LITHOPONE Crude lithopone, which is a combination of barium sulphate and zinc sulphide, is produced as a precipitate after various treatments applied to the two main crude raw materials, viz, barytes and zinc ore. The crude lithopone is subjected to various other processes before it becomes commercial lithopone. At the time the tariff act of 1922 became a law, the term "lithopone" was understood for practical and commercial purposes to mean that combination of barium sulphate and zinc sulphide in which the relative proportions of the ingredients were about 70 per cent barium sulphate to 30 per cent zinc sulphide. To a large extent this is the present meaning of the term when used without qualifying words. These proportions are of importance for the reason that the raw material from which comes the zinc sulphide in the precipitate is, say, four or five times as costly per ton or per pound as the raw material from which comes the barium sulphate. In Europe, within the past 10 years and possibly earlier, it was recognized that what has been called a "high strength" lithopone-i. e., a lithopone containing a percentage of zinc sulphide in excess of 30 per cent and less than 70 per cent of barium sulphate-had certain valuable uses and, though more costly than normal or standard lithopone, could command a higher price. Conspicuous among such valuable uses are those of paint pigments in which a high degree of hiding power' or power to cover and obliterate the existing color on a given surface is essential. Zinc sulphide is a pigment of great "hiding power." The larger the percentage of zinc sulphide in the lithopone the greater the lithopone's hiding power. The potentialities of price range for such high strength lithopone may be inferred from the fact that whereas the price of normal lithopone in the United States has ranged in the past 25 years from 3 to 7 cents a pound, the price of zinc sulphide has ranged from 18 to 71 cents a pound. The present price of normal lithopone is about 5 cents a pound and that of zinc sulphide about 20 cents. For high strength lighopones, containing above 30 per cent of zinc sulphide the price rises approximately with the proportion of zinc sulphide in the combination so that a high strength lithopone wherein are 90 per cent zinc sulphide and 10 per cent barium sulphate commands a price not much below the price of zinc sulphide itself. If we concede that an import duty of 134 cents per pound is a proper protective duty on normal lithopone composed of 30 per cent zinc sulphide and 70 per cent barium sulphate and commanding a price of 5 cents per pound, it by no means follows that the high strength lithopone selling at prices which may conceivably run nearly to 20 cents per pound are adequately protected by the same import duty. Yet the tariff act of 1922 is so worded as to afford no protection beyond 134 cents per pound on any lithopone-no matter how high its proportion of zinc sulphide and no matter how high the cost and selling price. The tariff act reads: * * lithopone, and other combinations or mixtures of zinc sulphide and barium sulphate, 134 cents per pound." Therefore, even though another commercial trade name should be applied to the high strength lithopones they would still be entered as imports dutiable at 134 cents per pound because they are confessedly "combinations or mixtures of zinc sulphide and barium sulphate." To remedy what we conceive to be a defect or an inadequacy in the tariff act of 1922 we recommend a change in that part of paragraph 79 which deals with lithopone, etc., so that the concluding portion thereof shall read as follows: "Lithopone, wherein the zinc sulphide content does not exceed 30 per cent, 134 cents per pound; lithopone, wherein the zinc sulphide content exceeds 30 per cent but does not exceed 40 per cent, 3 cents per pound; lithopone, wherein the zinc sulphide content exceeds 40 per cent but does not exceed 50 per cent, 32 cents per pound; lithopone, wherein the zinc sulphide content exceeds 50 per cent but does not exceed 60 per cent, 4 cents per pound; lithopone, wherein the zinc sulphide content exceeds 60 per cent but does not exceed 70 per cent, 41⁄2 cents per pound; lithopone, wherein the zinc sulphide content exceeds 70 per cent but does not exceed 80 per cent, 5 cents per pound; lithopone, wherein the zinc sulphide content exceeds 80 per cent but does not exceed 90 per cent, 51⁄2 cents per pound; lithopone, wherein the zinc sulphide content exceeds 90 per cent, 6 cents per pound." The growth and magnitude of the lithopone production of the United States may be learned by consulting United States Geological Survey Bulletin 8671 and the issues of Mineral Resources of the United States. From these authorities it appears that the total domestic production of lithopone in 1906 was 5,149 tons of 2,000 pounds, and that in 1927 the domestic production of lithopone was 176,994 tons of 2,000 pounds. At present, we believe, there are eight domestic producers, among which the above named corporation is probably the largest. The importations of lithopone from abroad have been substantial during nearly if not quite every year, but about two years ago the importations of high strength lithopone from Germany became so heavy as to cause a special