very much below the actual cost of production in this country, etail prices vary from $40 to $650 for the cash registers made by the companies represented by the witness. 'Comparability. Prior to the issuance of an injunction against the National Cash Register Co., that company sold cash registers of cer- tain competitive models at a price below the cost of production and DIGEST OF TARIFF HEARINGS, H. R. 7456. 533 made up its loss on other models not manufactured by competitors, these models being sold at a very high price, with resulting large profits. This was done to stifle and throttle competition in the united States, and the means used were highly successful. The National Cash Register Co. now has a factory in Germany, and its cash registers are known as the Anker brand. Germany has very recently increased the duty upon cash registers from 20 marks to 1,200 marks per 100 kilograms. Size of industry. There are now employed by the cash register companies in the United States between 20,000 and 25,000 men. Hates suggested. The witness asks for a 25 per cent ad valorem duty for the following reasons: To secure revenue; to protect the great mass of American merchants against a monopoly; to protect domestic labor against the cheaper foreign labor; and to protect American capital invested by manufacturers, other than the National Cash Register Co., in the. cash register industry. Witness : The St. Louis Cash Register Co., St. Louis, Mo. (Brief ; no appearance at hearings.) Size of industry. The witness's company has $225,000 invested; manufactures 15 models; and employs, in normal times, more than 150 skilled mechanics. Comparability. The brief refers to the much lower cost of mate- rial and labor, and the highly appreciated value of the United States dollar, in foreign countries, the United States thus offering a very advantageous market for foreign manufacturers. As a concrete instance, the Anker Cash Register Co. of Bielefeld", Germany, man- ufactures many styles of what are believed to be cheaply constructed cash registers, and have already appointed representatives in the United States. The St. Louis 'company also understands that a subsidiary of the Krupp Gun Works, of Essen, Germany, may very soon enter the American market with a very complete line of cash registers, to be sold at a very low price. The representative of the Anker Cash Register Co. lays great stress upon the fact that the United States has imposed no import duty on cash registers, and this, combined with the lower cost of German labor and material, makes it possible for his company to very much undersell the American manufacturers. Prices already quoted f. o. b. New York were so low that the St. Louis company could not hope to compete with them and survive. If these German- made cash registers can enter this country duty free, they can most surely be sold at a price that will completely destroy the business of the St. Louis company and two or three other independent manufac- turers. fiates suggested. The Dominion of Canada imposes a 30 per cent, ad valorem import duty, and Mexico a duty of 30 cents per kilo approximately 15 per cent of the cost on American made goods OP cash registers. Neither Canada nor Mexico has a cash register in- dustry to protect. In view of the higher wages paid to American workmen, and the increased cost of material in the United States, the company suggests a 40 per cent ad valorem duty on cash register" and cash-register parts, whether completed or in any stage of pro- cess or assembly, and including also wood (and) or metal bases and wood (and) orWtal cash drawers. 7713422 35 534 DIGEST OF TARIFF HEARINGS, H. R. 745G. PARAGRAPH 1541. SEWING MACHINES. * WITNESSES, AND INTERESTS REPRESENTED. FAVORING HIGHER DUTIES : Mr. H. M. Huffman, representing the independent family sewing-machine manufacturers of the United States. .Mr. Lucius X. Littauer, representing the Metropolitan Sewing Machim Corporation. Mr. John W. Orin, representing the Johnson Shuttle Co. The Sewing Machine Manufacturers' Association. (Brief.) FAVORING PROPOSED DUTIES : Dubrow & Hearne, importers of machinery and supplies, chiefly frou Germany. (Brief.) Hearings : Pages 4413^417. Witness : Mr. H. M. Huffman, representing the independent f amilj sewing-machine manufacturers of the United States. Costs and selling prices. The increase in the labor cost over the prewar period is roughly 120 per cent, and reductions have been only about 20 per cent, leaving the cost just about double the prewar. Labor is the controlling factor in the cost of the family sewing machines, being 62J per cent of the total. German wages approxi- mate but 12 per cent of the wages paid American workmen in the same trades. The ordinary family sewing machine sells at from $30 to $75. The $75 machine is sold with high selling expense ; the factory cost would run about $40. The differential in American labor and German labor is reflected in recent quotations of standard Ger- man sewing machines offered f. o. b. Hamburg, boxed, and export duty paid, at 30 per cent less than the actual cost of labor and ma- terial alone in comparable American machines. There are 25 such German sewing-machine factories; large quantities of Singer for- eign-made machines are being sold on the American market, and at no saving to the American consumer over the price of the American- made article. Size of industry. The independent family sewing-machine man- ufacturers represent an aggregate capital investment of over $18,- 000,000. Their sales at wholesale value in the year 1919 amounted to' $13,500,000. Workmen employed directly in production of that output number 8,300 in addition to those engaged in distribution service and the fabrication of material. Wages paid approximate $7,500,000 annually. Comparability. Shortly after the passage of the Underwood bill, in 1913, the German manufacturers, numbering two and one-half times the number of American, with one and one-half times the out- put, instituted a campaign for business in this country. But for the intervention of the war, they would have supplanted American family sewing machines and ruined the American industry, owing to their ability greatly to undersell American manufacturers in the American market by reason of the much lower cost of production. Germany and Scotland, which are the two great producing nations of sewing machines, were prevented from exporting by reason of the war. This left the market open to American manufacturers, who exported sewing machines during that period in large quanti- ties. Exports increased from $7,793,718 in 1918 to $12,751,268 in DIGEST OF TARIFF HEARINGS, H. R. 7456. 535 1920. but dropped to $6.209,925 for the first 10 months of 1921. There is no chance to continue exportations to Europe now, with Germany back on the job. Rates suggested. Sewing machines to be taken fpom the free list, and a minimum duty of 30 per cent, based upon American valuation, to be levied on family sewing machines, in whole or in part, includ- ing repair parts. This duty will partially offset the great advantage held by German sewing-machine manufacturers on account of lower labor costs, and will yet leave them on a fair and equitable basis of competition with American manufacturers. The industry has no protection from patents, labor-saving machinery, or special sources of raw material. Hearings: Pages 4417^418. Witness: Mr. Lucius X. Littauer, representing the Metropolitan Sewing Machine Corporation. Costs and selling prices. The witness appeared as a manufac- turer of sewing machines, not the kind used for household purposes, but especially adapted for economy in manufacturing and selling at from $150 to $300. The Underwood tariff gave these a duty of 20 per cent ad valorem when exceeding $75 in value. Rates suggested. It will be impossible to compete with German imports under the conditions existing from the placing of these ma- chines on the free list. In 11 months of the year 1920, 1.273 machines were so imported: in 11 months of the year 1921 this figure rose to 11,541. It is requested that the $75 provision of the Underwood tariff be incorporated in H. R. 7456. As defined by the witness, this provision would extend also to cash registers and all other itenv included in paragraph 1541. Hearings : Page 4419. Witness : Mr. John W. Orin. representing the Johnson Shuttle Co. Costs and selling prices. For several years prior to 1913 shuttles for sewing machines were manufactured at a cost of 17 cents each. They were sold to the jobber, who bore the boxing, shipping, and selling expenses, at 20 cents a piece. He sold them to the retailer for 50 cents each and the retailer sold them to the consumer for $1. The Underwood bill put the shuttle on the free list, and immediately Ger- man shuttles came to this country, laid down at 11 cents each. Size of industnj. At the time of the passage of the Underwood bill, the witness's factory was employing 35 men, 30 of whom were the heads of families, but the 11-cent^German shuttle from Germany against the 17 cents cost of the American forced the company out of business. It remained out for two years, until the war began and stopped the importation of German shuttles. Comparability. During the time that the company's factory was shut down, the price of shuttles to the retailer was still 50 cents and the price to the consumer was $1. The difference between the 11 cents and the 20 cents was added to the jobber's profit. Rates suggested. Witness asks that sewing machines and their parts, including repair parts, have a duty of 30 per cent ad valorem. 536 DIGEST OF TARIFF HEARINGS,, H. R, 7456. Witness: The Sewing Machine Manufacturers' Association. (Brief; no appearance at hearings.) Costs and selling prices. The present scale of wages in the United States is fully 100 per cent higher than the prewar schedule. The German prewar wage scale was approximately 50 per cent of the American. The present German wage scale is infinitely less than the prewar. The following is a comparative scale of wages paid at the present time, per day of 8 hours, with due allowance for the de- preciated mark : Germany. United States. Machinists Cents. 49 $4.80 58 4 60 34 2 88 Holders 48 4.80 Milling-machine operators 46 4.40 The percentages of the total domestic cost of an average sewing machine at the present time are : Labor, 62^ per cent ; material, 37. The table below gives German sales prices (quoted by two German manufacturers) and American factory costs. German prices are f. o. b. Hamburg with discount of 2 and 4 per cent. Germany. United States. "P" iron-base hand machine.. . $5.89 $8.02 7 62 13 31 'B" iron- base hand machine 9.22 9.68 'B" wood-base and cover hand machine.. 10.82 15.33 14.20 20.33 ' V " drop-head vibratory treadle machine 21.60 26.64 'R" drop-head rotatory treadle machine 25.60 30.36 Size of industry. Prior to the war there were approximately two and one-half times as many sewing-machine manufacturers in Germany as in the United States, the latter numbering eight. It is estimated on good authority that the German output was 150 per cent greater than that of American manufacturers. The capital investment of the association members exceeds $18,000,000, and the number of workmen employed in normal times is approximately 8,300. Rates suggested. The prewar tariff of 30 per cent ad valorem is not, in the opinion of the witness, prohibitive of German importa- tion; it will, however, be of some aid to American manufacturers, who are of the firm conviction that a minimum tariff at this rate should be adopted for the partial protection of the industry. Remarks. The brief suggests that, as furnishing both export and import information, there should be two classifications relating to sewing machines. Family sewing machines should be distinguished from factory or power machines in order that those interested may always be reliably informed as to exports and imports of both types. The iSinger Manufacturing Co. controls approximately 95 per cent of the power sewing-machine business and over 60 per cent of the family sewing-machine business. The Canadian Government has placed an import duty of 30 per cent on sewing machines. In addition, there is collected a duty on DIGEST OF TARIFF HEARINGS, H. R. 7456. 537 exchange, now 12 per cent, which, together with the basic duty of 30 per cent and the sales tax, totals approximately 37 per cent. The Australian Government has recently passed a law imposing a virtu- ally prohibitive duty of approximately $15 per machine, effective January 1, 1922. Witness : Durbrow & Hearne, importers of machinery and sup- plies, principally from Germany. (Brief; no appearance at hear- ings.) Comparability. The firm is a member of the National Council of American Importers and Traders. The question of exchange does not enter very much into the firm's transactions, purchases be- ing mostly in American dollars. In all cases the prices herein stated are the equivalent values in American dollars, taken at the present very low rate of exchange, whenever purchases are in marks instead of dollars. Naturally, if exchange advances, these cost figures would be higher, and it has been the experience of the firm for the past two years that German manufacturers, even when selling in dollars, generally raise their dollar prices as the exchange value of the mark advances. In addition to the actual cost of the goods in Germany, there are certain export taxes. As these are variable, amounting at the present time to only 1 or 2 per cent, no account is taken of them. Freight charges will average about double what they were in pre- war times and all other expenses are about double insurance even more than double. No comparison whatever is made as to the effect of the proposed duties, but if the rate and the actual cost in Ger- many are increased the ultimate cost of the goods landed in Amer- ica will be very much greater than in prewar times. In addition, the firm wishes to state that within their experience German manu- facturers have been very slow in deliveries in the last two years. The firm has been unable to find any evidence of ability to dump goods on the American market. Summarizing the cited statement of comparative costs of goods imported by the firm from Germany at the present time and in pre- war times, it appears that there has been an increase in cost vary- ing from 30 to 107 per cent in sewing machines; in parts, 31 to 50 per cent ; and in needles, 25 to 137 per cent. PARAGRAPH 1542. CERir>r. WITNESS, AM) INTEREST REPRESENTED. FAVORING HIGHER DUTIES : Mr. Alexander Harris, representing the New Process Metals Corporation, Newark, N. J. Hearings : Pages 4420-4426. Size of industry. Cerium, a combination of other metals, includ- ing lanthanum and didymium. is used for only a few industrial ap- plications, pocket lighters being the best known. Its most important use, however, is for mining lamps, giving off light without danger of igniting dangerous gases. Comparability. Apart from the question whether the present American price of $7 a pound for the commoner grades, rising to $18 for special grades, is sufficient, the point made by the witness is that the industry has got to be kept alive. In Europe the consumption 538 DIGEST OF TARIFF HEARINGS, H. R. 7456. is at least 25,000 pounds a month, the people being used to lighters. Consequently, the cost of production is very much lower than here. Rates suggested. A specific duty of $2.50 a pound plus the ad valorem duty of 30 per cent now applying to the alloys of cerium. Remarks. Given adequate protection, the witness believes that a large business can be developed along such lines as the utilization of products now going to waste as the basis of this material. PARAGRAPH 1544. CHROME ORE. WITNESS. FAVORING HIGHER DUTIES : Hon. Dan A. Sutherland, Delegate in Congress from Alaska. Hearings : Pages 4426-4430. Size of industry. Representing chrome-ore producers in the Ter- ritory of Alaska, the witness alluded to the chief use of this ore as for alloying steel, its next greatest use being in chemical manufacturing, as in tanning leather. It is imported from Xew Caledonia, Rhodesia, Cuba, and several other countries. The annual prewar production in the United States was 591 tons a negligible quantity. Under stress of war 83,430 tons were produced annually for three years, now fallen to 3,900 tons. Foreign importations are now 60 per cent of what they were during the war period, while domestic production is only 4.5 per cent of the amount produced during that period. Camp cur abHity. American ore is produced by American labor, while the foreign is produced by convict and Kaffir labor in Xew Caledonia and South Africa, respectively. Rates suggested. A specific duty of 60 cents per unit, equivalent to $20 a ton of 50 per cent oxide. * The quantity of chrome used in manufacturing is so small that these rates could not affect the selling price of the manufactured product. PARAGRAPH 1546. CRESOL. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED DUTIES : Mr. T. E. Caruso, representing Lehn & Fink (Inc.), New York City. Hearings : Pages 997-998 of Schedule 1. Rates suggested. Specific provision for cresol or cresylic acid on the free list. PARAGRAPH 1548. GTJARAXA (BRAZILIAN COCOA). WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED DUTIES : Mr. A. Law Voge, chemical engineer. New York City. Hearings : Pages 4431-4433. Size of industry. Guarana, consumed as a morning drink, the same as coffee or cocoa, by a large^section of the Brazilian people, has never been imported into the TTnited States until so obtained by the witness for experimental purposes. In the unground form, it is now subject to a very severe export duty from Brazil. The witness DIGEST OF TARIFF HEARINGS, H. R. 7456. 539 spent several months in South America investigating agricultural conditions, markets, etc., and believes the present almost negligible production of guarana to be capable of rapid increase by proper development. Rates suggested. Free list, with the object of introducing another substitute for coffee or cocoa. PARAGRAPH 1549. COFFEE. WITNESS. FAVORING HIGHER DUTIES : Mr. Felix Cordova Davids, United States Commissioner, Porto Rico. (Brief; no appearance at bearings.) Size of industry. In Porto Rico, 300,000 persons are engaged in the coffee industry on more than 20,000 farms, ranging from 1 to 2,000 acres in size and having a total area of 150,000 acres. Rates suggested. Five cents per pound. Remarks. Coffee land in Porto Rico is unsuitable for other crops. Lower working standards in Brazil enable that country to produce at less cost than in Porto Rico. The brief maintains that the pro- posed duty of 5 cents per pound would not be felt by the consumer and would bring $70,000,000 to the United States Treasury annually. PARAGRAPH 1557. LONG-STAPLE COTTON. WITNESSES. AND INTERESTS REPRESENTED. FAVORING HIGHER DUTIES : Mr. Dwight B. Heard, president Pima Cotton Growers' Association, Phoenix, Ariz. Hon. Thomas E. Campbell, Governor of Arizona. FAVORING PROPOSED DUTIES : Mr. R. M. Macintosh, representing importers of Egyptian cotton. John H. Meyer & Co., New York City. (Brief.) Hearings : Pages 4433-4448. Witness : Mr. Dwight B. Heard. Size of industry. The long-staple cotton on which protection is sought is primarily the American-Egyptian or Pima cotton, grown in the irrigated valleys of the Southwest. These valleys produced, in 1920, 103,000 bales of this cotton, while imports of Sakel cotton from Alexandria, Egypt, in the year closing August 1, 1920, amounted to 340,000 bales. Average imports for the four previous years were 120,000 bales. The bulk of the Pima cotton, exceeding 1 inches in staple length, comes in direct competition with the Sakel product. The question is asked : " If this industry, developed with the assist- ance of the Department of Agriculture, is allowed to perish through lack of the reasonable tariff protection asked for, will not our Ameri- can manufacturers, needing this class of cotton, eventually pay such a price for it as foreign nations controlling production of it may dictate ? " The small importation during the years 1917 and 1918 was due to submarine activity; t/he use of " American-Egyptian (Pima) cotton was largely increased by American manufacturers during the war. For use in airplane cloth, made of No. 80 yarn, it was found nearly as satisfactory as the best of Irish linen. 540 DIGEST OF TARIFF HEARINGS, H. R. 7456. Comparability. Egypt produces annually about 700,000 bales of Sakel cotton, sold to European and American manufacturers and principally woven into tire fabrics. So far as the witness had been able to ascertain, the basic wage for labor in the Southwest is at least five times that paid in Egypt. In the American production cost 60 per cent is for labor. With Egypt able to lay this cotton down in New England for 20f cents, it is evident that the American grower will make but a fair profit with a duty of 20 cents per pound added to the present price of Sakel cotton. The witness referred to the efforts being made by the English Cotton Growing Association to develop new fields of production. In 1920, 80,400 bales of cotton, including 20,000 long-staple, were thus produced in Nigeria, Uganda, the Sudan, and Mesopotamia ; an ultimate production of nearly 3,000,000 bales is looked for. Hates suggested*. A specific duty of 20 cents per pound. A brief, dated December 13, 1921, is reproduced as a printed pamphlet, signed by the foregoing witness as president of the Pima Cotton Growers' Association. He refers to his close association, since 1906, with " the group of highly trained scientific men in the Department of Agriculture, who have so greatly assisted in the development of the agricultural industry." The witness has grown Pima cotton for the last six years and desires protection for this American-Egyptian long staple product. Comparisons are drawn between the wages of 24 cents to 36 cents per day paid to the Egyptian fellaheen and those of $2 to $2.50 per day paid agricultural labor in the Southwestern States. Similar arguments apply to transportation costs. A detailed discussion of the various uses to which this special fiber can be applied is followed by testimony to the effect that this country is able to produce all the long-staple cotton required a condition demanded by American manufacturers. The danger of allowing this industry to pass into foreign hands is pointed out. An accompanying e'xhibit summarizes the results of tests made by the United States Bureau of Markets, the Bureau of Standards, and commercial concerns. Hearings : Pages 4448-^450. Witness: Hon. Thomas G. Campbell, Governor of Arizona. Supplementing the testimony of Mr. Dwight B. Heard, Gov. Campbell dwelt upon the necessity of developing industries in the Southwest which will bear exporting beyond the boundaries of the State. Much is hoped for from the development of this Pima cot- ton, bringing into fruition a part of the hundreds of thousands of arid and semiarid acres in that country by irrigation. Competition with Egyptian labor is impossible, but it is possible to replace a once great universal industry with an industry de- pendent upon reclamation projects. The labor question is compli- cated by the competition with industries paying wages of 40 to 50 cents an hour for an 8 hour day; Mexican labor does, as a fact, DIGEST OF TARIFF HEARINGS, H. R. 7456. 541 underbid American labor. Besides, American labor does not care to work in cotton and beet fields. Witness : John H. Myer & Co. (Brief ; no appearance at hearings.) Rates suggested. As manufacturers in the State of Pennsylvania, the firm strenuously opposes the placing of any duty upon long-staple cotton, of which only a limited amount is grown in the United States. Most of this cotton is used in manufacturing automobile tires, and any duty imposed would affect the eight to nine million owners of automobiles in America. On the other hand, such a duty would be for the benefit of comparatively few people in this country. Hearings : Pages 4450-4452. Witness: Mr. R. M. Macintosh, representing importers of Egyp- tian cotton. The witness's statement was directed to rebut the testimony in favor of a tariff duty on long-staple cotton. It is denied that the so- called American-Egyptian cotton is a substitute for the cotton grown in Egypt, manufacturers having been unable to obtain equal results from it. It is argued that the result of the proposed duty would be either () the production of a lower grade of goods made necessary from the use of shorter-staple cotton or (&) a vastly increased price to the public on sewing thread, etc., for whose production the im- ported Egyptian cotton is essential. A detailed estimate is made of the potential effect of such a tariff on yarn prices, a total annual excess of cost to American consumers of cotton goods, amounting to $65.000,000, being indicated as due to the tariff itself and the compensating tariff which it would entail. Moreover, the exclusion of Egyptian cotton from this country by the proposed tariff would depress the market in Egypt and enable the European spinner to obtain his supply of Egyptian cotton at lower prices. This could not fail to depress the price of American staple cotton. PARAGRAPH 1559. METALLIC ARSENIC. WITNESS, AND INTEREST REPRESENTED. FAVORING HIGHER DUTIES : Mr. William Loeb, jr., representing the American Smelting & Refining Co. Hearings : Page 4452. Costs and selling prices. Prior to the war, practically no metallic arsenic was manufactured in this country ; it was imported from Ger- many and other European countries. During the war, at the request of the United States Government, metallic arsenic was produced. The cost of production was high, varying from 40 to 60 cents per pound. Comparability. Metallic arsenic is being offered from Germany to-day at 28 cents per pound. The witness is credibly informed that the present cost of production in Germany, with low exchange and labor rates, is approximately 5 cents per pound. Metallic arsenic is used in the hardening of metals and, to a certain extent, in insecticides. Rates suggested. A duty of 10 cents per pound. 542 DIGEST OF TARIFF HEARINGS, H. R. 7456. PARAGRAPH 1573. RAW FURS. