and actually forced us into that position, so that if we wanted to import the intermediate product two years ago we could not buy a pound in Europe. They might do the same thing at any time.

Mr. HILL. Are the dyes which are patented in Germany also pat

ented here?

Mr. QUEENY. I presume so, for the reason that they are not manufactured here. I have the names of those dyes that are patented, but they are not manufactured here.

Mr. HILL. They would be patented by the German manufacturers here?

Mr. QUEENY. Yes; patented here. They protect themselves in every country.

In supplement to the foregoing we call your attention to the following from Treasury decision (13801) on our protest against the assessment of 25 per cent ad valorem rate on this product:

Lunt, general appraiser: The merchandise in question is produced by injecting hydrochloric (muriatic) acid into fuming sulphuric acid, which results in a chemical reaction in the formation of a new chemical compound which is in itself an acid. It follows from this finding of fact that the assess

ment of duty was properly made.

The following figures will show the important part 25 per cent duty on chlorosulphonic acid plays in the cost of the intermediate product known as orthotoluolsulphamid (or amid) which we wish to resume manufacturing:

100 tons chlorosulphonic acid costs c. i. f. St. Louis, including drums____ $5, 240 25 per cent duty (on cost of the acid and drums at point of shipment)--- 1, 100 One hundred tons, 200,000 pounds, chlorosulphonic acid is used in the production of 28,000 pounds of amid.

Thus it will be seen that the duty (25 per cent) on the acid contained in 1 pound of amid is about 4 cents to each pound of amid, which, added to the other increased costs over Germany for other materials used, labor, etc., makes the manufacture of the amid prohibitive in this country, notwithstanding the present rate (20 per cent) imposed on this product under paragraph 15.

Large quantities of chlorosulphonic acid are used in Germany for the sulphonation of dyes and other organic compounds, advantageously displacing sulphuric acid; as, for instance, in the manufacture of sulphonic acids of rosanilin, alizarin, purpurin, phenylaminoazobenzol, betanaphtolalphabet adisulfonic acid, etc. (See German patents 8764, 21903, 77596.)

As chlorosulphonic acid is not manufactured in this country by reason of insufficient demand, and which demand is not likely to show marked increase in the near future, the placing of chlorosulphonic acid on the free list could not possibly affect the acid industry of this country. On the other hand, an assessment of duty would not benefit the Government, because none would be imported.

We therefore respect fully request, in view of these facts, that acid chlorosulphonic be specially provided for in the free list.

Now, one more product under coal-tar preparations, paragraph

524

The CHAIRMAN. That is an item on the free list?

Mr. QUEENY. Yes; on the free list. The article we wish to import and use in our manufacture is paranitrochlorbenzol. It is quite a

long name, but you will find some equally long in that same paragraph.

The CHAIRMAN. Do you find that name in the paragraph?

Mr. QUEENY. No, sir; it is not there; but there are some others equally long.

The CHAIRMAN. Under what paragraph does that come in now? Mr. QUEENY. At the present time it comes in as a coal-tar preparation, not medicinal, or dye, at 20 per cent; and we ask to have that inserted in the free list for practically the same reason as the chlorosulphonic acid because this article also enters largely into the manufacture of patented dyes in Europe. We wish to manufacture phenacetin. Instead of importing the intermediate product as we are to-day, we wish to import the raw material and manufacture the intermediate product ourselves.

The CHAIRMAN. Is that a by-product, or does coal tar enter into that?

Mr. QUEENY. No; not a by-product, but it is a chemical compound made from coal tar; but in the manufacture of that chemical another is made, for which there is no use in this country, and consequently no American manufacturer would undertake its production because there is no outlet for this other product, which is used in Germany in equally as large quantities as the product which I have just mentioned, because it enters into the manufacture of the intermediate product for the manufacture of the patented sulphur dyes-the orthonitrochlorbenzol, which also is not manufactured nor used in this country.

Mr. HILL. Is not the reason why they are not manufactured here the fact that they are manufactured by foreign inventors?

Mr. QUEENY. I have not studied the aniline-dyes industry at all. It is a little out of our line, but it is assumed that because they are patented they are not manufactured in this country; and in connection with the manufacture of this product the other is also made, and consequently is not likely to be manufactured in this country at all, at least for some time, if ever.