investigation on the part of the United States Treasury Department to determine whether this foreign commodity was not being "dumped" into our markets. From 1922 to 1928 the importation of foreign lithopone, according to the statistics in Mineral Resources of the United States and in the Department of Commerce section of Customs Statistics, ranged as follows: There are, we believe, besides the above named corporation, two other domestic producers of high strength lithopones, neither of which other producers, as we understand, is now operating. Our first production of these high strength grades of lithopone (in which branch of the industry we were pioneers in this industry) was in 1924. Against the foreign competition we have not been able uniformly to show any profit. This, we presume, would also be true of the other domestic manufacturers; but with a rate of duty such as we recommend we believe, in view of our long experience in manufacturing normal grades of lithopone and other zinc pigments, that it is possible to build up and maintain a reasonably large and profitable business in the manufacture of high strength lithopones. ZINC SULPHIDE It will be perceived that much of what we have said of high strength lithopone applies with equal force to zinc sulphide. The tariff act of 1922, in paragraph 93 of Schedule 1, prescribes what in view of late experience seems an anomalous duty on zine sulphide of 11⁄2 cents per pound. We call it an anomalous duty because zinc sulphide as a merchantable commodity is several times more costly to make or to buy than lithopone or zinc oxide (both of which are dutiable at a slightly higher rate) and yet is accorded only the same rate of duty as is prescribed for the zinc content of zinc-bearing ore of the usual merchantable grade. The reasons for this peculiar condition of things are several. At the time the tariff act of 1922 became a law practically the only domestic production of zinc Eulphide was in the precipitated crude lithopone in conjunction with barium sulphate. As a separate commodity, outside of the results of small quantity operations in chemical laboratories, it was never made in America. It is true that it is found in a state of nature in zinc ore, but it can only be extracted therefrom and rendered into merchantable zinc sulphide by elaborate and costly processes. A further reason for its being virtually ignored in the tariff act of 1922 was that its usefulness as a separate pigment had not been generally recognized. To-day it is recognized as one of the best white paint pigments obtainable. It is now used not only in paints, enamels, and lacquers but in dental rubber and other special sorts of rubber, in linoleum, printing inks, and writing fluids. The greater part of the zinc sulphide used in America comes from abroad. The Mineral Resources of the United States and the reports of the Bureau of Foreign and Domestic Commerce show the importations to have increased from 9,990 pounds in 1917 to 259,931 pounds for the first 10 months of 1928. These imports came mainly from Germany with small tonnages from Great Britain and Denmark. In 1924, with no considerable domestic production of zinc sulphide as a separate commodity, the foreign article_commanded a price of upward of 70 cents per pound. At that time the New Jersey Zinc Co., at works situated in Palmerton, Pa., entered the field of zinc sulphide manufacture with the result that the price has been brought to less than half that figure. This company remains the le American producer of zinc sulphide as a separate commodity. To meet our domestic product the foreign article has now been offered in cities on the Atlantic seaboard at a figure sometimes as low as 18 cents per pound with the almost nominal duty of 11⁄2 cents duty prepaid. The New Jersey Zinc Co.'s domestic production of zinc sulphide has progressed at the following rate: 1924 1925 1926_ Pounds 1927. Pounds 109, 730 125, 940 At the present state of the art of manufacturing zinc sulphide and with such experience as we have had in the processes we are able to produce and market this commodity at less than one-half the price of, say, 70 cents, which the imported zinc sulphide was commanding in American markets; but we can not successfully compete against foreign zinc sulphide offered to our American customers at 18 cents per pound, duty paid. We have no means of knowing foreign costs, which we presume are not more than one-half the costs of the same processes in America. Made in America, zinc sulphide should bring not less than 24 cents per pound in order to yield the manufacturers a reasonable profit. This figure, in view of present foreign offerings, can not be realized without an import duty of 6 cents per pound which seems to us not only fair and reasonable but closely proportionate to the import duties on the less-costly zinc pigments such as lithopone and zinc oxide. As a further justification for the proposed duty of 6 cents a pound it should be borne in mind that titanium oxide, which is perhaps the closest competitor of zinc sulphide and which sells at from 18 cents to 20 cents per pound, is apparently protected by a duty of 30 per cent ad valorem under paragraph 91 as a compound or mixture containing titanium. Respectfully