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED DUTIES : Messrs. Samuel Ullman and Edward Fillmore, representing the Board of Trade of the Fur Industry of the City of New York and other associa- tions. (Brief.) Hearings: Pages 4131-4135 of Schedule 14. Size of industry. Prior to the war, the international trade in raw furs .was almost wholly in the hands of the British and Ger- mans. America did little direct business with the countries of origin of the raw furs used here. A considerable part of the American catch of raw furs was shipped to London to be distrib- uted. The raw fur industry of the United States has been built up since the war and has succeeded in wresting the monopoly from Germany, England, and Canada. A duty on raw furs would drive the business back to those countries. The first American fur auction was held at St. Louis in 1915, and auctions were commenced at New York in 1916. Public auc- tions of raw furs are now conducted in the spring, fall, and winter in both New York and St. Louis. In quoting from a report of the Alien Property Custodian, the brief states that the first St. Louis sale in 1915 amounted to considerably less than $1,000,000 and that the January (1919?) sale was said to have been in excess of $9,000,000. The first New York sale in 1916 was about $750,000 and the sale in Feburary, 1919, was almost $6,000,000. Rates suggested. Raw furs and skins to be retained on the free list. Remarks. The effect of a tariff on raw furs would be to remove America from international competition by destroying the prospects of retaining the present position as a center of distribution for both foreign and domestic furs. It would check the development of the fur dressing and dyeing industry in the United States, both with respect to the foreign demand for American dressed furs and for domestic consumption. And such tariff would in- evitably result in an increase of cost to the buyer of manufac- tured furs and work a grave injury to the manufacturing branch of the industry. Reference is made to a brief filed with the Com- mittee on Ways and Means. PARAGRAPH 1575. GRASSES AND FIBERS. WITNESS. AND INTERESTS BEPRESENTED. FAVORING PROPOSED DUTIES : Mr. T. E. Barbour, representing Allentown Spinning Co., American Manu- facturing Co., Chelsea Fiber Mills, Columbia Rope Co,, Dolphin Jute Mills. Hanover Cordage Co.. the Hooven & Allison Co., Lamond & Robert- son Co., the Schlichter Jute Cordage Co., the Sutherland & Edwards Co., the Wilmington Mills. Hearings: Pages 3444-3452 of Schedule 10. (Brief.) Rates suggested. This paragraph should be retained exactly as it is. DIGEST OF TARIFF HEARINGS, H. R. 7456. 543 Remarks. The consumption of jute by domestic manufacturers amounts to 220,000,000 pounds annually. (For a fuller discus- sion of this brief, see paragraph 1003, relating to jute yarns and cordage.) PARAGRAPH 15T5. JUTE AND JUTE BUTTS. WITNESS, ANT) INTEREST REPRESENTED. FAVORING HIGHER DUTIES : Mr. J. F. Simpson, representing Maginnis Cotton Mills, New Orleans, La. Hearings : Pages 3478-3480 of Schedule 10. Rates suggested. With a duty of 40 per cent on raw jute, and of 1 cent per pound plus 25 per cent ad valorem on burlap, hundreds of thousands of bales of low-grade cottons could be profitably con- verted into bags, ropes and twines by the cotton mills of this country. Remarks. Once the cotton bag made from low-grade cotton is established, its use will rapidly spread for the shipment of sugar. rice, beans, salt, cement, flour, and many other commodities. Nothing will be more helpful towards the stabilizing of low-grade cotton to a reasonable value than a duty on raw jute and burlap. Hitherto, a duty on raw jute has not been advocated, because 50 per cent of the imports were used in the domestic manufacture of bagging for cover- ing raw cotton. Notwithstanding free jute, American manufacturers of bagging for covering cotton have recently established mills in India because American mills could not compete with Indian in cost of production. The same condition applies to a comparison of wages paid by American cotton mills and by Indian jute mills. (For a more complete abstract of this brief see paragraphs 1008 and 1017 of Schedule 10, Jute cloths and jute bags.) PARAGRAPH 1577. SHELLAC AND COPAL GUMS. Mr. Marion Dorian, representing the Columbia Graphophone Co., Bridgeport, Conn. (Brief.) Hearings : Pages 4453-4454. Rates suggested. Free list. Remarks. Shellac and copal gums, essential raw materials, are not produced at all in this country. They do not compete in any degree with American products of similar or kindred character, and are indispensable to a variety of important American manufactured products. They must undergo refining processes in this country be- fore being fitted for use as raw materials in manufacturing. No American industry would be aided by a duty on these materials and no American industry will be injured by admitting them free. PARAGRAPH 1578. MINING AND BLASTING EXPLOSIVES. WITNESS. FAVORING HIGHER DUTIES : The Trojan Powder Co., New York City. (Brief; no appearance at hearings.) Rates suggested. The minimum duty which should be levied on blasting explosives should be the duty which would be applicable 544 DIGEST OF TARIFF HEARINGS, H. R. 7456. to the individual ingredients if separately imported. This would, however, be a somewhat complicated method of determining the duty and, as an alternative, the rates provided in the act of 1909 or, preferably, a slight modification thereof as shown below, should be introduced into the proposed tariff bill. The act of 1909, paragraph 435, provided as follows : Gunpowder, and all explosive substances used for mining, blasting, artillery, or sporting purposes, when valued at 20 cents or less per pound, 2 cents per pound ; valued above 20 cents per pound, 4 cents per pound. These rates of duty on mining and blasting explosives would be reasonably satisfactory, although it would be considerably better from every standpoint if the duty were fixed at 2 cents per pound for explosives valued in this country at less than 10 cents per pound ; 3 cents per pound for explosives valued in this country at 10 cents or more per pound, but less than 20 cents per pound; and 4 cents per pound for explosives valued in this country at 20 cents or more per pound. Remarks. Under the provisions of H. R. 7456, apparently by ail oversight, blasting powder is admitted free of duty, whereas the ingredients, if imported separately, carry very substantial duties. Since these ingredients can, generally speaking, be produced much more cheaply abroad than in this country, it appears that the tariff bill in its present form actually favors the manufacture of completed blasting explosives abroad and at the same time defeats its own purpose in levying duties on the ingredients, seeing that the com- pleted explosives containing these ingredients could be imported duty free, while the same quantities of ingredients, imported sep- arately, would be dutiable. Attention is directed to the unreasonableness of the situation which would exist, for instance, if the Canadian explosive manufacturers, located close to* the American border, could secure duty-free, cheaply made European ammonium nitrate and mix it into completed explosives for sale in competition with domestic explosives the latter being made from ammonium nitrate upon which a heavy duty would have been paid. The effect of such a situation would be to decrease the revenues of the Government, hurt the business of Ameri- can manufacturers, and benefit no one, since prices to users of ex- plosives would undoubtedly be maintained on the basis of dutiable ammonium nitrate even though a considerable proportion of the trade might be supplied with imported explosives made from the duty- free chemical. Ammonium nitrate is not used in am r considerable quantity for any other purpose than the manufacture of explosives. Thus, the entire object of the duty on ammonium nitrate would be defeated in direct proportion to the amount which would be brought in, duty free, in the form of completed ammonium nitrate explosives. Neither the act of 1909 nor the act of 1913 permitted the existence of such a contradictory and unfair condition. It is true that blasting explosives were placed on the free list in the act of 1913, but this act also placed ammonium nitrate on the free list. The act of 1909 car- ried a duty of 25 per cent on ammonium nitrate, but this was equalized by a duty on the completed explosives. DIGEST OF TARIFF HEARINGS, H. R. 7456. 545 While for purposes of illustration the case of ammonium nitrate is cited above, substantially the same comments apply to T. N. T., ammonium perchlorate and glycerin ; that is to say, to have these materials carry heavy duties and at the same time have on the free list explosives chiefly composed of mixtures of these ingredients, would encourage the evasion of duties on the materials themselves. This would result from the compounding of them into completed ex- plosives in Canada. Mexico, or other foreign countries and their im- portation into this country in a nondurable form. On the surface, it might seem that this apparent inequity might be corrected by the elimination of the duty on the ingredients concerned, but many complications would result, inasmuch as the ingredients are in turn manufactured from dutiable materials. Furthermore, such action would be totally out of alignment with the policy appar- ently followed in the bill, since it would involve placing on the free list quite a number of products which can be made much more cheaply abroad than in this country. PARAGRAPH 1579. CURLED HAIR. WITNESS. AND INTEREST REPRESENTED. FAVORING MODIFICATIONS : Mr. James H. Preston, representing the William Wilkens Co., Baltimore Md. Hearings : Page 4457. Rates suggested. The words "cleaned and drawn" to be omitted, because cleaned and drawn hair is wholly or in part manufactured. PARAGRAPH 1580. OSSEIN. WITNESS. FAVORING HIGHER DUTIES : The Wilckes-Martin-Wilckes Co., Camden, N. J. (Brief; no appearance at hearings.) Costs and selling prices. European labor in ossein plants receives 50 to 55 cents per day. while domestic labor receives from $3.75 to $4.25 per day for the same number of days. Muriatic acid, the raw material for" ossein, and of which 1.200 pounds is required to treat 1,000 pounds of bones, costs less than $4 per ton in Europe and, for 20 acid in this country. $20 per ton. Ossein is now being imported into the United States' and sold at 10 cents per pound less than do- mestic manufacturing costs. Rates suggested. Ossein to be specifically mentioned in paragraph 39, covering glue and gelatin, at 25 per cent ad valor^n. Remarks. Ossein. not specifically mentioned in H. K. 7456, is now classed as free under paragraph 1580, as hide cuttings or all other glue stock. Ossein is neither hide cuttings nor glue stock, but a product of selected bones, a half-finished gelatin. Its manufacture was undertaken when the war cut off imports, and domestic pro- ducers absolutely can not continue business unless afforded protection against European imports. 546 DIGEST OF TARIFF HEARINGS, H. R. 7456. PARAGRAPH 1582. HIDES. WITNESSES, AND INTERESTS REPRESENTED. FAVORING HIGHER DUTIES : Mr. Frank B. McClain, representing the National Live Stock Exchange. Hon. Holm O. Bursurn, United States Senator from New Mexico. FAVORING PEOPOSED DUTIES : Mr. Gray Silver, representing the American Farm Bureau Federation, (Brief.) Hearings : Pages 4459-4463. Witness : Mr. Frank B. McClain. Costs and selling prices, Hides are now selling at less than prewar prices. Heavy hides selling at 19 to 20 cents per pound in 1912-1914 and at 27 cents in 1914 sell to-day for 14 cents. A comparative table of prices for the last ten years, in standard classifications, is given on page 4461. Rates suggested. Hides should have an ad valorem duty of 20 to 25 per cent. Hearings: Pages 4463~4468. (Brief of Mr. D. B. Zimmerman, pages 4464-4468.) Witness : Hon. Holm O. Bursum, United States Senator from New Mexico. Costs and selling prices. Prices of hides are so low that it often does not pay local butchers to save the hide. " Recently (September, 1921) a local Kansas butcher shipped 80 cattle hides to a hide com- pany and his returns, after transportation charges were paid, were just $2*2.50, or an average of 28 cents a hide." Size of industry. Not only producers of beef cattle but also dairy- men are interested in hide prices, since the hide is the principal by- product of the discarded dairy cows. Rates requested. On hides, 15 cents per pound or 30 per cent ad valorem. Remarks. The lack of credit in the cattle business is causing wholesale liquidation; this will continue until the breeding herds of the west have been so seriously decimated as to necessitate a gigantic restocking a task requiring many years. ' There is a plethora of hides at present ; stocks consist of 5,500,000 sole hides, 4,500,000 upper leather hides, and the equivalent of 4,000,- 0,00 calf and kip skins in manufactured leather. Free hides have not meant cheaper shoes. Shoe costs increased even before the war, owing to royalties on machinery. Since the war, shoe prices have been kept at abnormal levels in spite of the 50 to 60 per cent drop in hide prices. The effect or the proposed duty on hides on the price of shoes would be negligible. The cost of shoes is b>sed on profits to manu- facturers, royalties on machinery, and expenses incidental to distri- bution. The advantage in free hides accrues to the foreign producer and manufacturer. Free trade in hides has not resulted in giving the American tanner and manufacturer a large place in the world's markets. Unlike the case of wood pulp and lumber, the use of foreign hides is not a saving but a loss of the country's resources, for if country hides are not used as produced they become a total loss. DIGEST OF TARIFF HEARINGS, H. R. 7456. 547 Since hides are the principal cattle by-product, if the price is so low that the hide does not bear its proportionate cost, the price of beef must be so much higher to the consumer. Hearings: Pages 4491-4493. Witness : Mr. Gray Silver, representing the American Farm Bu- reau Federation. (Brief.) The brief emphasizes the fact that cattle hides are a by-product; animals are not raised for their hides alone, and the variation in hide prices has little influence on the rate of cattle production. The price on sales is largely determined by the value of the meat on the animals, the hides representing only 6^ per cent of the weight. Cattle production is declining and the use of substitutes for heavy leather is increasing a factor which will tend to place a limit on the price advance of hides and leather. Consequently, the price of hides may riot advance greatly as a result of a duty on them. Rates suggested. The brief sums up a comprehensive discussion of possible results with the statement that hides, leather, and leather products should remain on the free list. PARAGRAPH 1598. CASEIN. WITNESS, AND INTEREST REPRESENTED. Mr. Charles W. Holman, representing the National Milk Producers' Federation. (Supplemental brief.) Hearings : Pages 2800-2806 of Schedule 7. Costs and selling prices. In 1920 the cost of manufacturing casein in California averaged 15.47 cents per pound, and for the first eight months in 1921, 16.2 cents per pound. California casein of high quality is being sold for 9 cents per pound in San Francisco at the present time. Rates suggested. A duty of 4^ cents per pound. Remarks Casein production" is a comparatively new American industry. Protection is needed from imports of casein from Argen- tina, which have been sold in New York as low as 6^ cents per pound. NOTE. jr or the witness's oral testimony, submitting preliminary report of the United States Milk Producers' Dairy Tariff Committee, see p. 2745 of Sched- ule 7. PARAGRAPH 1600. LEATHER. WITNESSES, AND INTERESTS REPRESENTED. FAVORING HIGHER DUTIES : Mr. E. A. Brand, representing the Tanners' Council of the United States of America, New York City. Mr. Fred C. Fabel, representing the American Oak Leather Co. and certain other sole-leather tanners, Cincinnati, Ohio. Mr. Frederick Carlisle, representing harness-leather tanners, Saginaw, Mich. (Brief.) Mr. Laird H. Simons, representing kid-leather tanners, Philadelphia, Pa. Mr. Frederick C. Stresau, representing side upper-leather tanners. Mr. Walter T. Creese, representing Creese & Cook Co. and other calf and veal leather manufacturers, Danvers, Mass. Mr. Maxwell J. Lowry, representing patent-leather tanners, Boston, Mass. 548 DIGEST OF TARIFF HEARINGS, H. R. 7456. REQUESTING RECLASSIFICATION : Mr. George B. Bernheim, representing R. Newman & Co., manufacturers of fancy leather and other manufacturers of bag, case, and strap leather, Hoboken, N. J. Hearings: Page 4493. Witness : Mr. E. A. Brand, representing the Tanners' Council of the United States of America, New York City. Rates suggested. " It is believed that a duty on all classes of leather is necessary for the protection of American tanners, but inas- much as the labor costs vary in the production of the several kinds of leather, the amount of protection needed necessarily varies." Remarks. "Practically all tanners, whether of heavy or light leather, are united in the belief that free hides, skins, and tanning materials are of the utmost importance to the tanning industry of the United States." Hearings : Pages 4469-4473. Witness: Mr. Fred C. Fabel, representing the American Oak Leather Co. and certain other sole leather tanners. A brief submitted, "Why hides should remain on the free list," is arranged under the following headings : 1. "A duty on hides will produce only a negligible amount of revenue, which will be many times offset' by a decrease in revenue from income taxation." Experience with the 15 per cent ad valorem duty on hides under the Dingley law does not indicate that the Government would derive any considerable revenue from a hide duty at the present time, after deducting cost of collections and expenses of adjusting drawbacks. The contention that imports of hides are now much larger and that revenue would therefore be greater is based on the experience of the last few years, when imports were abnormal and prices of hides were unusually high. A duty on hides will reduce the exports of shoes and this, in turn, will reduce the output of leather, correspondingly diminishing the imports of hides and the revenue therefrom. Furthermore, foreign competition in leather, in the home market, will reduce the taxable income of American tanners, more than offsetting any revenue from hide duties. 2. "A duty on hides will not result in any perceptible added price to the farmer for his cattle, but will result in a largely increased price which he will have to pay for shoes, harness and all other leather products." Hides are a by-product, cattle being raised for dairy or beef values. The price of the live animal is not affected by the condition of the hide. The price for cattle is determined by the current de- mand for beef, not by the demand for hides ; it is, in fact, often in direct opposition to that demand. Those who advocate a duty on hides estimate that farmers will benefit by as much as $34,000,000 a year. The interests represented by the witness contend that the farmer would not get any appre- ciable part of this amount it would stay with the packer. But even if the farmers should secure such an increase in income, it would be more than offset by the increased prices of shoes, harness, belting, DIGEST OF TARIFF HEARINGS, H. R. 7456. 549 automobile leather and other articles, estimated to amount to $38,600,000. 3. "A. duty on hides will seriously and injuriously affect our commerce with foreign nations, particularly with those of South America, and largely decrease our export trade." It is necessary to foster this country's foreign trade, and the greatest opportunity is offered by South America. Without buying from these countries goods can not be sold to them, and import duties on hides would lessen United States purchases of one of their most important commodities. The tanners of countries admitting hides free would be in a more favorable position than domestic tanners; the exports of foreign countries to South America would be stimu- lated and United States exports curtailed. 4. "A duty on hides will not 'encourage the industries of the United States.' but will tend to destroy the business of the inde- pendent tanners and throw the control of the tanning and shoe in- dustry of the country into the control of the large packers." The production of domestic hides is insufficient for the needs of domestic tanners: about half the hides must be imported. The packers produce about 65 per cent of the domestic output, and this percentage includes a very much higher proportion of the heavy or more desirable hides. The packers tan about 60 per cent of the sole leather made in this country: if the independent tanner will not pay their price for hides, they tan the hides and compete with the former in the sale of finished leather. The report of the Federal Trade Commission (August 21, 1918) is quoted in this connection : " They may not be able to put a tanner out of business at once, but they have the power to do it if they are so disposed." The brief asserts that the packers have secured this position primarily through their control of the domestic hide market and their very large percentage of influence in the hide markets of South America. A duty on hides would increase their advantage over the independent tanner, and if they were to secure control of the leather industry it will be but a short step for them to secure control of the shoe industry. American tanners believe that a recip- rocal duty should be placed on leather to prevent the dumping of foreign leather in this country, but the independent sole-leather tanner is so convinced of the necessity of free hides to his continued existence that he will accept free leather as the price of free hides. 5. "A duty on hides will inflict on the American public an in- crease in the cost on shoes alone of upward of $100,000,000, in addi- tion to the increased costs of all other leather products." This increase in the cost of living to the general public will not be balanced by any compensating advantage. Conclusion : " We confidently hope and believe that Congress will refuse to accede to the proposal to place a duty on hides which would not result in appreciable advantage to the farmer or the production of any material amount of revenue, but which would impose a very heavy burden of expense on the entire American people without any possible compensating advantage." The brief is signed by 40 leather-manufacturing companies. Hearings : Pages 4493-4495. Witness : Mr. Frederick Carlisle, representing harness-leather tan- ners, New York City. 7713422 36 550 DIGEST OF TARIFF HEARINGS, H. R. 7456. Mr. E. A. Brand presented a brief, abstracted below, for Mr. Frederick Carlisle, who was unable to be present. Size of industry. The tanning industry of Canada has expanded rapidly during the past decade. The value of the output of all kinds of leather in 1915 was $23,654,491, and in 1917, $41,117,128. The Canadian Harness-leather tanners have gained a post-war foothold in this country, as shown by the importation of $834,010 worth in the calendar year 1919, $338,014 in 1920, and $240,000 in the first six months of 1921. Rates suggested. Unless reciprocal arrangements are provided, so that harness leather from the United States can enter Canada on the same basis that Canadian imports enter the United States, the harness-leather tanners of this country believe themselves entitled to a duty of 16 per cent ad valorem, which would equal the Canadian duty of 15 per cent ad valorem plus 1 per cent excess sales tax on all imported goods. Remarks. Canada is the only country from which competition on harness leather is seriously felt. Several tanning firms in this country have received a letter sent out by the board of trade of a Canadian city, urging them to move across the border on account of the preference given by India to other parts of the British Empire in the matter of export duty on hides and skins. The duty is 15 per cent, of which two-thirds is re- mitted to purchasers in Canada and other parts of the empire. Hearings : Pages 4864-4866. Witness : Mr. Laird H. Simons, representing kid-leather tanners of the United States, Philadelphia, Pa. Costs and selling prices. Before 1889 the American market was dominated by French kid. which sold at prices varying from 50 cents to $1.50 per square foot. Chrome (mineral) tanning was introduced in 1889 and the industry was given protection, together with free raw materials, under the tariff laws of 1890, 1894, 1897, and 1909. The price to the American consumer for American-tanned kid was re- duced to less than one-third the former cost for French kid. The lowest grades of American kid sold for about 10 cents per square foot, the best grades for 35 cents, the average being about 20 cents. Size of industry. There are about 60 independent competitive firms tanning goat, kid, and kangaroo skins into shoe leather. These firms have between 8,000 and 10,000 employees. Under the stimulus of war needs for leather and the interruptions of trading facilities, the world factory capacity for the tannage of kid leathers has been greatly increased. This is especially true of England, Canada, and Germany ; new factories have been started in the Netherlands, Spain, Brazil, Chile, Argentina, and Japan. The American factory capacity has been almost doubled. Rates suggested. Twenty per cent ad valorem. Kid leather made from goat, kid, and kangaroo skins should be put under paragraph 1431. Goat, kid, and kangaroo skins should l^e admitted free. Goat skins produced in this country are not suitable for leather. The skins used by tanners are 99 per cent imported, while kangaroo skins are 100 per cent imported. These skins should be retained on the free list, but put in a separate paragraph, which might read: DIGEST OF TARIFF HEARINGS, H. R. 7456. 