Now, when the Dingley bill was passed in 1897 this product was known, but was not used commercially, or it is more than likely it would have been inserted in the same paragraph, because there are others used in the same manner for the manufacture of medicinal preparations. The raw material is not now imported into this country at all.

Mr. DALZELL. Would you like to have it inserted in paragraph 524 by name?

Mr. QUEENY. Yes; by name, specifically.

The CHAIRMAN. None of it is manufactured in this country at the present time?

Mr. QUEENY. None of it is manufactured, and none is imported. Mr. BOUTELL. Did you give the reason why it is not manufactured in this country?

Mr. QUEENY. Yes; because there is no demand for it.

Mr. BOUTELL. You have a demand for it?

Mr. QUEENY. We have a demand for the finished product, but we now import the intermediate product, which is made from paranitrochlorbenzol.

Mr. HILL. Why can you not manufacture the intermediate product in this country?

Mr. QUEENY. Because it can not be without this product mentioned. Without the paranitrochlorbenzol on the free list the intermediate product can not be manufactured here. The raw product is this article that I am asking to have inserted in the free list.

Mr. BOUTELL. Why is it that that is not produced in this country? Mr. QUEENY. Because, as I have just explained, in this manufacture of paranitrochlorbenzol the orthonitrochlorbenzol is also produced in equal quantity, and there is a large demand for that product in Europe for the manufacture of these patented dyes. If American manufacturers undertook the manufacture of this article that we are asking for, they would have no outlet for the other product, and consequently could not manufacture to compete with the German manufacturers. Both products must be made at the same time, because one is a by-product, or made at the same time with the other.

Mr. BOUTELL. Then I understand as to the reason why what we call the raw material is not produced in this country, that it is for commercial reasons, not because it could not be manufactured here? Mr. QUEENY. I suppose it is, but it could not be manufactured at a price that would enable the manufacturer in this country to compete with the German manufacturers, for the reasons I have stated. Mr. DALZELL. You contend, as I understand, that the same reasons that induce the putting of the articles named in paragraph 524 on the free list would operate to put this on?

Mr. QUEENY. Yes, 524; practically so.

Mr. UNDERWOOD. To put this article on the free list, which I understand is a raw material for the manufactured product, would that justify the reduction of the duty on the main product without interfering with the business?

Mr. QUEENY. I presume it would, because it would be practically on a parity with the foreign manufacturers in the production of that article.

Mr. GRIGGS. Then the finished product might be put on the free list?

Mr. QUEENY. Hardly.

Mr. GRIGGS. You say it puts you on a parity?

Mr. QUEENY. On a parity in the process of manufacture, but we have other expenses far in excess of the German manufacturers' expenses in the production of any chemical. At present we are relatively infants in the chemical industry. We need about fifteen years more to get on our feet. By the time of the next tariff revision we will probably be in better shape.

Mr. UNDERWOOD. If this were put on the free list, how would it affect the finished product without detriment to the main industry? Mr. QUEENY. I would say about 50 per cent of the present dutythe present duty on that product is 55 cents a pound.

The CHAIRMAN. Do you know what the equivalent ad valorem is! Mr. QUEENY. The equivalent ad valorem would be the price in Germany to-day is about 50 cents, 5 marks per kilo, the duty is 55 cents a pound, say 100 per cent.

The CHAIRMAN. You can figure that out.

Mr. QUEENY. The idea is to manufacture the intermediate product that is not manufactured in this country at the present time; instead of importing this intermediate product we wish to manufacture it

ourselves; and we feel we should be encouraged in that direction, since we are competing with the German products, which they have manufactured and controlled for years.

Now here is a product, paragraph 653, salacin, at the present time on the free list, not manufactured in this country, manufactured exclusively in Germany and England; manufactured from the willow, plenty of which material there is in this country, but we can not compete with Germany and England on that product. I ask that a duty of 25 per cent be levied to assist.

The CHAIRMAN. Can you manufacture with that duty?

Mr. QUEENY. I think so. The consumption goes into many thousands of pounds.

The CHAIRMAN. Why is the duty necessary?

Mr. QUEENY. The expenses in Europe in Germany and England-are very much less than they are in this country for the manufacture of any chemical product, so much so that it is foolhardy to attempt to compete.

The CHAIRMAN. This is used in the manufacture of other articles? Mr. QUEENY. No, sir. It is strictly a straight medicinal preparation. There is plenty of raw material in this country-willow; as you well know, that is what it is made from, the willow tree-as we have experimented and I know spent quite a sum of money in the endeavor to manufacture it, but we gave it up. We did not install a plant such as we have for the other products, but we worked it out in the laboratory. We can not do it without protection.