submitted. Approved: NEW JERSEY ZINC Co., AMERICAN ZINC INSTITUTE (INC.), BRIEF OF THE AMERCIAN ZINC INSTITUTE (INC.) The American Zinc Institute, which represents the zinc industry of the entire United States, includes also in its membership all the domestic producers of lithopone as follows: The Chemical & Pigment Co. (Inc.). The Eagle-Picher Lead Co. The Grasselli Chemical Co. Krebs Pigment & Chemical Co. The New Jersey Zinc Co. The Sherwin-Williams Co. The United Color & Pigment Co. The institute did not conceive it necessary to address the Committee on Ways and Means in support of the present import duty of 14 cents per pound on the normal or standard grades of lithopone. Its members regarded this rate as not open to criticism (in the absence of any increase in the duties on the raw materials from which lithopone is manufactured) and would not have gone further than to support the brief of the New Jersey Zinc Co. on the subject of the duty on "high strength" lithopone (Committee Print, unrevised, pp. 591-593) had not a firm of importers filed with the Committee on Ways and Means a brief asking a reduction of three-fourths of a cent per pound in the duty of all lithopones (Committee Print, unrevised, pp. 593–596). Lithopone, as the Committee on Ways and Means is aware, is a white pig ment manufactured by a succession of chemical and other processes from barytes ore and zinc ore. "Normal" lithopone consists of about 70 per cent barium sulphate and 30 per cent zinc sulphide. It now sells for about 5 cents a pound. There are seven domestic producers of lithopone. Their fac tories are in New Jersey, Pennsylvania, Delaware, Maryland, Illinois, and California. Barytes ore (protected by an import duty of $4 per ton) is found in Alabama Georgia, South Carolina, North Carolina, Tennessee, Kentucky, Missouri, Call fornia, and other States. Zinc ore (protected by an import duty, on the ordi nary commercial grades, of 12 cents per pound on the zinc contained therein is found in New York, New Jersey, Virginia, Tennessee, Wisconsin, Missouri Oklahoma, Kansas, New Mexico, Arizona, Colorado, Utah, Nevada, California Idaho, Montana, and other States. The American Zinc Institute takes most serious exception to the statements made in and the inferences to be drawn from the brief of the importing house of the C. J. Osborne Co., of New York City (Committee Print, unrevised, pp. 593-596), appearing in the report of the committee's hearings for January 9. In that brief is the statement that a reduction of three-fourths of a cent per pound in the duty on lithopone would be a benefit to the farmers in the cost of paint alone of $3,000,000 annually and $1,000,000 to the small home owners. Consider the implications of this statement made by these importers out of professed solicitude for the farmers and small home owners. Three-fourths of a cent on the pound would make $15 on the net ton. To save $4,000,000 annually for the farmers and small home owners they would have to use annually 266,000 tons of lithopone. The United States Geological Survey Bulletin No. 8671 and Mineral Resources of the United States show the domestic production of lithopone. The Department of Commerce section of Customs Statistics and Mineral Resources of the United States show the imports of foreign lithopone. In 1927 our producers manufactured and sold 176,994 tons. In the same year 7,962 tons were imported. The total tonnage available for the farmers and small-home owners would have been only 184,956 tons if they had taken every pound of it. Yet the brief of the importers would leave one to infer that the farmers and small-home owners use 266,000 tons, and use it exclusively in paint. On the subject of the amount of lithopone used in paint we submit that a more trustworthy authority than this firm of importers is the United States Department of Commerce, which, in press release No. 4342, dated June 4, 1928, gave the distribution of the domestic production of lithopone in 1927 as follows: If we may infer that the 7,962 tons of foreign lithopone imported into the United States in the same year were distributed in its uses in similar proportions we would increase the above figure of the paint, varnish, and lacquer consumption by 5.900 tons and obtain an aggregate of 137,045 tons used in those lines of trade in 1927. Yet the brief of the importers would have your committee believe that the figure is 266,000 tons, and that the entire tonnage went exclusively to the farmers and small-home owners for painting! As a matter of fact, fully three-quarters of all the lithopone used in paint in this country is used for the painting of hotels, apartment houses, office buildings, and industrial establishments. Therefore, one may truthfully say that its chief use, as a paint, is for large contract work in urban districts. This leaves only about one-fourth for other painting, including farmers' uses. It is not a paint pigment that is well known among farmers and is very little used by them. The ordinary “barn paint," made chiefly from iron oxide, contains no lithopone at all. We wish to mention one more equally reckless statement made by the importers in their brief to the effect that a reduction of three-fourths of a cent in the lithophone duty would mean a saving to the