551 Skins of goat, kid. and kangaroo, raw or uncured, or dried, salted, or pickled. Remarks. India produces about 40 per cent of the world's supply of raw goat and kid skins. On September 11, 1919, that country im- posed a duty of 15 per cent ad valorem on exports of raw hides and skins; two-thirds of this duty is remitted to purchasers in other parts of the British Empire. In this connection the interests represented by the witness heartily indorse section No. 302 of the bill. France, Germany, and Canada, the principal competitors, impose heavy duties on leather coming from this country but can send their own leather into this country free of duty. The United States uses ap- proximately two-thirds of the world's raw material suitable for making this kind of leather. Hearings : Pa^es 4497-4498. Witness : Mr. Frederick C. Stresau. representing side upper- leather tanners. Costs and selling prices. Wages now paid are 100 per cent higher than pre-war, although 33 per cent less than when at the highest point. A protective duty is necessary to maintain the American standard of wages. Germany is the principal competing country; large German tan- ners pool their requirements for raw material and also have from 30 to 90 days in which to pay for it, while the custom in the United States is to pay on delivery. Size of industry. The United States and Germany are the leading countries in the production of side upper leather, which is made from " green-salted and air-dried light cattle hides, ranging in weight, green-salted basis, from 25 to 50 pounds. Cattle hides are split in two from tail to head prior to processing, in order to facilitate han- dling, each half then being designated as a side..' " Prior to the war, Germany's tanning equipment was TO per cent as large as that of this country, and it has since been enlarged. An up- to-date chrome tannery can be erected at short notice and with leather on the United States free list the Germans will probably enlarge their plants to take full advantage of this market. Rates suggested. " On cattle side upper leather, dressed, n. s. p. f ., 20 per cent ad valorem." This is based on the assumption of free raw materials. Remarks. The Germans are operating their plants to capacity, while the tanning industry in this country has not operated over 40 per cent of capacity during the past 16 months. Americans are sending hides to Germany to be tanned on contract, and England, which was formerly the largest foreign market for American leather, is buying from Germany. German side leather made very appreciable inroads into domestic markets under the tariff law of 1913. Hearings : Pages 4498-4501. AVitness: Mr. Walter T. Creese, representing Creese & Cook Co. and other calf and veal leather manufacturers, Danvers, Mass. Costs and selling prices. In this statement the word " calf " refers to both calf and veal leathers. Germany is the largest producer of calf leathers in the world and has a much lower labor cost than the 552 DIGEST OF TARIFF HEARINGS, H. R. 7456. United States. " The highest skilled tannery labor is paid in - Ger- many from $2.25 to $3 per week as compared with $25 to $35 paid in this country, and women who are employed are paid considerably less. Some of these women are earning only 25 cents per day at the present rate of exchange * *. The majority of the tanning materials used in the manufacture of calf leathers are made by the same cheap labor in Germany and now enjoy a protective tariff." The raw material cost is about 60 per cent of the total, w r hile labor makes up most of the balance. European calfskin tanners have access to supplies of the best skins. " On account of her extremely cheap labor Germany is able to outbid all other countries in the pur- chase of raw materials. " Bona fide offers have been made by German tanners to manufac- ture calf leather for American account on a basis of 5 cents a foot, f. o. b. Germany. To produce calf leather in this country, up to and including that state, would cost American tanners from 11 to 14 cents per foot." Size of industry. " The calf leather industry in this country is a large one. having been developed during the past half century under protective tariffs." Rates suggested. That to paragraph 1431 be added " Calf and veal leathers, finished or partly finished, 25 per centum ad valorem." Remarks. Importations of calf leather increased in 1914 under the Underwood tariff. These came mostly from Germany and, after that source was closed, from Canada. A protective tariff on this product would probably not increase the price to domestic con- sumers. There is a Canadian duty on calf leather of 15 per cent. " There are few nations which have not either a protective tariff or prohibi- tive tariff on calf leathers." The calf leather entering into the manufacturing cost of a shoe represents about 25 per cent of the cost. Hearings : Pages 4501-4503. Witness: Mr. Maxwell J. Lowry, representing patent-leather tan- ners of the Tanners' Council. Costs and selling prices. German labor in this industry is paid $2.25 to $3 per week, based on the present value of German currency, while in this country the wages are $25 to $35. Germany has access to better raw material and manufactures her own tanning materials at a cost lower than the American. About half the expense in the production of patent leather is for labor. Canadian patent leather is being sold in this country in steadily increasing quantities and at prices which American tanners can not meet. Canadian labor is on a lower wage basis than the domestic. German patent leather is also being sold in this country at prices below the domestic cost of production. Rates suggested. TMfet to paragraph 1431 of the pending tariff bill there be added " and patent, japanned, varnished, and enameled shoe-upper leather, 5 cents per foot and 25 per cent ad valorem." This on American valuation. " Patent leather requires a higher duty than other kinds of upper leathers, because the production cost is DIGEST OF TARIFF HEARINGS, H. R. 7456. 553 about twice as much." Labor is the principal item in the cost of japanning, which is all handwork. Remarks. German tanners had adopted, before the war, the im- proved American process for making light, flexible patent leather, and were not only capturing American foreign markets but sending patent leather to this country. Canadian tanners improved their product after 1915 and invaded this market. Hearings : Pages 4495-4496. Witness: Mr. George B. Bernheim, representing R. Newman & Co., of Hoboken, X. J.. manufacturers of fancy leather, and other case, bag, and strap leather manufacturers, Hoboken. N. J. Costs and selling prices. Labor represents about 50 per cent of the cost of the finished article. European labor is paid much lower wages than the American. " The success of finishing the leathers named is dependent on the attention given to each individual skin by skilled workmen, and no machinery has yet been devised to replace the hand-labor operations so essential to the production of artistic leather." Size of industry. There are about 75 firms engaged in the indus- try. Rates suggested. Twenty per cent ad valorem. It is suggested that these leathers be put under paragraph 1431, so that it should read: Chamois skins, pianoforte, pianoforte-action, player-piano action, enameled upholstery leather, bag, strap, case and glove leather, finished, in the white or in the crust, and seal, sheep, goat, calf, pig, and all other leathers, dressed and finished other than shoe leather, not specially provided for in this section, 20 per cent ad valorem. Remarks. The fancy, bag, strap, and case leather manufacturers desire free raw materials and a duty on leather. PARAGRAPH 1600. HARNESS AND SADDLERY. WITNESS, AND INTEREST REPRESENTED. FAVORING HIGHER DUTIES : Mr. J. A. Roberts, representing the Wholesale Saddlery Association of the United States, Hartford, Conn. Hearings : Pages 4503-4511. Costs and selling prices. Lower rates of wages are paid in this industry abroad. " Much of the handwork is done in the homes of the mechanics by members of their families, and so without over- head expense to the master producer. Similar conditions do not prevail in the United States." Foreign-held surplus harness and saddlery stocks are a further menace to the industry, and the duty of 35 per cent imposed by Canada on imports of harness and sad- dlery has closed that market to domestic manufacturers. The largest harness and saddlery manufacturing and jobbing house in North America is in Winnipeg. The Canadian manufacturer does not have to adapt his product especially to the American market. Size of industry. The industry has suffered of late from changes in the methods or" transportation. 554 DIGEST OF TARIFF HEARINGS, H. R. 7456. Rates suggested. Saddlery and harness should be placed under a separate paragraph. A duty of 35 per cent on foreign valuation the rate which Canada imposes would be satisfactory. Duty has to be paid on worsted girth webbing, wooden " trees " and other parts used in making saddlery, while the finished articles come in free. (The insertion of " except metal parts " in paragraph 1600 has changed the situation in respect to the duty on such parts of harness and saddlery.) Section No. 302 does not afford relief, or if used, would be invoked only after much damage and loss had been sustained. Remarks. " Now, I submit to you the impossibility of our manu- facturing an article for pleasure use and an item of luxury, and paying a duty on the absolutely essential materials going into it if we manufacture it in the United States, and competing with Eng- lish-made goods manufactured at a lower wage rate than paid in the United States factories." PARAGRAPHS 1600 AND 1601. LEATHER AND SHOES. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED DUTIES : Mr. Charles H. Jones, representing the National Boot & Shoe Manufac- turers' Association of the United States, Whitman, Mass. Hearings : Pages 4474^491. The witness stated that the majority of the shoe manufacturers would prefer free hides, free leather, and free shoes to a duty on each. A duty on hides would increase the cost of shoes and other leather goods to the domestic consumer, handicap the American shoe and leather industries in foreign markets and decrease the ex- portation of those products; it would not stimulate the domestic production of hides to any extent, since they are a by-product, nor would it add to the farmers' or stock-raisers income, as the packers would get the increase in the price of hides; it would put the in- dependent tanners at the mercy of the packers and would not yield the Government any considerable revenue. The leading arguments in the testimony and brief are abstracted below : The imposition and repeal of import duties by the Payne-Aldrich and Underwood tariffs, respectively, are referred to. A tax on hides has been proposed whenever a tariff bill has been under con- sideration since the Civil War, but no Ways and Means Committee has ever included it in any bill reported. So far as can be learned no country whose industries are highly developed, and where manu- facturing is protected, has ever imposed such a tax. It found its place in the Dingley bill through the insistent demand of certain Senators from the far western States and is believed to have been conceded to them on a trading basis, rather than as a protective measure. The purpose of protective taxes is to protect some useful Ameri- can industry, to insure to American workmen employment at rea- sonable wages, or to produce revenue for the Government. "It is easy to show that this tax (in the bill) will do none of these things." Hides are a by-product and production would not be increased on DIGEST OF TARIFF HEARINGS, H. R. 1456. 555 account of a duty. Besides, as the hide is worth about one-fifteenth part of the value of the animal, a duty of 15 per cent on that frac- tion value " means nothing in the way of protection." As regards revenue production during the twelve years that this duty was in force it produced only between one and two million dollars a year. The increased cost of the raw material due to the duty will be re- flected in increased cost of leather and articles made from leather. In the case of heavy shoes, the increase in cost at the factory would be 10 to 12 cents a pair on the prewar basis of cost and would be much more to the consumer. It is estimated that the total increase in cost of footwear to the people of this country would be twenty to twenty- four million dollars a year. If the proposed duty is imposed, and American tanners receive the drawback on exported leather made from imported hides, such leather will sell for about 2 cents less per foot to foreigners than to the domestic consumer. This condition would assist the foreigner in competing with American shoe manufacturers in overseas mar- kets, and hides from the great cattle-raising areas would be diverted to free markets. The prices of hides are fixed in a world market. The supply of hides, in proportion to the demand, is decreasing; every hide is needed and will tend to be sent to a free market for sale. The duty on hides, in effect from 1897 to 1909, reduced importations, thus injuring domestic industry and encouraging the tanning business abroad. After 1909, when hides were on the free list again, the im- ports increased. Much other material necessary to the manufacture of shoes is used with them, labor is employed, and manufacture and industry are stimulated. Even under present conditions, this coun- try is obliged to import 40 to 45 per cent of all the hides used here. The freight rate on leather exported from England via English lines to New York is one cent a pound, while the rate on leather going to England from New York is 2J, cents a pound. There is a 15 per cent export duty on hides sent from India, two-thirds of which is re- bated to purchasers in other parts of the British Empire. England's manufacturers are protected by this differential. The witness also takes up the argument in favor of a duty on hides, presented in a brief filed with the Committee on Ways and Means by Mr. S. H. Cowan, of the National Live Stock Association, on December 5, 1908. Mr. Cowan had asked w T hat difference it made to the tanner, who gets the benefit of a hide duty, the man who slaughters the steer, or the farmer. The reply to this is that the packers now tan more than 50 per cent of all hides going into sole leather in this country, besides consider- able side upper and calf leather. Of the entire yield of hides in this country, 65 per cent are packer hides and 35 per cent are country hides. " Their substantial progress in the control of the industry has not been brought about because they are better tanners or better merchants but simply in consequence of their control of the raw material." A large part of the increased price resulting from the duty will be secured by the packers and will add to their advantage over the independent tanners, thus leading to packer domination of the shoe 556 DIGEST OF TARIFF HEARINGS, H. R. 7456. business. The quality of leather produced by the packers is inferior, and " constantly tends to break down the standards of excellence to which the industry has become accustomed, and will tend in the long run to become a very substantial item in the cost and value of leather goods in general use throughout the country." The brief goes on to state that the price of the complete animal is invariably less per pound than the price of the hide. Consequently, if steers are bringing 12 cents a pound on the hoof, the hide costs the packer 12 cents, while the market price of the hide at that moment may be 16 cents and the independent tanner must purchase it at that higher price. Following the depression of 1907, during the spring and summer of 1908, the packers operated in the market to keep up the price of hides. They had tanned large quantities of hides acquired at low prices and wished to maintain the price of leather which they had for sale. The average price of native steers declined from $6.10 per hundred in the first six months of 1908 to $6 per hundred in the last six months of the year, while the average price of native steer hides increased from 11.17 cents per pound to 15.69 cents per pound. The brief alleges that this operation has been repeated or attempted whenever the market has offered a favorable opportunity. The brief also refers to the following statement of the Federal Trade Commission, made not in relation to the proposed duty, but to the position of the packers without any hide duty at all : " They may not be able to put a tanner out of business at once, but they have the power to do it if they are so disposed." The finish and beef value of the animal are the principal factors in determining the price which the grower receives; neither he nor the purchaser can know the exact price which the hide will bring. The question is asked : " Is it reasonable to assume that in selecting and purchasing cattle for slaughter so small a matter as 15 per cent on one-sixteenth of the value of the animal can be recognized by the buyer and added to the beef value of the animal ?" The packer allows an estimated percentage of the value of cattle to cover the value of offal hides, tallow, horns, hoofs, butter fats, etc. " Business pru- dence compels this allowance to be made small enough to make the packer safe in his purchase of the animal. Then any market condi- tion, tariff, tax, or other factor which tends to increase the price of the hides or other offal simply increases their profit." Other factors make it difficult, if not impossible, for the hide value to be taken into account when buying any specific lot of steers. Brands on steers do not affect their price, yet a branded hide is not worth as much as an unbranded one ; hides are not sold immediately, but are kept in the cellars of the packers for months, during which time their value often fluctuates greatly ; a thin cow will be sold as a canner at a very low price, while a cow in good beef condition will bring a higher price, but the hides will go into the same lot and be sold to the tanner at the same price. The conclusion is repeated that so small a variation in the price of the hide as would be represented by a duty of 15 per cent could make no appreciable difference in the price paid by the packer for the animal for slaughter. DIGEST OF TARIFF HEARINGS, H. R. 7456. 557 PARAGRAPH 1601. SHOES. WITNESS. AND INTEREST REPRESENTED. FAVORING HIGH DUTIES: Mr. John S. Kent, representing: the National Boot and Shoe Manufacturers' Association of the United States, Brockton, Mass. Hearings : Pages 4511-4514. Costs and selling prices. The manufacturer gets about $6 for a pair of shoes retailing at $9. The proportion or the $6 represented by labor cost is 20 to 25 per cent. Wages have been reduced 10 to 20 per cent in the shoe industry.. Wages paid abroad are lower than those paid in this country. Size of industry. The boot and shoe manufacturing industry ranks sixth and. with its allied industries, third among the industries of the United States. The 1919 census report gives the number of establish- ments as 1,441 ; number of shoes produced, 329,528,900 pairs; value of output, $1,152,016,000, and an annual wage distribution of more than $200,000,000 among over 200,000 workers. Imports of shoes have increased greatly during 1919, 1920, and 1921. During the fiscal year ending June 30, 1919. the number of pairs imported w r as 49.743":; fiscal year 1921, number of pairs 206,666. Imports were from England,* Germany, and Japan. On the other hand, exports of American shoes have been decreasing; in the fiscal year ending June 30, 1920, they amounted to 20,289,557 pairs and in the fiscal year ending June 30, 1921, to 12,581,181. Rates suggested. Fifteen per cent ad valorem, if hides are left on the free list. ' Remarks. Canada imposes a duty of 30 per cent ad valorem on American shoes. It is hoped that " when the tariff bill under con- sideration becomes law it will contain a clause giving the President authority to tax imports from countries that tax our products." PARAGRAPH 1603. ASPHALT. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED DUTIES : Mr. W. E. Humphrey, representing the Barber Asphalt Paving Co., "Wash- ington, D. C., and other paving interests. Mr. Herbert Abraham, representing the Prepared Roofing Association, New York City. Hearings: Pages 4515-4518. Witness : Mr. W. E. Humphrey. Size of industry. Leaving out of consideration asphalt produced from oil, with which the witness is not concerned, there is no native asphalt produced in this country. Protection of native asphalt could not therefore stimulate production or develop domestic natural re- sources. Comparability.. There is no competition in price with Trinidad Lake asphalt to-day at $28 a ton, Bermuda Lake at $38, and oil asphalt at' $12. The witness distinguishes between " native " and " oil " asphalts ; none of the former is found in this country and it is these which are used largely for paving. 558 DIGEST OF TARIFF HEARINGS, H. R. 7456. Rates suggested. -The witness, himself " an extreme protectionist," thinks i^ an economic mistake to tax a product used principally by public bodies, because in making the transfer from one pocket to the other there is always a loss. Remarks. A brief filed by the witness discusses the relative merits of native and oil asphalts and the cost involved in the use of inferior products. Hearings : Pages 4712-4713. Witness : Mr. Herbert Abraham, representing the Prepared Roof- ing Association, New York City. Size of industry. This industry is carried on in 48 factories in the United States, the production of which represents 70 per cent of all types of roofs used in this country. In 1920, 2,837,500,000 square feet "of asphalt roofing and shingles were manufactured. For these, asphalt derived from Mexican petroleum is the most suitable, 484,- 000 tons having been used in 1920. A tax of 35 cents per barrel on crude oil would increase the cost about $1,685,000 annually, at a time when a revival of the building program is of prime importance to relieve unemployment and reduce high rentals. Rates suggested. Free list. PARAGRAPH 1610. WOOD PULP. WITNESSES, AND INTERESTS BEPBESENTED. FAVOBING HIGHEB DUTIES : Mr. Peter G. Thomson, jr., representing the Champion Fiber Co., Cincin- nati, Ohio, and Canton, N. C. The Columbian Paper Co., Philadelphia, Pa. (Brief.) Mr. Courtney Campbell, representing Carolina Stock Farms, Foreston, S. C. Bastrop Pulp & Paper Co., Old Hickory, Tenn. (Brief.) The Pynetree Paper Co., Gordon, Ga. (Brief.) Port Huron Sulphite & Paper Co., Port Huron, Mich. (Brief.) Mr. H. H. Bishop, representing the Pulp Manufacturers' Association, New York City. Mr. A. C. Goodyear, representing the Bogalusa Paper Co. and other concerns. The West Virginia Pulp & Paper Co. and chemical fiber manufacturers from different sections of the United States. (Briefs.) The Filer Fiber Co. (Brief.) Farmers producing pulp wood in all parts of the United States and manufacturers of chemical wood pulp. (Brief.) FAVOBING PROPOSED DUTIES : The Book Paper Manufacturers' Association. (Brief.) Mr. Peter G. Thomson* representing the Miami Valley Paper Manu- facturers' Association. (Brief.) Mr. Frank C. Overton. representing the Association of American Wood Pulp Importers. (Brief.) Hearings: Pages 4523-4533. Witness: Mr. Peter G. Thomson, jr., representing the Champion Fiber Co.. Cincinnati, Ohio, and Canton, N. C. Size of industry. The pulp-wood industry ranks as the most important in North Carolina, as a source of revenue to farmers and small land owners. In normal times the wood supply amounts to $250,000 monthly, and the monthly pay roll is $130.000, making a wide distribution of money in farming and pioneer districts where it is so badly needed. The chemical pulp mills, whose costs are DIGEST OF TARIFF HEARINGS, H. R. 7456. 