The CHAIRMAN. What amount is imported!

Mr. QUEENY. I presume about 20,000 pounds a year.

The CHAIRMAN. Six thousand pounds in 1907?

Mr. QUEENY. Yes; from 15,000 to 20,000 pounds a year. The price of that is $4 a pound, so that it runs into quite a little bit of money.

I am satisfied that the manufacture of that article would be undertaken in this country if some protection was given.

The CHAIRMAN. Do you recommend an ad valorem duty?

Mr. QUEENY. Yes, sir; of 25 per cent.

The CHAIRMAN. Is there any chance of undervaluation or anything of that kind, with respect to that article?

Mr. QUEENY. Well, there are only three manufacturers in the world at the present time. The valuation is pretty well understood. My idea for the tariff all the way through is more for a specific than for an ad valorem rate, in order to avoid those conditions; but I suggest 25 per cent because of other importations coming in at that rate. Mr. DALZELL. What do you say is the importation?

Mr. QUEENY. Twenty thousand pounds.

Mr. DALZELL. It is $16,000 worth, or 6,000 pounds.

Mr. QUEENY. Even if it is only 6,000, why should these goods be manufactured on the other side when they could be manufactured in this country?

Mr. HILL. The price averaged for some years $3.10, and last year it dropped to $2.60. What is the reason for that?

Mr. QUEENY. I do not know. It is about two years since we experimented on it, and gave it up, and it just occurred to me on the train coming down here to ask to have that taken out of the free list and given protection.

Mr. HILL. It started in at $1.48 and ran for six years, and the highest it got was $2.39, and then for about six years it ran at $3.50, and suddenly dropped to $2.60. Can you give an explanation?

Mr. QUEENY. I can not. I know it has ranged as high as $4 a pound in this country. It is sold by the agents of the foreign manufacturers in this country. I know that the market price for years was $4 a pound. That has been the market price in the United States for years. I will not say what it is to-day. There are other gentlemen in the room who may have looked into it.

Mr. HILL. Is it a patented article?

Mr. QUEENY. No, sir.

Mr. DALZELL. If it is not manufactured here, the price must be regulated by foreign competition.

Mr. QUEENY. I can not speak positively on that subject, but I think it likely. I do not see any reason why that should be on the free list when there is plenty of raw material in this country, and only a little encouragement is needed to make it here.

Mr. UNDERWOOD. What is the raw material?

Mr. QUEENY. The willow tree.

Mr. UNDERWOOD. What is it used for?

Mr. QUEENY. In medicines, for rheumatic troubles and malaria. Mr. UNDERWOOD. Would a duty of 25 per cent materially increase the cost of the preparation into which it enters?

Mr. QUEENY. No; not to any extent at all.

Mr. GRIGGS. Is $16,000 worth annually imported worth fooling about-worth establishing a plant for?

Mr. QUEENY. A plant can be installed in another plant-that is, it can be added to the articles of manufacture. We have undertaken to specialize some chemical products-things that are almost exclusively manufactured on the other side. We have followed that theory for years. We want to make the things that are now controlled in Europe.

Mr. GRIGGS. The reason why I made that remark is that there seems to be no demand for it.

Mr. QUEENY. There is demand. Even if it is only 6,000 pounds, it is $20,000 worth of business additional, or thereabouts, and it would be one more article added to the chemical line of American manufacture and which is not now producing any revenue to this Government.

Mr. GRIGGS. That would be specializing with a vengeance, I think. Mr. HILL. Is this exclusively a German product?

Mr. QUEENY. German and English; more particularly made in England than in Germany.

The CHAIRMAN. Now, you can proceed to the next topic.
Mr. QUEENY. Chemicals is all that you will take up to-day?
The CHAIRMAN. Yes, sir. We must keep it separate.

Mr. QUEENY. Then I have nothing further to-day.

Supplementing the foregoing, I find, on going over the factory calculations on my return home, that I made a very erroneous statement when I said the present rate of duty on phenacetin, i. e., 55 cents, could be reduced 50 per cent in event of placing paranitrochlorbenzol on the free list, which the following will demonstrate:

(a) Acetic acid enters largely and is a very important factor in the manufacture of phenacetin. The cost of acetic acid in Germany