farmers of 50 cents on each automobile tire. To permit such a saving there would have to be 67 pounds of lithopone in each rubber tire. The impossibility of this result is adequately reflected by the fact that the average tire for a small car weighs only 15 to 20 pounds, and that, generally speaking, it contains no lithopone whatever. The use of lithopone in rubber is almost exclusively limited to rubber goods other than tires. It is our contention that, consistent with the existing import duties on its basic raw materials, viz, barytes and zinc ore, as well as the duties on the other products made from these raw materials, the lithopone duty of 14 cents per pound is logical and just for its normal or standard grades. The substantial and recently increasing imports of foreign lithopone shows that the duty is not prohibitive. Figures obtained from the Bureau of Foreign and Domestic Commerce, custom house, New York City, gave the imports of lithopone as 9,886 tons for 1928, as compared to 7,962 tons for 1927. As a matter of fact, one large paint manufacturer on the Atlantic seaboard makes it a practice to get his entire supply of the normal grades of lithopone from abroad. Under the present tariff act the trend of lithopone prices in this country has been generally downward, decreasing gradually from about 7 cents in March, 1923, to about 54 cents in the latter part of 1926, and there has been little or no change in price since that time. The industry is not an old one in this country. It has shown healthful progress under the present protective tariff. It furnishes a pigment cheaper than zinc oxide and far cheaper than white lead and the more costly pigments. It is highly competitive. First and last, from the domestic barytes and zinc mines to the shipment of the finished lithopone from the several factories, it gives employment to thousands of workmen and represents huge investment. It is not an industry to be hamstrung or sacrificed by a firm of importers who would ask free trade if they dared, and who attempt to bolster their plea for a cutting of the lithopone duty with the false argument that farmers and small home owners use lithopone considerably in their paints and tires and would save millions by a duty cut. The duty on normal or standard grades of lithopone is abundantly entitled to remain at its present figure as long as basic rates remain where they are. Should there be a radical increase in the duties on the crude materialsbarytes ore and zinc ore entering into the composition of lithopone, a necessity for an upward revision in the lithopone duty will confront us. Respectfully submitted. AMERICAN ZINC INSTITUTE (INC.). POTASSIUM CHLORATE [Par. 80] BRIEF OF THE DIAMOND MATCH CO., NEW YORK CITY Hon. WILLIS C. HAWLEY, Chairman Committee on Ways and Means, House of Representatives, Washington, D. C. DEAR SIR: We should like to respectfully request that your honorable committee give consideration to a reduction in the duty on chlorate of potash. As the largest users of this material in the United States, we, the Diamond Match Co., together with every other match manufacturer in the United States are finding the present duty of 24 cents per pound intolerable. We are faced with a flood of cheap foreign matches from practically every country in Europe. Chlorate of potash is the weightiest single ingredient that goes into a match head and such a large duty on this chemical has been a tremendous burden to bear when we are forced to meet competition on a finished product made with low-priced foreign chemicals and the labor scale of Europe and Asia. The American match industry employs several thousand workers, and the welfare of these workers from the highest to the lowest depends on our ability to meet foreign competition on our product. The burden of the present duty on chlorate of potash is one of the worst conditions we are facing in this competition. Being a product of such vital interest to us we have most naturally considered manufacturing chlorate of potash ourselves. We have found, and all other potential manufacturers of this chemical in the United States have found that under peace-time conditions, the manufacture of it is not to be considered as economically sound. There is no one, to our knowledge, manufacturing this commodity in the United States to-day. A lowering of the duty would work a hardship on no one, and would be a much needed relief to the great American match industry. No national emergency could arise which need cause any anxiety with respect to a supply of chlorate of potash. The art of its manufacture is well known to at least five concerns in the United States, including ourselves. During the World War our company, by three different processes, produced muriate of potash, from which chlorate of potash is made. We believe we may state, without fear of contradiction, that during this period it was mainly through our efforts that an ample supply of chlorate of potash was obtainable at reasonable prices considering the times. If the occasion demanded it we could again insure the country an ample supply of chlorate of potash. From information which we have we know that other concerns could also quickly produce chlorate of potash of highest quality in case of any emergency. |