559 over TO per cent labor, can supply the entire requirements of America forever, if not driven out of business. (See tables on p. 4547.) Comparability. Owing to the large importations of foreign chemi- cal pulp free of duty, at prices below American costs, the wood pur- chases have stopped, the mills shut down, and thousands of workers and their families are in actual want. In Finland, the workers work 12 hours or more at ridiculously low wages. America can not meet the competition of foreign chemical pulp made with such cheap labor. For the quarter ending September, 1921, Germany exported 16.000 tons of chemical pulp to America, and Finland 7.000 tons. Rates suggested. One cent a pound on bleached chemical pulp and six-tenths of a cent on unbleached chemical pulp. The supplies and materials which are purchased are all protected with duties, and they can not meet' the competition of foreign chemical pulp made with cheap labor. Interests represented wish sufficient specific and ad valorem duty to enable them to continue in business. Remark** Witness states that their workers, normally about 2,400, are all white native-born Americans, and they wish to employ them so that they can live according to American standards, with, proper homes, schooling, and hours of labor. They operate on the eight-hour basis, but can not do this and pay suitable wages, if foreign chemical pulp made with their different ideals of labor comes in free of duty. Various briefs were submitted including tables of the chemical pulp industry. Hearings : Pages 4535-4536. Witness: The Columbian Paper Co. (Brief.) Size of industry. Chemical wood pulp mills employ native Amer- ican labor only. The wage scale runs from $1.50 to $5 per day, with a few very expert men receiving more. Common labor receives $9 per week in America and $4 per week in Germany. Rates suggested. The company requests six-tenths of 1 cent per pound on unbleached chemical pulp and 1 cent on bleached chemical pulp. A tariff is a guaranty against unusual importation in de- pressed times like the present (December, 1921). when foreign coun- tries take full advantage of their lower costs and sell at a price be- low the American cost of production, forcing the market to absorb their production while American production waits for an increased demand so that it can also begin to move. The tariff requested would, in effect, force foreign manufacturers to sell in America at American production cost and pay into the Treasury of the United States the difference between their own low costs and the higher American cost. The company suggests that the tariff be enacted without delay and thus rescue the chemical pulp industry of America from a most desperate situation. Remarks. Wood, the raw material of the paper industry, is bought from farmers and country landowners, who produce it with their own labor. The market for this wood, which would be other- wise unmarketable, provides the income from new ground which makes clearing a possibility. Few farmers could afford to clear new ground if there were no return from the labor employed, and if the timber cut had to be piled and burned with additional labor cost. 560 DIGEST OF TARIFF HEARINGS, H. R. 7456. Hearings : Pages 4536-4540. Witness : Mr. Courtney Campbell, representing the Carolina Stock Farms. Foreston, S. C. Size of industry. The stock farms operate 4,300 acres. The only source of income is from the wood produced from this new land, which is salable for only one purpose chemical pulp. There are several hundred millions of acres of similar lands in the United States which can be utilized for chemical wood pulp only. Comparability. To-day (1921) in South Carolina the labor used in the chemical pulp industry is actually facing starvation. These men can not be given work until the pulp wood is sold, and it can not be sold at present because the mills are all shut down. The yards are loaded with pulp wood and thousands and thousands and thousands of cords are lying exposed to the weather. At this time chemical pulp, imported by America from Germany. Sweden. Czechoslovakia, Norway, and from other countries by the million pounds, is being sold at prices below the cost of production of Ameri- can pulp mills Germany receives twice the price in America for her chemical pulp that she does for her home consumers. America can not compete with Germany's skilled labor cost of 7 cents an hour against 62 cents an hour in America. The lowest wage paid in America in the South is $1.25 per day." Hates suggested. A duty on chemical wood pulp, requested not as a special interest seeking favorable legislation, but as American farmers for themselves and their labor. The tariff duties should be so apportioned as to protect American laborers as well as American paper manufacturers. The House bill gives protection where it is least needed, for any depression in the industry of manufacturing paper does not compare with the ruin that is facing producers of chemical pulp. Remarks. A brief submitted states that the stock farms are en- gaged in bringing into cultivation waste land, and thereby adding to the resources of the country. If the wood obtained from these lands is not sold, owners can not afford to clear it and it must be cleared to be brought into production. The pulp mills are idle be- cause they can not produce pulp at the price offered, and because there is only a limited demand at a time when the market is absorb- ing thousands of tons of foreign pulp. American chemical wood pulp is to the extent of 70 per cent the product of American labor. Hearings : Pages 4533-4534. Witness: Bastrop Pulp & Paper Co.. Old Hickory, Tenn. (Brief.) Comparability. American produced chemical wood pulp is to-day (December, 1921) unmarketable, even at cost, because Finland, Sweden, Germany, Norway, and other countries, with their lower production cost, can profitably undersell American cost in the only market open to American producers the market of the United States. These countries are so favorably situated that they can sell in America below American cost and still exact twice the net price for which they sell at home. A statement issued by the Division of Customs. United States Treasury, shows that on a certain day in 1921 the price at a German factory to a German buyer was 2.956 marks per kilo, and on the same day the price to an American buyer was 5.238 marks per kilo, nearly twice as much. DIGEST OF TARIFF HEARINGS, H. R. 7456. 561 Remarks. Seventy per cent of the cost of American chemical pulp is labor. If any industry has a right to protection it is the chemical wood-pulp industry. With its mills shut down and its labor idle while foreign pulp, duty free, floods American markets, it faces stern times. Hearings: Pages 4534-^1535. Witness: The Pynetree Paper Co., Gordon, Ga. (Brief.) Remarks. The company states that it is a pioneer American concern, located in a new territory for the chemical wood pulp, tap- ping a new source of American raw material of which there is an unlimited supply, and paying cash mone}^ in pay rolls to American labor in an out-of-the-way section where cash money is scarce. It is one of the chemical pulp mills that invested American capital in America and which is producing values from American resources. They have no other market except America, and that market is com- pletely in the hands of foreign producers who sell below American cost, while American labor is going hungry and the timber is value- less and the many mills are facing annihilation. Hearings : Page 4535. Witness : Port Huron Sulphite & Paper Co., Port Huron, Mich. (Brief.) Costs and selling prices. The desperate situation of the chemical- pulp mills of America is indicated by the following: The cost of producing unbleached chemical pulp. 1916 1920 1916 1920 Wood $16 6.5 $35. 70 $0.70 $2.54 Sulphur Limestone 2.64 ' .29 1 31 1.92 .51 2.18 General and office Commissions Labor '.31 8.55 1.66 .83 17.20 Coal 2 74 Factory expense 3.75 6.75 Total per ton 37.83 80.29 The company states that pulp is selling in the market for $10 to $20 per ton less than their cost of product, and their mill lost about $100,000 in 1921. The direct labor cost to the mill on pulp is about 22 per cent of its entire cost and the indirect labor cost is nearly 50 per cent of the entire product, as that is the cost of the princi- pal raw material, which is wood. The labor is therefore 72 per cent of the total cost. Hearings : Pages 4540-4542. Witness : Mr. H. H. Bishop, representing the Pulp Manufacturers' Association, New York City. Size of industry. The daily capacity for manufacturing w r ood pulp in the United States, as of January 1, 1922, is about 8,000 tons mechanical, 9,300 tons chemical. The 1920 production, totaling 4,700,000 tons, is recognized by everybody as abnormally large. It may be fairly assumed that normal production and importation is about 4,000,000 tons. Attention is directed to the fact, shown by these figures, that to the extent pulp is imported domestic mills and employees are denied the opportunities which should be theirs. 562 DIGEST OF TARIFF HEARINGS, H. R. 7456. Comparability. An alarming feature is found in the importation of 570,000 tons of pulp in the year 1921, this being made possible by the depreciation in the value of foreign currencies. Rates suggested. On mechanical pulp, one-tenth of 1 cent per pound dry weight. On unbleached chemical pulp, two-tenths of 1 cent per pound dry weight ; on bleached chemical pulp, three-tenths of 1 cent per pound dry weight. It is also urged that, in addition to these specific duties, some special provision be made to give addi- tional protection against the competition of countries having debased currences. Hearings : Pages 4522-4523. Witness: Mr. A. C. Goodyear, representing the Bogalusa Paper Co., Buffalo, N. Y., and several manufacturers of chemical wood lates suggested. The object of the witness's appearance was to ask for such a change in paragraph 1610 as would provide for a duty of six-tenths of a cent a pound on unbleached pulp and 1 cent a pound on bleached pulp, with, in each case, 5 per cent ad valorem based on American valuation. This duty to apply only to chemical, as distinguished from ground wood pulp. It is urged that the chemical-pulp industry faces the most serious situation in its history. Manufacturing costs in the United States are so far in excess of foreign that competition is out of the ques- tion. Already American mills are running at a heavy loss to fur- nish work for their married employees. Foreign pulp is for sale in New York at $10 to $20 per ton less than the cost of manufacture in American mills. Tabulations submitted lead up to the* statement that "American chemical pulp mills are competing with labor paid one-tenth of the American wage." Witinesses: The West Virginia Pulp & Paper Co.. and chemical fiber manufacturers from different sections of the United States. (Briefs; no appearance at hearings.) Costs and selling prices. Chemical fibers are now (August, 1921) being offered on the American markets at the following prices per pound, delivered at New York or other Atlantic ports of entry : Sulphate, 2.25 cents. Unbleached sulphite, 2.75 cents. Bleached sulphite, 3.50 to 4 cents. American manufacturers can not meet these prices, which are far below the present replacement value of the raw material content alone. Size of industry. The chemical-fiber industry in the United States is one of the basic industries. Over $350,00d,000 capital is employed in it, and over 25,000 workmen are directly, and as many more indirectly, employed. These include thousands of farmers who cut pulp wood in their off seasons. Comparability. Manufacturers do not object to chemical fiber coming into America from Canada, or any other country, free of duty, so long as the rates of exchange are nearly the same. The principal foreign pulp-producing countries are Germany, Austria, Czechoslovakia, Finland, Norway, and Sweden. All of these have large holdings of forest lands, except Germany, whose wood supply is DIGEST OF TARIFF HEARINGS, H. R. 7456. 563 obtained from Russia, Finland, and Austria. The cost of produc- tion of chemical fibers in these European countries, particularly Austria, Germany, and Finland, is very much lower than in Amer- ica. Even if the costs were no lower, these countries now have an overwhelming advantage in this market through the demoralized condition of foreign exchange. European countries are erecting tariff walls to keep out German imports, which they fear. England is trying to solve the difficulty in some other way. The more ef- fective the means adopted by European countries.' the more intense w r ill be the German competition for export trade against the United States. In the manufacture of woo % d pulp, Germany has an excep- tional advantage because of the cheapness of labor and raw mate- rials. An increase in exports of wood pulp by Germany to the United States will necessarily result in lower costs of production there and higher costs of production here. The competition of other countries would be equally as destructive to the American industry. Rates suggested. The interests represented feel that the only kind of relief which is possible to obtain is something along the lines of the .enclosed proposed amendment to H. R. 7456, providing for a compensatory duty on certain basic commodities produced in this country. This duty is an amount equal to the difference between the cost of production in the United States and the price at which the foreign goods are sold or offered for sale in America. This would give domestic manufacturers something like an equal chance with foreign manufacturers. The latter would still have an advantage if their costs of production are lower than the domestic, the only means of protection being to reduce domestic costs. The American valuation plan will be of no benefit to the domestic manufacturer of any commodity on the free list; its application will be limited to ad valorem duties. Witness: The Filer Fiber Co. (Brief; no appearance at hear- ings.) Costs and selling prices. While it costs $60 to-day (1920) in America to produce a ton of kraft pulp, at low labor and material cost foreign paper is being sold in New York at $40 per ton, ex dock. The freight on this is $7.20 per ton, making a total cost of $47.20 per net ton delivered in Michigan. Domestic pulp delivered in Mich- igan at $47.20 means a net loss of $20 to $25 per ton. The company states that if it can not at least secure cost out of their production by September, 1920, they will have to shut down their mill for good. Comparability. The American pulp-wood industry is practically facing ruin because of the foreign pulp being dumped into the United States, solely because their foreign pulp manufacturers must secure money. The" various conversion paper makers take advantage of the foreign pulp that is being sold in the United States and work in conjunction with Xew York pulp brokers, who in turn import chemical pulps and sell them to the American consumer. Rates suggested. The company earnestly urges that a duty be placed on foreign chemical pulp coming from European countries, which will assist the pulp and paper industry throughout the United /States as well as Canada. If a duty were placed on chemical pulps roming from Sweden, Norway, Finland, and Germany, it would stimulate the pulp and paper industry and make it more uniform in 564 DIGEST OF TARIFF HEARINGS, H. R. 7456. price and otherwise. All of the chemical pulps come into the United States free of duty. Newspaper manufacturers desire pulp to come in free of duty from Canada, but this does not apply to European countries. Witnesses: Farmers producing pulp wood in all parts of the United States and manufacturers of cnemical wood pulp. (Brief; no appearance at hearings.) Size of industry. The chemical-pulp mills of the United States represent an investment of many millions of dollars, give employ- ment to thousands of men at high wages and, in 1920, afforded a market of 3,713.184 cords of domestic wood fit for no other purpose, giving income to thousands of farmers and landowners for a product available in no other market, Comparability. Despite the great sources of raw material for the chemical wood-pulp industry in America and the capital in- vested. Americans are condemned to stand idle and watch the wood- pulp industry follow the mechanical pulp industry into Canada, where lower manufacturing costs lure American capital by offering large profits for the time being. The labor which Americans could supply is bought in foreign markets, in Germany, Finland, Canada, Sweden, and Norway. The raw materials which Americans could supply are bought in the same markets. Germany. Finland, and Scandinavia are throwing thousands of tons of chemical wood pulp into the disorganized American market, selling at a price of 30 to 50 per cent higher than they ask in the foreign home markets. Rates suggested. The interests represented desire that a duty of 1 cent per pound be placed on bleached chemical pulp and 6 cents per pound on unbleached. These duties are asked because 50 to 60 per cent of the cost is labor and the* wages of labor used in the manufacture are higher in America than in foreign countries; also because chemical wood pulp production turns a raw material, other- wise worthless and unmarketable, into a valuable product and in- creases the area and value of tillable land. Foreigners can export free to America, but American manufacturers enjoy no reciprocal advantage. The duty suggested would give a revenue to the United States of from $3.000,000 to $5.000,000 per year a revenue which would not come from the consumer but be paid by the foreign pro- ducer. It would protect the American producer from unhealthy competition. American production fixes the price of chemical pulp in America. Remarks. There is enough wood standing and growing in the United States to maintain the chemical-pulp industry in perpetuity. Eliminating saw timber land, there are in the United States 132.859,000 acres of land adapted for nothing but the production of pulp wood. This land has now on it standing pulp wood estimated at 707,350,000 cords, a supply for nearly two centuries. The pulp mills can utilize all waste wood left over from the sawmills. Witness: The Book' Paper Manufacturers' Association. (Brief; no appearance at hearings.) Size of industry. The 1920 production of the entire book-paper industry was approximately 1,100,000 tons, valued at $220,000,000. The number of wage earners was about 22,000. The total wood pulp DIGEST OF TARIFF HEARINGS, H. R. 7456. 565 produced in the United States in 1920 was 3.799,835 tons, of which 2.054,253 tons were used by the domestic pulp mills themselves, the remaining 1.745,582 tons being available for the converting mills. The wood pulp imported by the converting mills in 1920 was 906,078 tons. Rates suggested. The association protests against a duty on wood pulp. Any such duty places the converting mills at a disadvantage in competition with those producing their own pulp and not depend- ent on the foreign supply. The Canadian Government is looking toward an export duty on wood products as a source of necessary revenue. If a considerable export duty is put on wood pulp by Canada and- there is also an import duty placed on it by the United States the price to the consumer of wood pulp will be unfairly high. Members of the association are adjusting themselves to the new economic conditions, and by every effort possible have reduced, and are reducing their costs so as to quote lower prices for their finished product to the consumer. An import duty on wood pulp would tend toward maintaining or increasing the high cost of -book paper. As such it would be a tax on education and should be discouraged. Hearings : Pages 4518-4519. Witness: Mr. Peter G. Thomson, representing the Miami Valley Paper Manufacturers' Association. (Brief.) Size of industry. The association represents 19 paper mills located between Cincinnati, Dayton, and Chillicothe, Ohio, having a com- bined annual output of 473,000 tons, or about 10 per cent of all the paper produced in the United States, exclusive of newsprint. Rates suggested. The members of the association are convinced that the wood-pulp industry does not require protection. The united capacity of the domestic pulp mills is insufficient for any extensive period, owing to the limitation of a diminishing wood supply. The dependence upon foreign forests is increasing yearly and there is no prospect of reducing the amount of pulp used. While thus favoring the retention of wood pulp on the free list, the association requests that an equivalent duty be placed on imported finished paper in the event of a duty on wood pulp being decided upon. Hearings : Pages 4519^522, Witness: Mr. Frank C. Overton, representing the Association of American Wood Pulp Importers. (Brief.) Size of industry. The need of protection for the wood-pulp in- dustry is denied, the witness maintaining that the industry in this country has been developed to its utmost capacity, the diminishing supply of wood being an effective limitation. This being so. paper manufacturers are bound to obtain a portion of their supplies from abroad a factor also favoring the conservation of domestic growths for future generations. When so much is being done by govern- mental agencies in the latter direction, would it not be inconsistent for Congress to take wood pulp from the free list? The percentage of foreign wood required by the industry must, indeed, increase as time goes on. Taking into account the 146 American mills manufacturing chemi- cal pulp, of which only 15 manufacture pulp exclusively for sale, the product is the raw material of about 600 paper mills which do not 7713422 37 566 DIGEST OF TARIFF HEARINGS, H. R. 7456. make pulp. It is obvious, therefore, that the paper manufacturers who buy pulp employ in the aggregate a vastly greater number of workmen than do the mills manufacturing pulp and that a tariff on pulp would discriminate against 75 per cent of the paper makers in the United States. The effect of such a tariff upon the public must also be borne in mind; paper, in all its multitudinous uses, would be increased in price, to the detriment of every member of the community. PARAGRAPH 1614. VANADIUM. FAVORING HIGHER DUTIES : The Colorado Vanadium Corporation, New York. (Brief; no appearance at hearings.) Rates suggested. Statistics are quoted from the United States Geological Survey as to the metallic vanadium content of vanadium ores produced in the United States from 1912 to 1918, inclusive. The figures indicate that during the period mentioned the vanadium con- tent of domestic ores was 3,031 tons, as compared with 3,392 tons from Peru. Since the domestic production almost equals the im- ports, it is urged that vanadium ore be made dutiable in order to foster the development of resources in Colorado, Arizona, Utah, and New Mexico. PARAGRAPH 1620. COPRA. WITNESS, AND INTERESTS REPRESENTED. FAVORING HIGHER DUTIES : Mr. A. M. Loomis, representing the National Dairy Union. , FAVORING PROPOSED DUTIES : Mr. G. H. Gillespie, representing the Vegetable Oil Corporation, Berkeley, Calif. Mr. J. L. Berrickx, representing the Gorgas Pierie Manufacturing Co., Phila- delphia, Pa. The American Nut & Seed Oil Corporation. (Brief.) Hearings : Pages 1174-1183 of Schedule 1. Witness: Mr. A. M. Loomis, representing the National Dairy Union. Robes suggested. That copra be taken off the free list and made dutiable at not less than 5 cents per pound. Hearings: Pages 4542-4554. Witness : Mr. S. H. Gillespie, vice president and managing director Vegetable Oil Corporation, Berkeley, Calif. Selling price and costs. The cost of copra to-day is about 4J cents per pound landed at the Pacific coast; the price for oil is 7f cents. There is only 60 per cent oil in copra. Size of industry. In 1920 there were 218,000,000 pounds of copra imported into the United States, of which only 7 per cent came from the Philippine Islands, compared with 70 per cent in 1912. The capital invested in the domestic copra crushing industry is more than $12,000,000. Rates suggested. Free. DIGEST OF TAEIFF HEARINGS, H. K. 7456. 567 Remarks. About one-half the copra used is imported in American ships which would lose this business if a duty were im- posed. Of the oils and fats used in lard substitutes in 1919, only 1.1 per cent of the total amount was coconut oil. In the manufac- ture of filled milk from skimmed milk and coconut oil, only about 3,400,000 pounds of coconut oil were used in 1920 out of a total consumption of several hundred million pounds of oil. The com- petition with filled milk compensates the dairymen producing whole milk by broadening the market for the large amount of skimmed milk produced and which is thereby enhanced in value. Hearings : Pages 4554-4558. Witness : Mr. J. L. Berrickx, representing the Gorgas Pierie Manu- facturing Co., Philadelphia, Pa. Size of industry. Normally, 250,000 pounds of copra are crushed in this country annually for coconut oil, which is the chief ingredient for many soaps with which cottonseed oil is used. Rates suggested. Free' list. Remarks. If cottonseed oil- can take the place of coconut oil the South will have to grow two or three million bales of cotton more than its normal crop to obtain the necessary seed. This would tremendously lower the price of the main crop cotton. The crush- ing of cottonseed oil is a seasonal business which should welcome copra, as the latter could be crushed during the period when cotton- seed is not available. If copra were embargoed, margarine would still be made from the huge surplus of oleo oil and neutral lard now exported. A duty on coconut would protect the crushers in the Philippine Islands, who would send coconut oil to this country be- cause they are able to outbid United States' crushers by at least $15 per ton of copra. Consequently, a duty on copra would bar importa- tion of this material in the United States and cause the closing down of copra crushing mills; all coconut oil would be expressed in the Philippine Islands, while tremendous amounts of copra would be diverted to Europe for crushing, depriving this country of a large export market. Witness : The American Nut & Seed Oil Corporation, New York. (Brief; no appearance at hearings.) Size of industry. About $1,000,000 capital invested. Rates suggested. Copra to be specifically retained on the free list. PARAGRAPH 1625. ESSENTIAL OIL. WITNESS, AND INTEREST REPRESENTED. REQUESTING RECLASSIFICATION : Mr. Harry C. Wright, representing the American Perfumers' Association. Hearings : Pages 1001-1010 of Schedule 1. Rates suggested. That bois de rose and cananga be specifically mentioned in paragraph 1625. These were omitted because bois de rose was considered to be identical with linaloe and cananga iden- tical with ylang-ylang. The association is convinced that there is such an essential difference between these materials and those to which they are related that it would be a serious error not to men- tion them specifically in this paragraph. 568 DIGEST OF TARIFF HEARINGS, H. R. 7456. PARAGRAPH 1626. VEGETABLE OILS. WITNESSES. AND INTERESTS REPRESENTED. FAVORING HIGHER DUTIES : The Oil Seeds Co., New York City. (Brief.) Mr. Fred H. Lysans, Seattle, Wash. Mr. John Aspegren, representing the Portsmouth Cotton Oil Refining Cor- poration, and others. Mr. I. M. Simmonin, representing C. F. Simmonin's Sons, Philadelphia, Pa. (Brief.) Witness: The Oil Seeds Co. (Brief; no appearance at hearings.) Rates suggested. Copra should be specifically provided for in paragraph 1619 (free list.) Coconut oil : An export tax is suggested on Philippine coconut oil, equal to the duty on that oil from other countries. Palm-kernel oil : 2 cents per pound, same as coconut oil. Sesame oil : 24 cents per pound. Perilla oil : 2| cents per pound. Remarks. If it is intended to have copra enter free, it should be specifically provided for; otherwise it might be held dutiable at 1 cent per pound under paragraph 755. Coconut oil, dutiable at 2 cents per pound, will enter almost en- tirely free from the Philippines, and domestic copra crushers would have to compete against the low costs there. An export tax is sug- gested to remedy this. Palm-kernel oil is a good substitute for coconut oil and should be dutiable at the same rate. Sesame oil is a good substitute for cottonseed and peanut oils and should bear a duty. Perilla oil is a drying oil similar to linseed oil, and should bear the same rate of duty. Witness: Mr. Fred H. Lysans, Seattle, Wash. (Brief; no appear- ance at hearings.) Remarks. The imposition of a substantial duty on oriental wood and vegetable oils, and the admission duty free of the raw materials from which they come, would result in transferring the immense oil-crushing business of the Orient to the United States, where more advanced methods would give higher oil yields. In addition, five industries would be established here, i. e.. wood oil, fine potash, apetic acid, carbon black (all by-products of Chinese wood-oil crush- ing and refining), and casein, a by-product of the soya bean. Hearings : Pages 4563-4567. Witness : Mr. John Aspegren, representing the Portsmouth Cotton Oil Eefining Corporation and others. Size of industry. The Portsmouth Corporation's factory has turned out, during the last two years, over $20,000.000 worth of manufactured articles each year. Over 95 per cent of the business of the represented interests consists in crushing cotton seed and refining the crude cottonseed oil and making it into high-grade finished products. With the exception of peanuts and olives, prac- tically all seeds are crushed and made into oil and oil cake. DIGEST OF TARIFF HEARINGS, H. R. 7456. 569 This country exports oils and fats in excess, probably, of 2,000,000 barrels more than it imports. The country produces more cotton oil than the olive oil product of the entire world. The witness, not averse to a protection for this industry when the emergency tariff was under consideration a year ago, now asks to be protected against this protection. Sentiment has now swung around, and not a single cotton-oil refiner is in favor of protection. This revulsion of feeling has been brought about by changes in ocean transportation during the war. when oil seeds and oils were rushed across to America and the finished products were manufactured here and shipped to Europe. A large part of what was gained in this way was retained, but the passing, of the emergency tariff led to the loss of the trade, which is now controlled by England and Holland. Rates suggested. Free list. Protection for the cotton-oil indus- try is regarded as entirely misapplied and as a tremendous detriment to the country. Witness : Mr. I. M. Simmonin. representing C. F. Simmonin's Sons, Philadelphia, Pa. (Brief; no appearance at hearings.) Remarks. Attention is called to the facts that palm kernel oil, which can be used to better advantage than coconut oil, is free in H. R. 7456, while coconut oil is to bear a duty of 2 cents per pound ; and that sesame oil, which is superior to peanut oil, is free, while peanut oil is dutiable at 2 cents per pound. As these defects will result in a large increase of importations of these free oils, a remedy for them is requested. PARAGRAPH 1626. CHINESE WOOD OIL,. WITNESS. AND INTEREST REPRESENTED. FAVOKING PROPOSED DUTIES : Mr. Arthur Davis, president Standard Varnish Co., New York City. Hearings : Pages 4570-4575. Size of industry. There are about 350 varnish manufacturers in the United States, doing their best to develop export business. Rates suggested. Free. Remarks. In a brief submitted by the witness, it is stated that Chinese tung oil, or China wood oil. is not produced commercially in the United States, and is not a substitute for linseed oil. In * the varnish industry it is used with American gums and rosin, the con- sumption of the latter representing about 30 per cent of the domestic rosin production. Rosin can not be used with linseed oil. There is no duty on China wood oil into Great Britain or Canada, conse- quently, the domestic industry'would be unable to compete with these countries in the markets of the world, to which supplies would be diverted should there be a tax on the oil. There are heavy American investments in tanks and facilities in China for handling China wood oil. A tariff on China wood oil would not produce a large revenue, owing to a decrease in imports. The varnish industry would be forced to use inferior materials. 570 DIGEST OF TARIFF HEARINGS, H. K. 7456. PARAGRAPH 1626. INEDIBLE OLIVE OIL. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED DUTIES : Mr. A. M. Burkhardt, representing the Palm Olive Co., of Milwaukee, Wis. Hearings : Pages 4568-4569. Size of industry. In 1920 imports of inedible olive oil were 8,600,- 000 pounds and in 1921 (10 months), 12,032,875 pounds, of which latter amount this concern used 43.98 per cent of the entire importa- tion. Rates suggested. Free list. Remarks. There is no domestic production of olive oil foots soap makers' material. In 1918, when the Italians embargoed the exporta- tion of this material, it was necessary to bring in soap made of olive- oil foots from which the glycerin had been recovered prior to ex- portation. The California output is for edible purposes, and the highest pro- duction in any year has been 200,000 gallons. Olive oil foots is nec- essary for the manufacture of this company's soap, which is nation- ally advertised, emphasizing the fact that olive oil is used. PARAGRAPH 1626. PALM AND PALM-KERNEL OIL. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED DUTIES : Mr. Walter T. Hathaway, manager of purchasing department, Colgate & Co., Jersey City. Hearings : Pages 4558-4563. Size of industry. Imports of palm oil were 9,640 short tons in 1919, having decreased from 20,310 tons in 1916. In 1917 there were consumed by the soap industry 27,345,000 pounds of palm oil, and about 10,000,000 pounds was consumed annually in the tin-plate in- dustry. In 1917 the soap industry consumed 4,762,000 pounds of palm-kernel oil, 6,417,000 pounds of Chinese vegetable tallow, and 5,000 pounds of sesame oil. Rates suggested. Free list. Remarks. Palm oil and palm-kernel oil are particularly suited for the manufacture of soap. The industry can not afford to pay more than international prices on these oils. As there is no palm industry in America, and there can be none, palm oil is competitive with no vegetable oil of domestic production. The same remarks apply to palm-kernel oil, sesame oil, and vegetable tallow. PARAGRAPH 1627. LUBRICATING OILS AND GREASES. FAVORING PROPOSED DUTIES : The Harold Newlin Hill Co., Philadelphia, Pa. (Brief; no appearance at hearings.) Rates suggested. Lubricating oil and grease, containing petroleum as the article of chief value. Free list. DIGEST OF TAKIFF HEARINGS, H. R. 7456. 571 Remarks. The petroleum industry needs no protection. Only a small amount of lubricating oils and greases, of high quality and for special purposes, is imported. As lubricating oils and greases are absolutely essential to existence, their being placed on the' free list would not be harmful. PARAGRAPH 1627. PETROLEUM. (See also Paragraph 1603, Asphalt.) WITNESSES, AND INTERESTS REPRESENTED. FAVORING HIGHER DUTIES : United States Senator John W. Harreld, of Oklahoma. Mr. Harry M. Smith, representing Mid-Continent Oil and Gas Association. Mr W. H. Gray, representing Oklahoma Oil Men's Protective Association. The Okmulgee District Oil and Gas Association, Okmulgee, Okla. FAVORING PROPOSED DUTIES: The Okmulgee District Oil and Gas Association, Okmulgee, Okla. Mr. J. R. Draney, representing the Asphalt Association, New York City. Mr. Stephen Fleming, representing the phosphate miners of Florida. Mr. M. O. Eldridge, representing the American Automobile Association, Washington, D. C. Mr. M. J. Murphy, representing the Island Oil & Transport Corporation, New York City. Mr. M. ,T. Spillman, Washington. D. C. Mr. J. B. Klumpp, representing the American Gas Association, Philade}- phia. Pa. Mr. James L. Ackerson. representing the Atlantic Coast Shipbuilding Asso- ciation, Philadelphia, Pa. Mr. C. H. McDowell, representing the National Fertilizer Association. (Brief.) The Headley Good Roads Co.. Philadelphia, Pa. (Brief.) Hearings : Pages 4575-4594. Witness: United States Senator John W. Harreld, of Oklahoma. Rates suggested. Thirty-five cents per barrel on crude oil; 25 cents per barrel on fuel oil. Remarks. The witness referred to his speech of August 23, 1921, in the Senate, in which he had urged protection for the 21,000 inde- pendent refiners of petroleum by the enactment of a duty on crude oil. Such action would prevent monopolistic interests from dumping quantities of Mexican oil on the market to break the independent producers and then buying out the latter at low prices. (Note. These 18 pages are largely taken up by a controversy be- tween the witness and Mr. Herbert G. Wylie, representing the Pan- American Petroleum & Transport Co. The contribution of the for- mer is a reprint of the speech referred to above, discussing at length the steps taken by other countries in this field and criticizing the actions of persons connected with the Pan- American Co. Mr. Wylie's contribution, in reply to the speech, defends the action of oil companies alleged by Senator Harreld to be un-Ameri- can in character.) Hearings : Pages 4594-4648. Witness: Mr. Harry M. Smith, secretary the Mid-Continent Oil & Gas Association. Costs and selling prices. The present average cost of producing Mid-Continent oil is about $1.40 to $1.50 per barrel, compared with 572 DIGEST OF TARIFF HEARINGS, H. R. 7456. $1.75 in the spring of 1921. The present selling price is $2 per bar- rel, compared Avith a low price of 90 cents to $1 in June and July, 1921. Mexican crude, best grade, costs about 65 cents per barrel (including Mexican export tax) at Gulf ports, and sells for about $1 ; but the best grade Mexican oil contains not over 10 per cent gasoline, whereas Mid-Continent oil contains 30 to 40 per cent. By dumping large quantities of Mexican oil on the American market, violent fluctuations in the price of the domestic product are produced, re- sulting in the selling of the latter below cost. Size of industry. The domestic petroleum industry has a capital investment of $3,000,000,000 and employs over 1,000,000 workers.' The 1920 production of crude oil was 443,402,600 barrels. This fills domestic consumption needs and half of the exports. Rates suggested. A rate of $1 per barrel on crude oil. Remarks. Protection is desired as a conservation measure. A flood of foreign oil would cause a shutdown of those wells producing only 3 or 4 barrels per day, aggregating 40 per cent of the domestic production, with the result of an irrecoverable loss of the output of these wells. A countervailing duty has also been suggested, which, as pointed out by the witness, would prevent the levying of exorbitant export duties by foreign countries. Without a protective duty the inde- pendent domestic industry is placed at the mercy of large and con- trolling refining interests. Importations of crude oil from Mexico were 106,175,000 barrels in 1920, or over 100 per cent increase compared with 1919. Hearings : Pages 4648-4667. Witness: Mr. W. H. Gray, representing the Oklahoma Oil Men's Protective Association. Rates suggested. A countervailing duty equal to the export and import tariffs levied by foreign countries exporting and importing petroleum to and from the United States. On crude gasoline, 1 cents per gallon ; on refined gasoline, one-half cent per gallon. Remarks. Mexico levies an import duty of $3 per barrel on fuel oil. This results in loss of business to domestic refiners, who are on that account unable to compete in the fuel-oil market in Mexico. Witness : The Okmulgee District Oil and Gas Association, Okmul- gee, Okla. (Brief; no appearance at hearings.) Remarks. It is contended that Standard Oil companies, by flood- ing the country with Mexican oil, have so reduced prices that they have been enabled either to buy out, at low figures, producing proper- ties developed by independent capital, or to force them out of busi- ness altogether. Hearings : Page 4711. Witness : Mr. J. R. Draney, representing the Asphalt Association, New York City. Size of industry. Over 68,000,000 square yards of asphalt type pavement will be laid in cities and on country highways of the United States in 1921. Nearly 60 per cent of the asphalt used in this country is derived from Mexican crude oil, besides a tremendous volume of liquid Mexican asphalt for treating macadam, dirt, and gravel roads. It is estimated that the aggregate tax on road building, if the duty DIGEST OF TARIFF HEARINGS, H. R. 7456. 573 on oil becomes effective, would be $2,500,000 a year for asphalt used from Mexico. Rates suggested. Crude oil to be retained on the free list. Remarks. It is conceded on every hand that the United States road-building policy should be vigorously pushed. Congress, in the last six years, has appropriated many millions of dollars for road building under the Federal highway system. The States are spend- ing millions: the counties, cities, and towns throughout the country are all spending money on roads and streets. Hearings : Pages 4672-4679. Witness : Mr. Stephen Fleming, representing the phosphate miners of Florida. Size of industry. The companies represented bv this association normally consume from 3,000,000 to 3,285,000 barrels of Mexican fuel oil, which is used in preference to domestic oil because of a say- ing of $2.50 per barrel, chiefly in the matter of freight. The Ameri- can refineries were said to have refused to make bids to Mr. Fleming's fertilizer company, because high freight rates prevented competition with Mexican oil. Rates suggested. Free list. Remarks. The witness filed a brief (pp. 4679-4681) of Mr. C. H. McDowell, president National Fertilizer Association. The association regards with apprehension the announced purpose of representa- tives of certain oil-producing companies to urge a tariff on imports of crude oil. Such a step would, it is urgedj greatly increase the cost of fertilizer while bringing no corresponding benefits to domes- tic oil producers. Hearings : Pages 4695-4697. Witness: Mr. M. O. Eldridge, representing the American Auto- mobile Association, Washington, D. C. Rates suggested. Free list. Remarks. The production of automobiles has increased mora rapidly than the production of gasoline. In a few years it will therefore be necessary to purchase immense quantities of foreign oil. The users of the automobile, truck, tractor, and gasoline stationary engine, now vital and necessary in everyday life, would have to bear additional costs if a tax were placed on imported petroleum. Sixty per cent of the asphalts used in the United States for road building and roofing purposes is imported from Mexico. A tariff in this connection would not be protective, as there are no native as- phalts of the kind imported produced in this country, and there is no known source of supply. Hearings : Pages 4681^693. Witness : Mr. M. J. Murphy, representing the Island Oil & Trans- port Co., of New York City. " Suggested rates. Free list. Remarks. Eighty-four per cent of the oil imported to the United States from Mexico" in October, 1921, was by American concerns, of which the Island Oil &" Transport Co. is one. Of this amount only 18.75 per cent was shipped by the so-called Standard Oil subsidiaries. A tariff on oil will encourage the building of refineries in foreign countries, to the detriment of our refining industry, and to divert imports of fuel oil to the free markets of the world. 574 DIGEST OF TARIFF HEARINGS, H. R. 1456. The interests of the farmers who own 400,000 tractors and 2,500,000 stationary engines, 8,000,000 owners of automobiles, 46,000,000 con- sumers of manufactured gas, of the railroads, of our merchant ma- rine, and of the United States Navy are opposed to a tariff on crude oil. Hearings : Pages 469^4695. Witness: Mr. J. W. Spillman, Washington, D. C., representing himself. Rates suggested. Free list. Remarks. The American farmer, consuming about 1.337,000,000 gallons of gasoline annually, is vitally interested in lower prices and in the ultimate saving for the future of the domestic product ; also, the manufacture of numerous products needed by the farmer is de- pendent upon petroleum. These include medicines, dyes, paints, and varnishes, roofing, road construction, lubricating oils" for machinery of all kinds, gaslight, and gas fuel. He is therefore opposed to a tariff on crude oil. Hearings: Pages 4697-4705. Witness: Mr. J. B. Klumpp, representing the American Gas Association, Philadelphia, Pa. Size of industry. -Petroleum or its products is used in about 65 per cent of all the manufactured gas used in the United States, amounting to 160,000,000,000 cubic feet annually. Over 24,000,000 barrels of oil are thus consumed. The Atlantic seaboard companies use about 60 per cent of this, all delivered by water from fields other than the Mid- Continent. Rates suggested. Free list. Remarks. A duty of $1 per barrel on petroleum would increase the price of gas by 12 to 15 cents per thousand cubic feet, or a total of $25,000,000 yearly. A duty of 35 cents would increase the cost about 5 cents. Coal gas plants require double the capital invest- ment of water gas plants, and their present rate of increase, though rapid, hardly meets the increasing demand for gas. Hearings: Page 4712. Witness : Mr. James L. Ackerson, representing the Atlantic Coast Shipbuilding Association, Philadelphia, Pa. Size of industry. Seventeen hundred vessels, flying the United States flag, or 62 per cent of the United States merchant marine, are oil burning and burn annually 40,000,000 gallons of oil. Rates suggested. Free list. Remarks. A tax of 25 cents per barrel would mean about $10.- 000,000 extra cost; a standard 10,000-ton ship, burning about 215 barrels per day, would cost $52 more to operate daily. A large liner would cost $10,000 more to operate on one Atlantic round trip. Hearings : Pages 4679-4681. Witness: Mr. C. H. MacDowell, representing the National Fer- tilizer Association. (Brief.) The brief expresses the apprehension witk which the association regards the announced purpose of certain oil-producing companies to urge a tariff duty on imports of crude oil. The association believes industry in general to be in no position to take on unnecessary addi- DIGEST OF TARIFF HEARINGS, H. R. 7456. 575 tional taxation. To the fertilizer industry in particular, struggling as it is out of a period of unparalleled depression, the burden of a tariff duty on oil would be disturbing and discouraging. Many of the large plants on the Atlantic seaboard depend upon Mexican fuel oil for power. Phosphate rock, the principal ingre- dient of commercial fertilizer, comes mainly from Florida, where all the mines use Mexican crude oil for fuel. The oil consumption of one company, running at full capacity, is stated to be about 35,000 barrels monthly, or at the rate of 1-fo barrels for each ton of rock- phosphate rock product. The introduction of fuel oil greatly stimu- lated the business of Mexican export oil. Rates suggested. It is submitted that a tariff duty on crude oil would greatly increase the cost of fertilizers without bringing any corresponding benefits v to domestic oil producers. Crude oil should remain on the free list. Witness : The Headley Good Roads Co., Philadelphia, Pa. (Brief ; no appearance at hearings.) Costs and selling prices. Immense quantities of Mexican petro- leum are used to make asphalt for roads. The proposed duty would increase the cost of highways to the extent of $2 per ton of asphalt used. The only domestic petroleum suitable for road asphalt is the California, which is not available to eastern markets. Rates suggested. Free list. PARAGRAPH . 1627. FUEL OIL. WITNESSES, AND INTERESTS REPRESENTED. FAVORING PROPOSED DUTIES : Mr. Samuel Powell, Providence, R. I., representing certain New England interests. Mr. D. A. Welch, representing the copper producers of the southwestern district of the United States. Mr. L. G. Huntley, Lawton, Okla. (Brief.) The Commonwealth of Massachusetts. (Brief.) The New -Cornelia Copper Co., Calumet, Mich. (Brief.) Mr. Alfred P. Thorn, general Counsel of the Association of Railway Executives. Hearings : Pages 4706-4710. Witness: Mr. Samuel Powell, representing certain firms, indi- viduals, and associations in New England. Size of industry. A duty on crude oil is protested by Mr. Powell in behalf of over 280 firms, individuals, and associations which he represents, using over 200,000,000 gallons of fuel oil annually; the> would be obliged to pay higher prices for oil if a duty were imposed. Rates suggested. Free list. Remarks. The witness submitted a partial list of buildings, cover- ing about 380 structures, in which interests represented by him have installed fuel-oil burning equipment and to which they supply fuel oil. Hearings : Pages 4713-4715. Witness: Mr. D. A. Welch, representing the copper producers of the southwestern district of the United States. Size of industry. The copper producers of the southwestern dis- trict of the United States produce normally 800,000,000 pounds of 576 DIGEST OF TARIFF HEARINGS, H. R. 7456. copper per year, and employ 33.000 men. They consume 4.500,000 barrels of oil per year. At present the industry is closed down. While labor and materials are still high, copper sells at present for nearly prewar prices. Rates suggested. Free list. No tariff on copper is desired. Remarks. The proposed tax on crude oil would increase the cost $1.250,000 per year to the copper industry in the Southwest. Cop- per refined by using oil as a fuel is superior to that obtained by us- ing coal. All of me southwestern copper for export is refined on the Atlantic seaboard, where fuel oil is used as a fuel in refining, and in generating power. Witness: Mr. L. G. Huntley, Lawton. Okla. (Brief; no appear- ance at hearings.) Costs and selling prices. It is quite possible to operate profitably small pumping wells at 60 cents per barrel ; tne witness is interested in several such properties. Rates suggested. Free list. Remarks. The true cause of the agitation for a duty on oil is not the flood of imports of Mexican oil. but the general shutdown of industry and commerce. The low prices for crude oil are primarily the result of lessened consumption, reflected in decreased imports of Mexican oil. Witness: The Commonwealth of Massachusetts. (Brief; no ap- pearance at hearings.) Costs and selling prices. A duty of 25 cents per barrel on fuel oil and 35 cents per barrel on crude mineral oil, as have been sug- gested, would add $5.000,000 to the annual fuel bill of New England, which is largely dependent upon outside sources for its supply of fuel. Rates suggested. Free list. Remarks. A partial list of fuel-oil users in Massachusetts is g'ven. Mexico is the only economical source of fuel oil for New ngland. Witness: The New Cornelia Copper Co., Calumet. Mich. (Brief: no appearance at hearings.) Rates suggested. Free list. Remarks. Practically all of the fuel oil used by the copper com- panies of the Southwest comes from Mexico. The freight rate in- crease per heat unit has been greater in the case of coal than in oil, making it more expensive to use the former, which is too expensive in any case, and is not as well adapted as oil for copper smelting. Hearings : Pages 4667-4672. Witness : Mr. Alfred P. Thorn, general counsel of the Association of Railway Executives. Size of ^industry. The railroads of the United States consumed 55,590,783 barrels of fuel oil in 1920. chiefly in the Southwestern States and California. Rates suggested. Free list. Remarks. If the price of fuel oil were raised by a tariff on crude oil and the railroads were compelled to rely on domestic supplies, they would soon have to discontinue the use of oil as a fuel, owing to- the excessive price. This would compel the railroads to revert to DIGEST OF TARIFF HEARINGS, H. R. 7456. 577 coal, at a tremendous increase in operating expenses for hauling coal long distances, and great expense in changing oil burners back to coal burners. Experience has shown that Mid-Continent producers could not be relied upon as a constant source of available fuel on long- term contracts. About half the present railroad fuel-oil consumption is Mexican. PARAGRAPH 1627. CRUDE PETROLEUM OIL, AND PARAGRAPH 1603. ASPHALT. WITNESS, AND INTEREST REPRESENTED. FAVORING LOWER DUTIES : Mr. Herbert Abraham, representing the Prepared Roofing Association, of New York City. Hearings : Pages 4633-34. Size of industry. This industry is carried on in 48 factories in the United States, the production of which represents 70 per cent of all types of roofs used in this country. In 1920, 2,837,500,000 square feet of asphalt roofing and shingles were manufactured. F6r these, asphalt derived from Mexican petroleum is the most suitable, 484,- 000 tons having been used in 1920. A tax of 35 cents per barrel on crude oil would increase the cost about $1,685,000 annually, at a time when a revival of the building program is of prime importance to relieve unemployment and reduce high rentals. Rates suggested. Free list. PARAGRAPH 1635. MURIATE OF POTASH, SULPHATE or POTASH, AND KAINITE. WITNESSES, AND INTERESTS REPRESENTED. FAVORING HIGHER DUTIES : Mr. Wilbur La Roe, jr., representing the United States Potash Producers' Association. FAVORING PROPOSED DUTIES : Mr. J. D. Cameron Bradley, representing the American Agricultural & Chemical Co. Mr. S. D. Crenshaw, representing the National Fertilizer Association. Mr. M. A. Huston, manager Soil and Crop Service of the Potash Syndicate, New York City. Mr. Walter L. Minch, president Minch Bros.. Bridgeton, N. J. Hon. John S. Benhani, Member of Congress from Indiana. Dr. Frank App, representing the New Jersey Federation of County Boards of Agriculture and the New Jersey State Grange. Mr. Charles McCarthy, Honolulu, Hawaii. Mr. T. C. Atkeson, representing the National Grange. (Brief.) The Baugh Chemical companies. (Joint brief.) Hearings : Pages 4757-4792. Witness : Mr. Wilbur La Roe, jr., representing the United States Potash Producers' Association. Costs and selling prices. American potash producers are now able to produce at a cost of $1 to $1.10 per unit of K 2 O. The selling prices of the German Potash Syndicate to the 34 American fertilizer companies is 64 cents per unit of potash. Therefore the proposed duty of 50 cents per unit of K 2 O would be sufficient protection. The highest freight rate that can be figured California to the At- 578 DIGEST OF TARIFF HEARINGS, H. R. 7456. lantic seaboard is 30 cents per unit of potash instead of 50 cents r as previously brought out. Size of industry. In Searles Lake, Calif., and in Wyoming, there are 30,000,000 tons of potash enough to supply the demand of the United States for a number of years at the pre-war rate of consump- tion. There are also thousands of lakes in Nebraska, only a few of which have been developed. The American producers can easily make 100,000 tons of pure potash per year. California potash salts are mostly 60 per cent potash as compared with 50 per cent of the highest grade German salts, and 12 to 15 per cent of lower grade German salts which fill the bulk of fertilizer requirements. The Nebraska salts are about 30 per cent K 2 O, which would figure at the higher freight rate to the Atlantic seaboard per unit of potash, but markets are to be found in adjoining States. Rates suggested. A sliding scale for five years, beginning with 2^ cents per pound (actual potash content). Remarks. The statement is made that the Virginia-Carolina Chemical Co. one of the 34 concerns which contracted to buy Ger- man potash is a stockholder in two German chemical companies. These 34 concerns consume upward of 60 per cent of the potash used in this country. The remaining 25 per cent of their potash require- ments for 1922 has been contracted for with the Alsatian Potash Syndicate, contract with which is given (pp. 4682-4691). The cost to the American farmer under the proposed tariff would be 2 cents per bushel in the case of potatoes and 25 cents per acre in the case of cotton. Hearings : Pages 4716-4725. Witness: Mr. J. D. Cameron Bradley, representing the American Agricultural Chemical Co. Costs and selling prices. The present German and French price of muriate of potash is 85 cents per unit of K 2 O, and of 20 per cent potash salts 70 cents per unit of K 2 O. Size of industry. The witness estimates that between one-fifth and one-sixth of this country's consumption of potash is produced in the United States. Comparability. Prior to the war some potash was obtained from Utah, some from Nebrftska^nd some from southern California. The amounts were small in percentage practically none. Potash produced from the Nebraska lakes is low grade and inferior in qual- ity to the German article, either for direct application or for use in mixed fertilizers. The California product contains a certain amount of borax, deleterious to plant life, and the witness's company is un- willing to risk its use. In reply to a question, the witness agreed that one-ninth or one-tenth of the potash manufactured in this coun- try is as good as the German potash, with the reservation that " the Americans have not made as high a grade of potash, which is what is desired." Rates suggested. That potash for fertilizer purposes remain oa the free list. Hearings : Pages 4725-4743. Witness: Mr. S. D. Crenshaw. representing the National Fer- tilizer Association. DIGEST OF TARIFF HEARINGS, H. R. 7456. 579 Costs and selling prices. During the war American potash sold for as high as $4.50 per unit of K 2 L>, or six to seven times the pre- war price of German potash, and in none of those years was more than 54,000 tons of pure potash produced. There is no reason to be- lieve that five years of protection would enable domestic producers to approach pre-war prices, quantity, and quality. Freight rates on American potash average 40 to 50 cents per unit to consuming points. Rates suggested. Free list. Remarks. The American farmer should not be taxed a sum esti- mated at about $54,000,000 to nurse a war-time business to self- support. ' Certain forms of potash much used and desired in the United States can not be produced here. The high borax content of certain American potashes causes damage to the crops on which they are used. The contract between the German Potash Syndicate and 34 American fertilizer companies is given in full. The wit- ness deprecates the belief in the low value of the German mark as the cause of present potash prices. Many years ago, with normal exchange, a contract was made for German potash at about 30 per cent below present prices. Hearings : Pages 4752-4757. Witness: Mr. H. A. Huston, manager of Soil and Crop Service of the Potash Syndicate, New York City. Rates suggested. Free list. Remarks. Testimony is presented contrary to that given before the Ways and Means Committee by Mr. H. W. Smith and Mr. W. La Roe "regarding the effects of a tariff on agricultural potash. The tariff would mean a direct tax of 62| cents on a 200-pound bag of kainite and $2 50' on a 200-pound bag of muriate or sulphate of potash. Hearings: Pages 4744-4747. Witness: Mr. Walter L. Minch. president Minch Bros., Bridge- ton, N. J. Rates suggested. Free list. Remarks. During the war-time potash shortage, the New Jersey farmer was barely able to pa.y his bills, because the limited amount of potash which he could obtain would not grow sufficiently large crops. The low per cent of potash used decreased the fertility of the fields. A duty on potash would materially increase the farmers' expenses for fertilizers. Hearings: Pages 4747-4750. Witness: Hon. John S. Benham, Member of Congress from the State of Indiana. Rates suggested. Free list. Remarks. Testimony was presented protesting against the in- creased costs which the farmer would have to bear if a duty were levied on potash. Hearings : Pages 4750-4752. Witness : Dr. Frank App, representing the New Jersey Federation of County Boards of Agriculture and the New Jersey State Grange. The witness entered into the cost to the individual farmer of the potash tariff, H. R. 7456, paragraph 1635. The cost to New Jersey, a small Stajte consuming about 160.000 tons of fertilizers of 4 per cent 580 DIGEST OF TARIFF HEARINGS, H. R. 7456. potash, would be $320,000, or about $11 per farm as an average. Using 8 per cent goods, as is now largely the case, the cost would be doubled. The typical New Jersey potato grower, producing about 40 acres of potatoes, would be charged, on a 6 per cent potash basis, $120 to support the proposed tariff. At 8 per cent, used by most farmers, it would mean $160 per farm, equivalent to 2 cents a bushel. Tomato and sweet-potato growers would be similarly affected. Rates suggested Free list. Hearings : Pages 4792-4793. Witness: Mr. Charles McCarthy, Honolulu, Hawaii. In connection with proposals for placing a duty on fertilizers, the witness laid stress upon Hawaii being an agricultural country, pro- ducing sugar under abnormal conditions, the product being sold be- low actual cost. In these circumstances the inhabitants would suffer greatly if they had to pay an increased price for fertilizer, which it is found necessary to use even on virgin soil. The witness filed a telegram from the Hawaiian Fertilizer Co. (Ltd.) and the Pacific Guano & Fertilizer Co., protesting against duties on fertilizer materials as detrimental to agriculture. Such duties, it is added, are not needed to encourage production, as sup- plies exceed demand. Rates suggested. Free list. Hearings : Pages 4793-4794. Witness : Mr. T. C. Atkeson, representing the National Grange. (Brief.) The brief maintains that all forms of potash used chiefly as ferti- lizers should be admitted to the United States free of duty. The need of fertilizers has greatly increased in recent years, and large quantities of potash are required. Imports of this product have risen to 250,000 tons per year, 90 per cent going to farmers. The brief specifically objects to the provision in H. R. 7456 deferring the duty-free entrance of potash for five years ; it has been estimated that apart from the possibly reduced use of potash in itself a calamity the cost to farmers of this provision during that period would approximate $40,000^000. As regards the possibility ^f developing, through the duty, a do- mestic supply of potash adequate to the country's needs, the industry should be promoted in some other way than by taxing farmers $50,000,000 the excess cost over the foreign supply in order to make the potash industry a gift of $10,000,000. Whatever else is done, American agriculture should not be penalized. Rates suggested. Free list. Witnesses: Baugh & Sons Co., Philadelphia, Pa.; the Baugh & Sons Co., Baltimore, Md. ; the Baugh Chemical Co., Baltimore, Md. (Joint brief; no appearance at hearings.) Rates suggested. Free list. Remarks. Domestic potash production falls from 50 to 75 per cent short of filling domestic requirements. The proposed duty would place, for five years, an average annual burden of $7,600,000 on the consumer. The financial condition of the farmer is not strong enough to enable him to carry the additional burden, and he would conse quently buy less potash. DIGEST OF TARIFF HEARINGS, H. R. 7456. 581 PARAGRAPHS 1636 AND 1654. POTASSIUM AND SODIUM CYANIDES. WITNESSES, AND INTERESTS REPRESENTED. FAVORING HIGHER DUTIES : Mr. P. Samuel Rigney, representing the Roessler & Hasslacher Chemical Co., New York City. (See also under paragraph 1654.) Mr. Alfred W. Gray, representing the Chamber of Commerce of the City of Niagara Falls. FAVORING PROPOSED DUTIES: Hon. Thomas Sterling, United States Senator from South Dakota. The Homestake Mining Co., Lead, S. Dak. (Brief.) Mr. J. O. Hammitt, representing the American Cyanamid Co. Hon. Tasker L. Oddie, United States Senator from Nevada. The 64 pages covered by the testimony, briefs, and rebuttals of the foregoing witnesses are largely devoted to controversy between some of the parties. Thus, Mr. Rigney disclaims any German affiliation as regards the Roessler & Hasslacher Chemical Co"., and Senator Sterling describes the American Cyanimid Co., whose plant is in Canada, as being made up of Americans or officered by American citizens. The Roessler & Hasslacher Co. contends that it has no monopoly of the manufacture of cyanide in the United States, all patents having long since expired. On the other hand, the American Cyanamid Co. main- tains that the monopoly is perpetuated by the circumstance that the Roessler & Hasslacher Co. is and always has been the only manufac- turer of cyanide in this country. Stress is laid, by various testifying interests, upon the extended uses to which cyanide can be applied, these including new methods in electroplating, the heat treating of steel, the dye and color industry, horticulture, and the eradication of rats and other vermin. The testimony in behalf of the Chamber of Commerce of the City of Xiagara Falls points to the endeavor being made " to save that great electrochemical city from what you might say would be ruination by free trade in chemicals." The chemical industry of that city is stated to be absolutely dependent upon protection for its success. On the other hand, the brief of the American Cyanamid Co. asserts that the purpose of the proposed tariff on cyanide is to exclude that company from the American market and restore the former oppressive monopoly. Among other statements made, Senator Sterling figured that the duty of 33 per cent on sodium cyanide, proposed by Mr. Rigney, would increase the cost of production of gold by the cyanide process by about 1.6 cents per ton, or about $25,000 per year in the case of the Homestake Co. ; the amount of cyanide used per ton in refin- ing gold is two-tenths of a pound. The testimony includes many figures, tables, etc., bearing upon sources of supply, production costs and selling prices, volume of manufacture and other features. Some details of the testimony follow. Hearings : Pages 4794-4803, 4837-4852. Witness : Mr. Samuel Rigney, assistant treasurer, the Roessler & Hasslacher Chemical Co., New York City. Rates suggested. Thirty-three and one-third per cent ad valorem. 7713422 38 582 DIGEST OF TARIFF HEARINGS, H. R. 7456. Remarks. Further testimony is given regarding the business methods of the Roessler & Hasslacher company. It is stated that the company is importing cyanide and selling sodium cyanide at a cost of about 6 cents per pound below the cost of production in their Niagara Falls plant, this being done in order to retain customers until large- scale production may be resumed. This concern has imported within the last year about 5,000,000 pounds of cyanide. Hearings : Pages 4835^837. Witness : Mr. Alfred W. Gray, representing the Chamber of Com- merce of Niagara Falls, N. Y. Rates suggested. Thirty-three and one third per cent ad valorem. Remarks. Mr. Gray's testimony takes up the question of pro- tecting the electrochemical industries at Niagara Falls. It was stated that many of these would be forced to shut down if a duty were not levied on electrochemical products, because electric power costs only one-half as much on the Canadian side of the Falls as on the American side. In addition, the Canadian companies have a right to two-thirds of all available water power. Hearings : Pages 4803-4809 ; 4852-4856. Witness: Hon. Thomas Sterling, Senator from South Dakota. Costs and selling prices. The proposed duty of 33 per cent on sodium cyanide would increase the cost of production of gold by the cyanide process by about 1.6 cents per ton, or about $25,000 per year, in the case of the Homestake Mining Co., South Dakota. The amount of cyanide used per ton in refining gold is two-tenths of a pound. The price of cyanide was 14.5 cents per pound in 1913, reached a maximum of 30 cents per pound for large amounts in 1918,, and has since declined to less than 21-| cents per pound. Rates suggested. Free list. Remarks. The testimony as presented tended to show that the Roessler & Hasslacher Co. has a monopoly in the United States of the production of sodium cyanide and that a duty on this commod- ity would encourage such monopoly to the exclusion of cyanide made by the American Cyanamid Co. at Niagara Falls, Canada. The lat- ter company is an American concern and has now offered cyanamid at a price lower than the Roessler & Hasslacher Co., which it could not do were there a duty. Hearings : Pages 4817-4830. Witness: Mr. J. O. Hammitt, representing the American Cyan- amid Co., Niagara Falls, Canada. Rates suggested. Free list. Remarks. Witness's testimony takes up in detail the methods of business of the Roessler & Hasslacher Chemical Co., their German affiliations, and the history of its seizure by the Alien Property Cus- todian. It is stated that the sodium cyanide market of the world is controlled by this concern and the British Cassel Co., so that smaller amounts are sold at higher profits rather than larger amounts in open competition. At present the American Cyanamid Co. is very largely closed down. From 10 to 12 per cent of the crude cyan- amid produced by them is used in the manufacture of sodium cyanide. DIGEST OF TARIFF HEARINGS, H. R. 7456. 583 PARAGRAPH 1643. RICE. WITNESSES, AND INTERESTS BEPRESENTED. FAVORING HIGHER DUTIES : Mr. E. A. Eignus, representing the Pacific Rice Growers' Association of California and the American R ce Growers' Association of Louisiana, Texas, and Arkansas ; address, Sacramento, Calif. Hon. Edwin S. Broussard, United States Senator from Louisiana, and Hon. Samuel M. Shortridge, United States Senator from California. (Joint brief.) The American Rice Growers' Association. (Brief.) Hearings : Pages 4858-4864. Witness: Mr. E. A. Eignus (as above). Rates suggested. The free-list provision for rice used in the can- ning industry should be dropped, as it might open up the possibility of free importation of rice for many purposes. Canners can use domestic rice in their soups equally as well as foreign. Witnesses : The Hon. Edwin S. Broussard, United States Senator from Louisiana, and Hon. Samuel M. Shortridge, United States Sen- ator from California. (Joint brief of September 2, 1921 ; no appear- ance at hearings.) Rates suggested. The provision for the free importation of rice for canned foods should be dropped. Remarks. The proposed provision for free rice for canning con- cerns only the Campbell soup people. It will benefit them only to the extent of one-half cent per case of three dozen cans, an amount not sufficient to jeopardize the American rice industry. Such a provision would open the door to fraud in the importation of rice. It is conceded that the rice industry must be protected against cheap foreign labor or perish. As all rice is food, why should there be an exception in the case of canned foods ? NOTE. In a brief of September 14, 1921, Senator Broussard transmits a copy of an amendment to paragraph 728, introduced by Senator Shortridge, sug- gesting the following changes : On page 89, line 24, strike out the semicolon after the word " pound " and insert a period. Strike out the words " all the foregoing not specially pro-- vided for." On page 195, strike out paragraph 1643. Witness: The American Rice Growers' Association, including the Pacific Rice Growers' Association, on behalf of the rice farmers of the United States. (Brief; no appearance at hearings.) Comparability. Rice growers claim that the rices now grown in the United States are just as satisfactory as imported Patna ric'e. Rates suggested. "Rice used for canning purposes" (now free) should be dutiable at 2 cents per pound. Re77iarks. The association maintains that rices now grown in America are satisfactory for use in canned foods; if not, other rices can be grown to meet the needs of canned-food manufacturers. Per- mitting this grade of rice to come in free leaves a loophole through which considerable oriental rice can be brought into the United States. 584 DIGEST OF TARIFF HEARINGS, H. R. 7456. PARAGRAPH 1644. SAGO AND SAGO FLOUR. WITNESS, AND INTERESTS REPRESENTED. FAVORING HIGHER DUTIES : Mr. W. Parker Jones (statement and brief), representing the American Manufacturers' Association of Products from Corn. Hearings: Pages 1337-1340 of Schedule 1. Rates suggested. All starches to carry the same rate of duty, which should not be less than 1-| cents per pound. The following is suggested in place of paragraph 80 (Starches) : Starch, including all preparations from whatever substance produced fit for use as starch, including sago flour and tapioca flour, li cents per pound. To remove any possible doubt as to the intent, the words "sago flour " and " tapioca flour " should be eliminated from the two para- graphs in the free list. PARAGRAPH 1653. KID LEATHER. WITNESS, AND INTERESTS REPRESENTED. FAVORING PROPOSED DUTY AND RECLASSIFICATION : Mr. Laird H. Simons, representing kid-leather tanners of the United States. of industry. Prior to about 1889 the kid-leather trade in the United States was of insignificant proportions, the American market being dominated by French kid, selling at 50 cents to $1.50 per foot. The introduction of the American chrome tannage process in 1889, aided by the McKinley, Wilson, Dingley, and Payne- Aldrich Tariff Acts, had the effect of reducing the price of American-tanned kid to less than one- third of the former price of French kid. Comparability. The few months' operation of the Underwood tariff before the outbreak of the war demonstrated the ability of German and French tanners to compete in the American market against unprotected finished leather. Rates suggested. Free raw material is essential, as provided in paragraph 1653, but kid leather made from goat, kid, and kangaroo skins should be taken from the free list (par. 1600) and specially dealt with by including it with chamois and other leather in para- graph 1431 at 20 per cent ad valorem. Remarks. Attention is directed to the subtle effort to divert this business from American to British firms by means of the export and rebate terms of the Indian tariff, in effect September 11, 1919. PARAGRAPH 1654. CYANIDES. WITNESSES, AND INTERESTS REPRESENTED. FAVORING HIGHER DUTIES . Mr. P. Samuel Rigney, representing the Roessler & Hasslacher Chemica Co., New York City. FAVORING PROPOSED DUTIES: The Tom Reed Gold Mines Co., Oatman, Ariz. (Brief.) Hearings : Pages 4837-4857. Witness : Mr. P. Samuel Kigney. Costs and selling prices. The present price of carload lots is 21J to 23 cents per pound; smaller quantities bring a correspondingly DIGEST OF TARIFF HEARINGS, H. R. 7456. 585 high price. A table submitted shows, for 1914 and 1920, the volume and price of sales to one of the largest consumers of cyanide in the mining industry. Size of industry. Prior to 1914 the company produced approxi- mately 10,000,000 pounds annually and about 9,000,000 pounds were imported from Germany. Domestic plants increased during the war to an output of more than 17,000,000 pounds per annum, thus meeting all requirements of the United States. Comparability. Domestic cyanide is sold under a guarantee of 96 to 98 per cent sodium cyanide, while that from Canada has from 40 to 46 per cent and is sold at a lower rate. Rates suggested. All cyanide salts to be grouped under a separate paragraph at 33 per cent, or a specific duty of 6 cents per pound. Remarks. Would add tariff duty in the following way: Average domestic pre-war price, 21 cents ; German pre-war price, 14.3, a dif- ference of little less than 7 cents. It was pointed out that the prin- cipal raw materials for the manufacture of sodium cyanide are duti- able. For example, the duty on caustic soda, of which 1 pound is required to make a pound of sodium cyanide, is one-half cent per pound; anhydrous ammonia, of which one-half pound is required for 1 pound of sodium cyanide, is dutiable at 2| cents per pound. NOTE. The above supplements the witness's previous testimony on para- graphs 1636 and 1654. Witness: The Tom Reed Gold Mines Co. (Brief; no appearance at hearings.) Costs and selling prices. For two years this concern has been buying cyanide (41 per cent sodium cyanide) from the Canadian plant of the American Cyanamid Co., after having previously paid much higher prices for cyanides made in the United States. The' proposed duty would prevent the importation of these cyanides from Canada. As the price of gold is fixed at $20.67 per ounce, the gold- mining industry is now laboring under the handicap of increased costs of labor and raw materials, at no increase in selling price. Rates suggested. Free list. PARAGRAPH 1659. NEWSPRINT PAPER. WITNESS, AND INTERESTS REPRESENTED. FAVORING HIGHER DUTIES : Mr. W. E. Haskell, representing the newspaper print manufacturers of the United States and the International Paper Co., New York City. Mr William J. Pape, representing the Watertown Republican, Watertown, Conn and the Publishers' Buying Corporation, Washington, D. C. Mr. Emory Thomason, representing the American Newspaper Publishers' Mr. S. Edward Launer, representing the International Brotherhood of Pulp, Sulphite, and Paper Mill Workers, Fort Edward, N. Y. Mr. Timothy Healy, representing the International Brotherhood of Firemen. Hearings : Pages 4866^878. Witness: Mr. W. E. Haskell, representing the newspaper print manufacturers of the United States and the International Paper Co. Size of industry. The total amount of print papers consumed in the United States is 2,000,000 tons annually; of this amount about 586 DIGEST OF TARIFF HEARINGS, H. R. 7456. 680,000 tons are imported from Canada, and up to December, 1921, about 10,000 tons from abroad. Comparability. Newspaper print, on the free list since the pas- sage of the Underwood bill in 1913, is the only grade of paper which has been stripped of every vestige of protection. The industry has been forced to compete, defenseless, with the lower cost production of Canadian mills, which sell over 80 per cent of their product in American markets, enjoying the advantage of the exchange, amount- ing in itself to a profitable' bonus above the selling price. Owing to a depreciated currency and an unnatural and debased rate of ex- change, together with a wage scale only a fraction of that prevailing in the United States, the newsprint manufacturers of Finland, Nor- way, Sweden, and Germany are selling their paper in America, in increasing quantities, at prices much below the actual manufacturing cost in American mills. Germany, with the largest available ex- port production, possesses added advantages in direct and indirect Government subventions. The general policy of these countries seems to be to keep quotations on newsprint just below the selling price in the United States, Germany has recently quoted far below the cost of manufacturing in the most efficient American mills. Rates suggested. Newsprint manufacturers of the United States ask a provision that will protect them from competition both de- moralizing and ruinous to their industry. They ask for a duty that will equalize costs and selling prices. Remarks. Short-sighted legislation robbed the important Ameri- can newsprint industry of its possible expansion and handed it as a free gift, of enormous value, to a foreign country. The manufac- ture by America of the additional 680,000 tons of newsprint im- ported from Canadian mills in 1920 would have given employment to 28.700 workmen in the United States, distributed $20,000,000 in wages, aided the railroads by the freight receipts on nearly 2,700,000 tons of raw material, and contributed substantial taxes to the Gov- ernment. That was the size of the free gift to Canada at the ex- pense of this industry. From 1910 to 1920, the production of news- print in Canada increased from 161,000 tons to 883,000 tons, or over 540 per cent. Exports to the United States grew from about 25,000 tons in the year 1910 to 680,000 tons in 1920, an increase of over 2,700 per cent. Canada experienced this prosperous expansion of her newspaper print industry by grace of press-influenced American legislation. At the same time, the industry of the United States, which, with a minimum of congressional aid and consideration and a continuance of its statutory rights in Canadian reserve crownland pulp wood, could have developed capacity to meet the steadily grow- ing demand of home consumers, was forced to halt its progress. With the exception of one small mill built by a newspaper com- pany, only one integrated newsprint plant has been constructed in the United States since 1909. The witness contrasted the growth of the paper industry, paying duties, with the newsprint industry, which is on the free list. Hearings : Pages 4878-4895. Witness : Mr. William J. Pape, representing the Waterbury Re- publican, Waterbury, Conn., the Publishers' Buying Corporation, Washington, D. C., and other associations. DIGEST OF TARIFF HEARINGS, H. R. 7456. 587 Costs and selling prices. The average American price of news- print in 1913-1915, and even until the first part of 1915, was $36 to $38 per ton. The contract price now (December, 1921) being paid by the witness is $80 per ton. The price at the end of the war was $72 per ton. In the first quarter of 1920 it was $90; second quarter, $100; third quarter, $130 per ton. Country newspapers, very small users, have been unable to make contracts with the mills and have been obliged to buy through brokers and jobbers, paying as high as 22 cents per pound for individual lots. It is practically impossible to-day (December, 1921) to buy at less than 15 or 16 cents per pound. Comparability. A cablegram from Norway quotes the price of newsprint for the last six months of 1921 at 3f cents per pound, or about $5 per ton below the contract price for the next quarter; in December, 1921, the American price was $80 per ton. The witness interviewed Mr. Seaman, of the Seaman Paper Co., who stated that the large tonnage of newsprint dumped into this market from Scan- dinavia, Finland, and Germany did most assuredly play an im- portant part in the depression of the newsprint market. This for- eign paper did not seriously affect the book market, in which quick delivery is essential. Foreigners can not compete with American mills in the book market and never will be able to do so. A com- parative table, showing imports of European newsprint for 20 months beginning February 20, 1921, appears on page 4895. Rates suggested. The interests represented desire newsprint to be placed on the free list. " Free print paper saves the situation for us and saves our lives, and we want it continued." Remarks. A large proportion of the capital in Canadian news- print mills, built during the last ten years, is American. Canada, having the wood and the water, of course took advantage of the fact and tied up the wood that would otherwise have come to Ameri- can mills. There never was any need for overseas newsprint until the price became so high and Hundreds of small dailies, and some big ones, were threatened with ruin. Overseas newsprint began to come in in the fall of 1920, because of the alleged scarcity, the rap- idly rising price, and the threatened extinction of the newspaper business. It takes on an average 1^ to 1| cords of pulp wood to produce a ton of newsprint.- The average cost of the wood, laid down at the mills in the United States, is about $20 per cord, but prices vary greatly according to the sections from which it is de- rived. Hearings : Pages 4896-4900. Witness : Mr. Emory Thomason. representing the American News- paper Publishers' Association, Chicago, 111. Costs and selling prices. In 1920 paper on the so-called stock market reached the price of $280 and even $300 a ton without any corresponding increase in production costs, the price being a purely competitive paper price. Size of industry. The association represents about 550 news- papers, whose annual expenditures for newsprint are about $200,- 000,000, and who consume approximately 80 per cent of the news- print used in the United States. The American consumption of newsprint was 2,150,000 tons, of which American mills, operating 588 DIGEST OF TARIFF HEARINGS, H. R. 7456. at capacity, were able to supply only 1,511,000 tons. The depletion of raw materials in America has been such that it is now wholly impossible to manufacture here the newsprint for which American papers have created the demand; manufacturers have consequently had to look to Canada for the greater part of their pulp wood. The mills of the United States consumed, in 1917, 5,536,802 cords of spruce wood, of which nearly two-thirds was imported from Canada. Rates suggested. The interests represented ask that newsprint be retained on the free list on the purely economic ground that not enough newsprint can be manufactured in America to satisfy the demand. Remarks. The wording of paragraph 322 should be changed so that newsprint paper alone shall, as regards importations from Can- ada, be subject to the suspension of a tariff imposing a duty of $15 a ton on newsprint. Part of those newspapers which represent an increase in the consumption of newsprint are devoted wholly to ad- vertising, which has been one of the prime factors in the building of American industry as a whole. Regulations and restrictions on ex- portation have been imposed by Canadian provincial governments upon wood pulp derived from the Crown lands of Canada ; licenses to cut, owned by various American companies, specifically state that permission may in any year be restricted or wholly cut off. Such licenses must be renewed from year to year. If the Canadian pro- vincial governments, in endeavoring to have that pulp wood fabri- cated into pulp, if not into paper, in Canada, have adopted restric- tions upon the use of their own natural resources, the Underwood resolution, in its turn, has been adopted in both Houses of Congress, empowering the President to make a reciprocal restriction if he chooses to do so. The witness, as representing the association, urges the elimination of that restricting clause from the House bill free list. He also urges, in connection with the words " standard news- print paper," forming part of the present House bill, and in order that all newsprint paper may be unquestionably included and that there may be no difference of definition involved hereafter, that the words " rotogravure paper and half-tone papers " be included. This is required because rotogravure and half-tone papers are used very largely in all American newspapers, in the same manner as newsprint paper, being paper only slightly polished and weighing from 2 to 3 pounds per 500 sheets more. Then, again, spruce and fir logs, para- graph 402, when used in, or imported for, the manufacture of news- print, should be included in the free list. Hearings : Pages 4900-4904. Witness: Mr. S. Edward Launer, representing the International Brotherhood of Pulp, Sulphite, and Paper Mill \Vorkers, Fort Ed- ward, N. Y. Costs and selling prices. The price of the wood that goes into paper has increased 100 per cent, or from $10 to $15 a ton. Comparability. The witness called attention to statements that America will be confronted with paper from Germany at $50 a ton ; to the low cost of labor in foreign countries, especially in Germany and Scandinavia ; to the advance of exchange in their favor, and to the effects these will have upon American laborers, and their stand- ards of living, in. the newsprint industry. He stated that members DIGEST OF TARIFF HEARINGS, H. R. 7456. 589 of the brotherhood are entirely in accord with manufacturers in their request for adequate protection to American workers in that industry. Rates suggested. A tariff on Canadian print paper is not desired, but that would be preferred to the entry of large amounts of foreign paper from German and Scandinavian countries. Remarks. In May. 1921, the workers in American paper mills worked on an 8-hour schedule and wages were such as to conform to the good American standard of living. Since that time large re- ductions, averaging from 10 to 25 per cent, have been put in effect and at the present time workers in the industry are confronted with further reductions. The first reductions were based largely on the cost of living, but although there has been no reduction in the cost of living since that time, the fact that newsprint paper for 1922 is on the market at $70 a ton indicates that further reductions must be looked for if they are to continue the operation of the mills. A mini- mum of 40 cents an hour is now (December, 1921) the wage rate in the organized mills. It was 52 cents an hour previous to the reduc- tion. Many American paper mills are located in isolated sections, where living costs are higher ; in many cases workers have lived there for years, working only in the mills, and have no other business or trade of any kind. If the operation of these mills is curtailed by the introduction of foreign paper, these people will have to" work for a lower and inadequate wage. Hearings : Pages 4904-4907. Witness: Mr. Timothy Healy, representing the Internationa] Brotherhood of Firemen. Remarks. The witness represents the steam-plant men in prob- ably 45 or 50 mills in the United States. The organization is strongly opposed to the importation of foreign paper to this country and in favor of the American workman. If it were a question whether a tariff against European paper should apply also to Canada, the or- ganization would favor that, if necessary. The witness expects wages in the American paper industry to go down to 30 cents an hour in January, 1922. This is below a living wage unless prices are also reduced. As long as paper is selling at $70 a ton there should be no reduction in wages. Hearings : Pages 4907-^911. Witness: Mr. J. Raymond Hoover, representing the Publishers' Buying Corporation. (Brief.) The brief is framed as a reply to denials of wrongdoing by the newsprint industry in 1920 and 1921. It deprecates the reliance upon "mere statistics."' on which these denials are based, and cites utter- ances of Mr. Dodge, in which it is admitted that " the demand for paper far outruns the possible production in this country." 'The dependence upon and subservience to paper manufacturers on the part of publishers are noted the smaller ones being driven from the business by threatened bankruptcy. . The argument of the brief is to the effect that a 5 per cent im- portation is not capable of forcing American manufacturers to sell their product at an actual loss, and that no need for a tariff on news- print has been shown to exist. 590 DIGEST OF TARIFF HEARINGS, H. R. 74-56. PARAGRAPH 1663. PYRITES. WITNESS, AND INTERESTS REPRESENTED. FAVOBING HIGHER DUTIES : Mr. A. J. Woodruff, representing the Western Pyrites Corporation, the ^ Ohio Sulphur Co., the Franklin Pyrites Corporation, and other inde- pendent producers of pyrites; address, Garrisonville, Va. FAVORING PROPOSED DUTIES : Mr. John I. Tierney, representing the National Fertilizer Association. Mr. C. Wilbur Miller, representing Davidson Chemical Co., Baltimore, Md. Hearings : Pages 4911-4913. Witness: Mr. A. J. Woodruff (as above). Costs and selling prices. Spain can load its pyrites at the mines, haul it by rail to the seacoast, 125 miles, ship it across the Atlantic Ocean, unload it in the port of New York, and sell its sulphur content for one-half of the freight rate on ore from mines 37 miles south of Washington to Xew York City. In the Texas and Louisiana fields sulphur is taken from the earth by superheated steam which liquefies the sulphur, so that with every ton of sulphur taken out of the earth there is that much larger cavity to heat. This is shown by a jump in cost from $5.73 per ton in 1917 to $10.89 in 1921. Size of industry. On the Atlantic coast there is something over $12,000,000 invested in properties producing pyrites, every one of which is closed to-day. The supply of pyrites is* unlimited. " Prewar imports amounted to 1,000,000 tons^per year, and the largest importa- tion during the war was 500,000 tons. Domestic production prior to the war amounted to about 500,000 tons per year. Rates suggested. A duty of $4 per ton on'cuprous, cupriferous, or iron pyrites, now on the free list. Remarks. Pyrites is used only in the manufacture of sulphuric acid. Prior to the war, probably 90 per cent of the sulphuric acid was so produced. To-day 70 per cent of the sulphuric acid is produced by the burning of brimstone from the Texas and Louisiana fields. Therefore the price of sulphuric acid to-day is set absolutely by the sulphur producers and not by the pyrites producers. Fifty-two per cent of the sulphuric acid manufactured in the United States goes into commercial fertilizers. As the sulphur of the South to-day sets the price of sulphuric acid, a tariff duty on pyrites would not increase the cost of fertilizer. The importation of Spanish pyrites does not at present affect the price of sulphuric acid in the least, but even small shipments do set the price with which domestic producers of pyrites are forced to compete. Hearings : Pages 4913-4915. Witness : Mr. John I. Tierney, representing the National Fertilizer Association. Rates suggested. Free list. Remarks. The domestic pyrites industry virtually does not exist except where freight rates are favorable, because of the low price of American sulphur. The greater portion of both of these com- modities is used in the manufacture of sulphuric acid. Prior to the war about 1.000,000 tons of foreign pyrites were imported annually, DIGEST OF TARIFF HEARINGS, H. R. 7456. 591 but recently the price of sulphur has declined, so that foreign pyrites can no longer compete except at Atlantic ports and similar favored points. The tariff on pyrites would actually be prohibitive. Domestic sulphur would be used exclusively in the manufacture of sulphuric acid, while sulphur producers would be tempted to raise their prices in accordance with the duty on pyrites. Hearings : Pages 4915-4916. Witness: Mr. C. Wilbur Miller, representing the Davidson Chemi- cal Co., Baltimore, Md. Rates suggested. Free list. Remarks. The concern represented has an investment of $3,500,000 in Cuban pyrites property. A duty on pyrites would have the effect of shutting out this import business, which is conducted by Ameri- cans with American capital. PARAGRAPH 1663. REFINED SULPHUR. WITNESS, AND INTEREST REPRESENTED. FAVORING HIGHER DUTIES : Mr. George F. Thompson, representing the Niagara Sprayer Co., Middle- port, N. Y. Hearings: Pages 4916-4917. Size of industry. There are sulphur refineries at Williamsburg, Brooklyn, South Brooklyn, Staten Island, Bayonne, N. J., one at San Francisco, and another in Arkansas, besides the witness's plant. The industry employs many skilled workers at American wages. Rates suggested. A duty of $2 per ton, based upon the difference in wages here and in Sicily. Remarks. The witness took occasion to object to a duty on arsenic. His company uses this product as an insecticide and fungi- cide and thinks it bad policy to put a tax on an article whose total world production is only 20,000 tons. PARAGRAPH 1666. TAPIOCA. WITNESSES. FAVORING HIGHER DUTIES : Manufacturers and dealers interested in tapioca dextrines, etc. (Brief.) The Perkins Glue Co., Lansdale, Pa. (Brief.) FAVORING PROPOSED DUTIES : Guggenheim. Strasser & Meyer. (Brief.) Witnesses: Manufacturers and dealers interested in tapioca dex- trines, adhesives, glues, and textile finishings. (Brief; no appear- ance at hearings.) Size of industry. About 100,000,000 pounds are imported an- nually, one-half of which is used for foodstuffs and the balance for industrial purposes. 592 DIGEST OF TARIFF HEARINGS, H. R. 7456. Comparability. It is contended that tapioca is a noncompetitive product, none being grown in this country. Its nearest substitutes are corn and potato starch. Rates suggested. Tapioca to remain on the free list. Remarks. The brief quotes from the Tariff Commission's survey on Starch and related materials and contends that tapioca does not compete with corn or potato starches, being used for certain special purposes to which the others are not adaptable. Witness: The Perkins Glue Co., Lansdale, Pa. (Brief; no ap- pearance at hearings.) Size of industry. The Perkins Glue Co. has a capital of $1,500,000 and employs 100 people. Comparability. It is contended that tapioca is a noncompetitive product. Rates suggested. Free list. Remarks. The business depends and was built up on the basis of free tapioca, the preferred raw material used in the manufacture of the company's glue. Imported tapioca flour does not compete with domestic tapioca nor with any other domestic vegetable product, such as corn or potato starch, for the specific purpose for which the com- pany sells it. The revenue derivable from a duty on tapioca flour would be insignificant. Hearings : Pages 4917-4921. Witness : Guggenheim, Strasser & Meyer, New York City. In a brief filed by Mr. Arthur L. Strasser it is argued that tapioca is a food; that it's production and importation do no affect the farmer, even as regards cornstarch and potatoes, and that it has been admitted free of duty since 1883. Out of a total average im- portation of 73,000,000 pounds 46 per cent was used for food purposes. As regards the competition of tapioca with flour, it is shown that tapioca amounts to only twenty-three ten-thousandths of 1 per cent of the United States corn crop. Analogous statements are made in regard to cornstarch and potatoes. Rates suggested. The brief represents the imposition of a duty as a reversal of the policy of leaving food supplies untaxed and re- quests that tapioca be retained on the free list. A duty would result in confusion and demoralization in many industries. PARAGRAPH 1668. TEA. ) WITNESS, AND INTEREST REPRESENTED. FAVORING MODIFICATION. Mr. W. G. W. Melville, representing Ridgways (Inc.), New York City. (Brief.) Hearings : Page 4917. The brief aims at a clearing up of doubtful interpretations in rei- gard to the taxation of the original tea chests in which tea is shipped from the country of production. To obviate the possibility of tea, packed in small packages abroad, coming in free of duty, a modifica- tion of the wording of the paragraph is submitted, applying only to packages containing less than 5 pounds net weight of tea. DIGEST OF TARIFF HEARINGS, H. R. 7456. 593 PARAGRAPHS 1670 AND 386. PIG TIN. WITNESS, AND INTEREST REPRESENTED-. FAVORING HIGHER DUTIES : Mr. William Loeb, jr., representing the American Smelting & Refining Co. Hearings : Pages 4921-4926. Costs and selling prices. All the tin that is smelted and refined in the United States is produced from Bolivian ores Bolivian con- centrates. Fluctuations in tin prices are both violent and wide. Changes in price, ranging from 5 to 30 cents per pound in the course of a year, constantly occur. This is due to the activity of specula- tive interests in England and the Far East. In 1914 the highest price was 65 cents, the lowest 28.5 cents, and the average 35.7 cents per pound. In 1919 the highest price was 72.5 cents, the lowest 52.75 cents, and the average 65.54 cents. In 1920 the highest price "was 64.75 cents, the lowest 32.5 cents, and the average 50 cents. Size of industry. The tin smelting and refining industry in this country draws its supplies almost exclusively from South America, which is the only important producer of tin outside of the sphere of British influence, besides the cutch metal derived from the Dutch East Indies. Owing to the vagaries of tin prices, tin smelting in the United States is not a profitable enterprise. The first tin smelting and re- fining plant to be established in this country has involved an invest- ment cost of over $700,000. It has been operated since March, 1916, and has produced a total of 72,294,000 pounds of refined tin. The result to date has been an operating loss of more than $1,000,000. The United States consumption of pig tin amounts to 52,000 tons of imported metal, principally Malay or English tin. and 12.000 tons of pig tin produced from ores imported into the United States, making a total of 64,000 tons. Comparability. The tin-smelting industry of Cornwall is cen- turies old, and the direct labor cost is much less than in the United States. The industry in the Straits Settlements and in the Dutch East Indies is served wholly by coolie labor or its equivalent. The one advantage enjoyed by the United States smelters and refiners in the treatment of Bolivian ores rests on cheaper freights from mine to smelter ; but this advantage is wholly insufficient to overcome the cheaper treatment costs of the foreign plants. Xo workable deposits of tin ore from which metallic tin could be commercially produced have yet been discovered or developed in the United States. The largest amount of tin ever produced from domestic ores in a single year was 140 tons, in 1916. The necessary raw material for the domestic refined tin production has thus far been obtained almost exclusively from Bolivia in the form of tin concentrates, of which approximately 20,000 tons have been imported into this country annually. The two largest refineries in the world are located in the Straits Settlements. They refine about 60 per cent of the aggregate pro- duction of pig tin. Rates suggested. As a measure of protection to -the domestic in- dustry a duty on tin only as metal is required, i. e., tin in bars, blocks, pigs, or grain, or granulated, or any other metallic form. A duty 594 DIGEST OF TARIFF HEARINGS, H. R. 7456. of 3 or 4 cents per pound would probably suffice. No duty is needed on tin ores, as there are probably no tin mines in the United States, and imported ores are needed as raw material for the domestic pro- duction. The suggested duty would enable American tin producers (1) to compete on equal terms for tin ores in Bolivia, (2) to encour- age a larger Bolivian mine output, with a view to an increased pro- duction of domestic refined tin, (3) to enter the Chinese field as a purchaser of tin ores, and (4) would insure permanence to the indus- try and promote its growth. Tin represents but a small part of the value of the several finished products employing tin in their manu- facture. PARAGRAPH 1670. TIN ORE. WITNESSES. REQUESTING OMISSION : The N. & G. Taylor Co., manufacturers of tin plate, Philadelphia, Pa. (Brief.) The Association of Tin Plate Manufacturers, Pittsburgh, Pa. (Brief.) Witness: The N. & G. Taylor Co. (Brief: no appearance at hear- ings.) Rates suggested. Removal of the proviso in paragraph 1670 of H. R. 7456, which provides for a duty on imports of different forms of tin after domestic production reaches a certain quantity annually. It is characterized as absurd to place a duty on a raw material not produced in the United States in any reasonable quantity a condi- tion responsible for the company having to import all its pig tin for making tin plate. Witness: The Association of Tin Plate Manufacturers, Pitts- burgh, Pa. (Brief; no appearance at hearings.) Protest is entered against the provision under which the proposed duty of 4 cents per pound is to be increased to 6 cents when it is shown that the mines of the United States are producing 1,500 tons of cassiterite and bar, block, and pig tin per year. The manufac- turers of tin plate are described as being unanimous in the opinion that it is ridiculous to make a heavy duty, 6 cents per pound, con- tingent only upon the production of 1,500 tons per year, when the consumption of tin in this country is approximately 100,000 tons per year. PARAGRAPH 1672. TURPENTINE AND ROSIN. WITNESS, AND INTEREST REPRESENTED. FAVORING HIGHER DUTIES: Mr. Carl F. Speh, representing the Turpentine and Rosin Producers' Asso- ciation, New Orleans, La. Hearings : Pages^4927-4931. Costs and selling prices. The average market quotation on rosin is about $4 for 280 pounds, or little more than $6 per barrel. Size of industry. The production of 1909-1914 averaged 520.000 barrels of spirits of turpentine and about 1,750,000 barrels (500 pounds gross weight) of rosin. Produced 85 per cent of the world's output before the war. DIGEST OF TARIFF HEARINGS, H. R. 7456. 595 Rates suggested. Twenty-five per cent ad valorem on turpentine and rosin. Remarks. Each barrel of 50 gallons of gum turpentine produces 3 barrels of rosin, or 500 pounds. PARAGRAPH 1677. PHONOGRAPH MASTER RECORDS. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED DUTIES : Mr. Marion Sorian, representing the Columbia -Graphophone Manufacturing Co., Bridgeport, Conn. (Brief.) Hearings : Pages 4932^933. Rates suggested. Retention on the free list, as provided for in paragraph 1677, of disks of soft wax, commonly known as master records, or metal matrices obtained therefrom, to be used in the manufacture of sound records for export purposes. The Treasury Department has ruled that these articles have been manufactured in a foreign country and that they are dutiable as manufactures of wax. (Paragraph 267, act of 1913.) Remarks. Neither the wax master record nor the metal matrix can be used in a commercial way or to produce sound records in commer- cial quantities. They are merely preliminary steps. PARAGRAPH 1678. PERSONAL EFFECTS. FAVORING REDUCTION OF EXEMPTION : The National Association of Merchant Tailors. Hearings : Page 4934. The brief is a protest against the proposal in H. R. 7456 to increase the exemption of residents of the United States from $100 in value, as at present, to $250 in valuation of articles acquired abroad for personal or household use or as souvenirs or curios. The proposal is denounced as class legislation in favor of people who can afford to travel to Europe. It is estimated that each of the 222,712 American citizens entering United States ports during the fiscal year ending June 30, 1921, took advantage of the existing pro- vision and it is asked : Why increase the $22,271,200 value, thus im- ported, by an additional exemption of $150? PARAGRAPH 1683. LUMBER. WITNESSES, AND INTERESTS REPRESENTED. FAVORING HIGHER DUTIES : Mr. Robert B. Allen, representing the West Coast Lumbermen's Association, Seattle, Wash. The R. T. Jones Lumber Co., North Tonawanda, N. Y. (Brief.) FAVORING PROPOSED DUTIES : Mr. E. Bruce Hill, representing the National Retail Lumber Dealers' Asso- ciation. Mr. Donald D. Conn, representing the Shevlin. Carpenter & Clarke Co., Minneapolis, Minn., and the Western Pine Manufacturers' Association, Portland. Oreg. 596 DIGEST OF TARIFF HEARINGS, H. R. 7456. FAVORING PROPOSED DUTIES Continued. Mr. Harrison Hatton, representing the Northwestern Lumbermen's Asso- ciation, Minneapolis, Minn. Mr. Fred. J. Bruce, representing the New York Lumber Trade Association. The Western Pine Manufacturers' Association. (Brief.) Brady Bros., Tonawanda, N. Y. (Brief.) Hearings : Pages 4935-4946. Witness : Mr. Robert B. Allen, representing the West Coast Lum- bermen's Association, Seattle Wash. Size of industry. The industry in Oregon and Washington nor- mally employs 105,000 men, and is now operating with about 38 per cent unemployed. If freight rates are reduced in the spring (1922) the industry will move along and furnish ample lumber for the de- mands of the American trade. The freight rate from Oregon to New York, in December, 1921, was 90 cents per 1.000 shingles, but the water rate was lower. There is no danger of the depletion of timber resources if Congress will enact a practical national- forest policy law. With reforestation the country can have a permanent supply of lumber. Comparability. According to official figures, Canada has 898,000,000,000 feet of timber, while the United States has 2,214.000,000,000 feet. Canadian production since 1913 has increased 275 per cent, 80 per cent of the production being sold in the United States. Since the passage of the act of 1913, 200 shingle mills have gone out of business in the States of Oregon and Washington. Rates suggested. The interests represented are in favor of para- graph 1683 just as it stands. As the primary reason for asking that this reciprocal arrangement be placed in the hands of the Presi- dent, they do not understand why an American citizen who has in- vested his capital abroad should be entitled to preferential treatment as against the American citizen who has invested his capital at home and who finances American pay rolls. In the fiscal year of 1913, which was prior to the effective date of the 1913 tariff act, the Cana- dians shipped under duty as much as they now ship free, and at much lower prices. In 1913, under the act of 1909, carrying a duty of $1.25, the Canadians shipped over 1,021,810,000 feet of lumber of an average value of .$17.59. In the fiscal year 1921, under absolute free trade, they shipped over 919,927.000 feet, at an average price of ; $42.47. The industry wants a bargaining tariff. The Canadian Northwest is coming back and absolute freedom of competition is desired. Remarks. The industry is handicapped by the freight-rate situa tion in finding markets for the common lumber. A tree is 75 per cent common lumber a low-value commodity which can not stand high transportation charges. Just now there is great difficulty in moving common lumber, which means selling at the highest possible price what can be sold, in order to meet the pay rolls, and wasting the balance. Witness : The R. T. Jones Lumber Co., North Tonawanda. N Y. (Brief: no appearance at hearings.) Remarks. Referring to prevalent discussion on the lumber tariff, the brief notes the absence of presentation from the AmericaB viewpoint free rough lumber and a specific duty on dressed lum-f DIGEST OF TARIFF HEARINGS, H. R. 7456. 597 her, aiming at revenue, the protection of the planning mill in- dustry, and the welfare of the American workman. It is natural that those having interests in Canada should be in favor of free lumber of all kinds, but the American viewpoint is insisted upon. It is urged that the removal of the duty on Canadian lumber some few years ago did not reduce the cost to the consumer while in- creasing the net returns to the Canadian manufacturer, although a very different result was heralded by the then advocates of free lumber. Hundreds of thousands of men are employed in the planing mill industry of the Northern States, and a majority of these mills are idle or partially idle at this time. Along with this condition, many planing mills have sprung up within the last 10 years, just across the Canadian border, dressing not only Canadian lumber but American yellow pine. Hearings: Pages 4946-4949. Witness: Mr. E. Bruce Hill, representing the National Retail Lumber Dealers' Association. Costs and selling prices. The price of lumber in Pittsburgh to- day (December, 1921) is about $12 a thousand feet higher than in 19i2. Lumber that then sold for $30 is selling to-day at $42, about half of that increase being due to the advance in freight rates. During 1920 white oak flooring was about $200 a thousand and is now about $100. It was somewhere around $40 in 1912. Rates suggested. The interests represented object to a duty of 50 cents per thousand on shingles, and to the reciprocity features, which seem to be retaliation. They want free shingles and lumber. Retailers and consumers are both against any tariff. If Canada should take her tariff off lumber, the American manufacturer would have a wider market for his lumber, which would undoubtedly mean higher prices in this country. If this country should put on a 25 per cent tariff, which the Canadians have now," that would mean $7 a thousand on lumber on which the price can be raised. Hearings : Pages 4949-5009. Witness: Mr. Donald D. Conn, representing the Shevlin, Carpen- ter & Clarke Co., Minneapolis. Minn., and the Western Pine Manu- facturers' Association. Portland, Oreg. Costs and selling prices. Tables showing the present difference in mill prices of lumber, and the difference, if the proposed tariff is adopted, as affecting American users will be found on page 4965. Rates suggested. A partial list of organizations and firms which have expressed unqualified opposition to any tariff upon lumber, rough or dressed, whether applied as a rigid duty or as a retaliatory measure against Canada, will be found on page 4972. A tariff would upset market conditions. To restrict importation is indirectly to affect the interests of American industries exporting manufactured products to Canada. The elimination of the retaliatory clause under paragraph 1683, and of the 50-cent tariff on shingles, paragraph 408, Js requested. Free logs, paragraph 403, and free ties, paragraph 405, are also desired. Remarks. In 1920. the wage paid to common labor in the United States lumber industry was $3.88 per day; in Canada, $4.82 per day. 7713422 39 598 DIGEST OF TARIFF HEARINGS, H. R. 7456. The respective wages paid to common labor at the beginning of 1921 were $2.86 and $3.37. See table of wakes per hour on page 4994. The labor rate varies in different sections. For statement of ranges of values for pine stumpage in Ontario and Minnesota, see page 4955. Tables are given on pages 4956-4957 setting forts costs of various kinds of lumber per 1,000 feet, and comparisons of averages per 1,000 feet for the months of March to August, 1921, inclusive. " The United States is cutting its timber four times as fast as it is grow- ing it; timber is being cut and destroyed 5.6 times faster than the growth. Other facts about the disappearing forests of the United States are cited and stress is laid on the fact that a tariff on lumber can not be reconciled with the United States conservation program. Any tariff duties imposed will increase domestic mill prices and bring about an unwarranted advance in lumber prices to consumers. Shingles, listed in paragraph 408 of H. R. 7456 for a tariff of 50 cents per 1,000, should be placed on the free list. A statement of wages being paid on October 4, 1921, by 28 logging operations in British Columbia (p. 4994) ) shows that this wage scale approximates or exceeds the general scale of wages in the United States. NOTE. A large part of Mr. Conn's testimony and submitted documents is controversial in character, dealing with statements made in behalf of other interests. Hearings: Pages 5009-5010. Witness: Mr. Harrison Hatton, representing the Northwestern Lumbermen's Association, Minneapolis, Minn. Costs and selling prices. In the face of freight advances of from $2 to $5 per thousand, retail prices were brought down during the last year all the way from $10 to $25 per 1,000 feet on various grades of lumber. The members of the association have reduced overhead charges on the handling of lumber more than 50 per cent. Size of industry. The organization comprises 2,800 retail lumber yards. Its members are carrying on their books the accounts of more than 65,000 farmers for a total of more than $85,000,000. Rates suggested. A brief submitted sets forth that the organi- zation is opposed to any tariff of any description. The position of the membership is that the trend of prices to the consumer is down- ward, and that anything which even indirectly obstructs this reces- sion in prices is against sound public policy. Any tariff on lumber and shingles will tend to increase costs to the ultimate consumer. The yards of members are now absorbing more than 4,000 cars of Canadian lumber annually, and for this reason they are directly con- cerned in this tariff issue. Hearings : Page 5011. Witness: Mr. Fred J. Bruce, representing therNew York Lumber Trade Association, New York City. Rates suggested. At a general meeting of the association on April 20, 1921, resolutions were passed expressing strong disapproval; of H. R. 7456. It was urged that the proposed tariff is directed against Canada, the association's best per capita customer, buying almost $2 worth of American goods as against $1 worth of her's sold here. The falling off in European and foreign trade renders DIGEST OF TAEIFF HEARINGS, H. R. 7456. 599 it inadvisable to jeopardize the Canadian market. No protection is needed by the American lumber industry; the revenue from a tariff would be inconsiderable, and the danger of retaliation would arise. Witness: The Western Pine Manufacturers' Association. (Brief; no separate appearance at hearings, but Mr. Donald D. Conn (pp. 4949-5009) represented the association and another interest.) The association would have been represented before the Ways and Means Committee, but it was inconceivable that the committee would indorse any tariff on lumber. The association inclosed with its brief communications from the following: Mr. E. Bruce Hill, director of the National Retail Lumber Dealers' Asso- ciation. Mr. Nelson Morgan, Washington representative of the Western Pine Man- ufacturers' Association. Representative Andrew J. Hickey, Washington, D. C. Representative Fish, of New York. Also, copy of a resolution unanimously adopted by the American Farm Bureau Federation, Washington, D. C., April 22, 1921. These statements exhibit a general agreement in regard to the necessity of conserving domestic lumber resources and to the calam- itous effect on the building industry which the imposition of an im- port duty would produce. Representative Fish states that the pro- posed duty of 25 per cent ad valorem on finished lumber would mean an increase of approximately $250 to the cost of every $5,000 house, and an annual increase in building cost of at least $200,000,000. Mr. Nelson Morgan points to "the dire need of a million and a quarter new houses in this country," and it is stated elsewhere that all retailers of lumber and building materials throughout the United States ask that all lumber remain on the free list. The brief itself affirms that the proposed duty will in many cases wipe out the benefits of State legislation fixing low rates of interest on building loans and exempting new building from taxation. Witness: Brady Bros., wholesale pine lumber, Tonawanda, N. Y. (Brief: no appearance at hearings.) Remarks. The brief is particularly directed against any duty on Canadian white pine, and charges that "sinister and active elements, for their own selfish interests, are now * * * attempting to put an import duty on lumber." The brief characterizes such a duty as detrimental to the best interests of the public ; economically unsound ; jeopardizing present good trade relations with this .country's best customer Canada and liable to evoke retaliation. It can not be regarded as essential in a protective sense, will be negligible as a revenue producer, and saddle an additional burden on the consum- ing public. Cited figures show that Canada buys from the United States sub- stantially $2 worth of commodities for every $1 worth sold, these figures including even all the lumber and all the wheat imported from there. The seriousness to Canada arising from the erection of a tariff wall against her, and the impetus to retaliation thereby produced, are dwelt upon. 600 DIGEST OF TARIFF HEARINGS, H. R. 7456. As regards the effect upon the ultimate (American) consumer, it is regarded as a natural sequence to a duty on Canadian lumber that the American manufacturer will advance his price by approxi mately the amount of the duty. On a basis of 40,000,000,000 feet of lumber manufactured in this country annually, it is estimated that the bill to the American consumer would be increased by $80.000,000. The brief contains several tables showing, in particular, the itemized values of Canada's total imports and .the very large pro- portion of these going from the United States. PARAGRAPH 1685. DESIGNS AND SKETCHES USED IN THE INDUSTRIAL ARTS. FAVORING HIGHER DUTIES: The Association of Wallpaper Designers of America and Textile Designers. (Brief; no appearance at hearings.) Costs and selling prices. Certain designs can be created in Ger- many at an equivalent cost of $6, which could not be produced in the United States under $40. Rates suggested. A duty of 100 per cent ad valorem is asked for. Remarks. Industrial designs and sketches have been protected by the tariff, but recently the law has been interpreted in such a wav as to remove all protection. (T. D. 38368, G. A. 8331.) It is stated that several important Xew York designers have given up their studios and have begun to import foreign designs. Some are opening studios in foreign countries. PARAGRAPHS 1685 AND 1687. WORKS OF ART. WITNESS, AND INTEREST REPRESENTED. FAVORING PROPOSED DUTIES : Mr. John Quinn, representing the American Federation of Fine Arts. REQUESTING RECLASSIFICATION : The Netherlands Chamber of Commerce in New York. (Brief.) Hearings : Pages 5011-5028. Witness : Mr. John Quinn, representing the American Federation of Fine Arts. Rates suggested. The federation is opposed to the imposition of any import duty upon original works of art of any kind, whether modern or over 100 years old. The witness suggested that the wording of paragraph 1685, " origi- nal drawings in pen and ink or pencil and water colors, " be changed to " original drawings in pen, ink, or pencil, or water colors." Also that the wording in the same paragraph should be changed to admit, free, etchings and engravings 20 years old, as " artists' proof etch- ings " are construed to mean artists' proofs signed by the artist. Remarks. In the course of his testimony, the witness submitted, as a brief, a statement by Mr. Robert de Forest, president of the Ameri- DIGEST OF TARIFF HEARINGS, H. R. 7456. 601 can Federation of Arts, originally appearing in the American Maga- zine of Art, September, 1921. This appears on pages 5015-5018. Witness: The Netherlands Chamber of Commerce in New York. (Brief; no appearance at hearings.) Remarks. Attention is called to paragraph 1685, providing for original drawings and sketches in pen and ink or pencil and water colors. This has been interpreted to mean that these articles, unless a little touch of water color is added to them, can not be imported into this country free of duty. It is claimed that the following word- ing would overcome this difficulty : " Original drawings and sketches in pen and ink or pencil or water colors." The provision in paragraph 1687 with respect to collections in illustration of the progress of the arts, etc., imported in good faith for exhibition at a fixed place, makes it impossible to exhibit the col- lection at different places without the placing of a new bond for each place. The same privilege is asked for collections of this sort as is granted to those enumerated in paragraph 1686. PARAGRAPH 1688. WORKS OF ART IMPORTED EXPRESSLY FOR PRE- SENTATION TO AN INCORPORATED RELIGIOUS SOCIETY. WITNESS. REQUESTING RECLASSIFICATION : Cardinal Dougherty, archbishop, Philadelphia, Pa. (Brief; no appearance at hearings.) Rates suggested. The following changes are desired in paragraph 1688: Insert the words " or established " after the word " incorporated." Include within the term " other works of art " (a) church windows and (&) church altars. To accomplish this, insert after " pictorial paintings on glass " the words " stained or painted glass windows and parts thereof, and architectural works of art." Paragraph 1688, if revised in accordance with the suggested changes, would read as follows: Works of art, productions, of American artists residing temporarily abroad, or other works of art, including pictorial paintings on glass, stained or painted glass windows and parts thereof, and architectural works of art, imported expressly for presentation to a national institut'on or to any State or municipal corporation or incorporated or established religious society, college, or other public institution, and excluding any article, in whole or in part, molded, cast, or mechanically wrought from metal within twenty years prior to importation ; but such exemption shall be subject to such regulations as the Secretary of the Treasury may prescribe. Remarks. It is claimed that the bill as it now reads will not allow the free entry, in all cases, of works of art imported for presentation to Catholic churches, for the reason that the Catholic Church is not incorporated in many of the States. The constitutions of some of the States even forbid the incorporation of any religious society. NOTE. Paragraph 655 of the act of 1913 was heldcto extend the privilege of free entry to houses of worship, whether or not incorporated. H. R. 7456, paragraph 1688, as referred to the Committee on Finance, contains the following : " including stained or painted glass windows imported by houses of worship," which, however, was not in H. R. 7456, paragraph 1687, as intro- duced into the House. 602 DIGEST OF TARIFF HEARINGS, H. R. 7456. PARAGRAPH 1688. STAINED-GLASS WINDOWS. WITNESSES, AND INTERESTS REPRESENTED. FAVORING HIGHER DUTIES : Mr. Walter West, representing the Decorative Glassworkers' Association. Mr. Edward F. McGrady, legislative agent of the American Federation of Labor. Mr. Otto Heinigke, representing National Ornamental Glass Manufacturers'" Association. The American Art Glass Co. of Columbus, Columbus, Ohio. (Brief.) The Ornamental Glass Manufacturers' Association of Philadelphia. (Brief.) FAVORING PROPOSED DUTIES : Mr. James H. Ryan, representing the National Catholic Welfare Council. (Brief.) Hearings : Pages 5028-5031. Witness: Mr. Walter West, representing the Decorative Glass- workers' Association. Costs and selling prices. During the last 20 years or more, Ameri- can manufacturers of stained windows have been unable, on account of price, to compete with any of the European houses, particularly German and Austrian. England's best work is 25 per cent cheaper than that of American make. Competition with German and Aus- trian firms is a total impossibility ; there is only one solution to the problem a tariff based on the American valuation plan. American manufacturers want a tariff because of the difference in wages, and need protection against the commercial, i. e., not the high-grade win- dows. German wages are 14 cents per hour as compared with American of 80 cents per hour. It is the European wage scale that permits TO per cent of the church work in the United States to go to- European establishments. Size of industry. American manufacturers claim an output of some six or seven million dollars per year, and assert that importa- tions were never more than $200,000 annually. Comparability. American manufacturers can do the very best work that is produced in the world. In the stained-glass industry, it is not considered that any good windows come from Germany ; they are at best considered of a mediocre character. The following state- ments are taken from letters from Catholic priests : You have helped to prove the truth of my contention that our stained-glas& concerns in this country can do work in no way inferior to the makers of church windows abroad. Artistically it is just as good as any of the samples from the best European firms, and mechanically it is far better than the samples of the very best European firms. The witness referred in a copious brief (pp. 5032-5049) to a con- troversy originating with a German importer (Mr. F. X. Zettler. of Munich), and giving rise to certain statements by his agent, Mr. Louis Merkel, and another importer, Mr. Manton M. Wyvell. Mrj Merkel, the brief states, asserts that windows from Germany are caH ried out in real antique glass and that they can not be reproduced ia this country. And Mr. Wyvell is quoted as saying : When antique glass is specified for an order the domestic manufacturer wit import the same, at a high cost ; he also makes continuous efforts to bring DIGEST OF TARIFF HEARINGS, H. R. 7456. 603 European glass painters and workers over here, where the technique of stained glass is but little known. Commenting on these utterances, it is noted that a window made in Munich, costing $1.000, was installed in St. Bernard Church. Dayton, Ky.. by Pastor Griefenkamp. It is in memory of a young man killed in France and is a gift to the church from his mother. A further statement by Mr. Wyvell alludes to the claim made by Mr. Nader, of Daprato Studio, Union Hill, N. J., to the effect that a certain win- dow containing 100^ square feet can not be produced in his studio for less than $1,963.66, excluding profit, f. o. b. factory. In this con- nection Mr. Wyvell says: This statement alone should be sufficient to condemn all the claims of the organization, because American manufacturers of stained-glass windows never asked more than from $300 to $400 for a window of this size delivered and set in place, including their profit. For a window imported from Europe, duty free, a price of at least $600 to $700 will be asked, if of the same size and rich- ness. * * * Since then (the nineteenth century) the art has improved enormously and the real " antique glass," which lends the great brilliancy to windows, is now being made in various parts of Europe in 900 different shades and is used there exclusively, while here the cheap and artistic "cathedral glass " is worked into windows, and thus, because the art is an old-established one, better understood abroad than here, foreign artists in designing these win- dows have been able more truly to represent Christian feeling and sentiment than have domestic artists. * * * Stained-glass windows are works of art of high character, representative of the Christian or religious aspiration. * * * In Europe eminent painters in the Christian art are ready to draw cartoons for windows, while such articles are practically unknown here. liiites suggested. The witness wants a duty of about 63 per cent on stained glass. He wishes stricken from paragraph 1688 the follow- ing : " including stained or painted window glass or stained or painted glass windows imported by houses of worship." Hearings : Pages 5049-5050. Witness: Mr. Edward F. M'Grady, legislative agent of the Amer- ican Federation of Labor. Costs and selling prices. Importers from Austria and Germany are able to offer windows in America for $3.26 per square foot that cost the American manufacturer $12.72 per square foot to produce. The difference in this price is so great that no tariff will adequately protect the American worker short of the American valuation plan. Size of industry. In June, 1921, four small concerns in Germany reported that they had secured $400,000 worth of orders on stained glass windows in the United States, and at that particular time 15 of the largest concerns in the United States had only $105,000 worth of orders. Rates suggested. The witness wishes that the committee will give the glassworkers the only adequate relief an import duty, based on American valuation, that will be high enough to protect the Ameri- can worker from cheap European labor and broken-down foreign exchange. Remarks. The witness referred to a brief which, he understood, had been submitted by the Rev. John J. Burke, general secretary of the National Catholic Welfare Council, favoring a provision that orna- mental stained-glass windows, works of art, etc., when donated, may enter this country free of duty. In that brief it was stated that, if the National Catholic Welfare Council or the hierarchy of the Catho- 604 DIGEST OF TARIFF HEARINGS, H. R. 7456. lie Church of the United States were convinced that an American worker would suffer by the free importation of stained-glass win- dows, they would not seek to combat petitions presented to the com- mittee in favor of an adequate tariff. Hearings : Pages 5050-5058. Witness: Mr. Otto Heinigke, chairman tariff committee, National Ornamental Glass Manufacturers' Association of the United States and Canada. The witness took up the question of stained-glass window produc- tion as affected by the technical record of statistics. In the past, the sympathy of Congress has been enlisted for the church by the im- porters. This industry is subject to great fluctuations; during the war churches withheld almost all orders, and before the war produc- tion might range between $200,000 and $500,000. Labor, including high-class artists, accounts for 70 per cent of the costs. German manufacturers quote for windows at from $1.50 to $4 per square foot, while the cost in domestic factories is $9.46 per square foot. As regards the quality of American commercial win- dows, it is neither better nor poorer than the imported. Witness: The American Art Glass Co., Columbus, Ohio. (Brief; no appearance at hearings.) Comparability. The average stained window is offered by Ger- man importers for $3.26 per square foot less than before the war. The same window costs American producers $12.76 per square foot twice as much as before the war wages accounting for 70 per cent of that cost. Sixty per cent of the regular men of the company are unemployed. These windows are not necessities to churches, but luxuries. The churches are wealthier now than ever before, and these windows are gifts from their wealthiest me^m- bers people who have profited by the war. One German manufacturer states that he has orders for $140,000 worth of windows for American churches. Another had $80,000 worth, six months ago. There are two other German houses, each of which has probably twice as much as either of those mentioned. A hurried canvass of the 15 largest producers in the United States indicates that all producers together have" not $150,000 worth of orders, owing to the tremendous advantage possessed by the Ger- mans in their wage scale. " The incongruity of above situation is that hereafter, when a memorial window for American soldiers is to be erected, it will be manufactured by the nation that killed him the Germans while the American manufacturer, who has been called on to sacrifice both blood and money for victory, will be without work." Every Republican tariff has protected this industry, and it does not seem fair that the party which has so protected and encouraged it should now permit it to be destroyed by foreign competition. The churches are the only customers. The firm will appreciate anything done to save this business for American workmen and American capital. Witness: The Ornamental Glass Manufacturers' Association of Philadelphia. (Brief; no appearance at hearings.) House bill 7456, as reported by the Ways and Means Committee, gave protection to American manufacturers on stained and painted DIGEST OF TARIFF HEARINGS, H. R. 7456. 605 glass windows. An amendment to paragraph 168T, made on the floor of the House, permits the only consumers of this product to import it free a provision which would deliver the entire American market to the German manufacturer. The incongruity of this situation is apparent. Every Republican tariff has given protection to this industry and the business of American manufacturers has prospered under it. An attached petition, signed by manufacturers, artists, and crafts- men of the industry, asks that paragraph 1687 of the bill be amended so that it will read as reported by the Ways and Means Committee. Hearings: Pages 5058-5059. Witness : Mr. James H. Ityan, representing the National Catholic Welfare Council. (Brief.) The brief is a reply to statements made by other interests and affords an opportunity of renewing the council's objection to an im- port duty on stained glass. In requesting free admission it is stipu- lated that no windows are to come under this privilege unless they are of artistic merit and then only if imported directly by houses of worship. Emphasis is laid upon this product being the work of ar- tists rather than of artisans, just as in the creations of a sculptor or a portrait painter. A 000012897 5 Rff.MK H55|