Mr. ALDRICH. If you eliminate tapioca entirely, could cornstarch cover all the things that tapioca is used for?

Mr. CHAPIN. No; it could not, and that is the reason we are not asking for a prohibitive tariff. Tapioca will come in just the same for these special uses, and this tariff asked for will not be any particular burden.

Mr. RAMSEYER. In opening your statement you said you represented the wet-milling corn industry. Just what is the meaning of

wet?

Mr. CHAPIN. That is perhaps a technical statement, and I am glad to explain it.

Corn is essentially a starch-bearing plant. That is what we grow corn for. That is what it is fed to animals for. The most satisfactory way that has ever been developed for getting the starch out of corn to reduce it to a very fine powder which contains both the gluten and the starch and then extract the starch by letting the starch settle. The gluten is more soluble and stays in the water, and the starch settles out. That is the reason for the name "wet milling." There is no other way that we know of for getting the starch out of the corn than by the wet-milling process.

Mr. RAMSEYER. That applies also to getting the corn oil and corn sirup?

Mr. CHAPIN. Yes. It is all one process. The first thing we do with the corn is put it into vats that contain water.

Mr. RAMSEYER. What uses are made of cornstarch?

Mr. CHAPIN. Cornstarch is perhaps used about 40 per cent for food and the rest for various mechanical processes. They are so numerous that it would require a comprehensive list to give them all to you. Mr. RAMSEYER. The more important ones.

Mr. CHAPIN. Starch is used for paste; for adhesives, either as starch or by heating and treating with chemicals and making dextrin, which is very similar to gum arabic. It is also used for textile purposes, for finishing cotton, for laundry purposes, and for baking powder. It is also used in the manufacture of explosives.

Mr. RAMSEYER. Does your brief show the increase in the use of cornstarch in this country over the last 10 years?

Mr. CHAPIN. No; it does not, but I will be glad to file a supplemental brief so that the committee will have it before them. We endeavored to keep this brief as short as possible.

Mr. RAMSEYER. I wish you would do that.

Mr. CHAPIN. Yes, sir.

Mr. CHINDBLOM. Is tapioca starch the principal starch on which you are asking a duty?

Mr. CHAPIN. Tapioca and sago. Sago is less of a competitor, and has not increased in volume, because sago is derived from a palm tree, and it takes 15 years to grow a tree, whereas tapioca is grown more like potatoes, and in the tropics they can grow frequent crops. Along that line, the increase in production in the Dutch East Indies from 1921 up to the present time has been two and a half times. Mr. CHINDBLOM. What rate are you asking on this?

Mr. CHAPIN. 45 per cent ad valorem.

Mr. CHINDBLOM. You do not want a specific rate that is now on dextrin?

Mr. CHAPIN. We are inclined to favor the research and thought which has been carried on by the American Farm Bureau Federation, as being of importance.

Mr. CHINDBLOM. Are any of the cooperative farm organizations interested in this organization?

Mr. CHAPIN. I believe you will find that Mr. Gray this afternoon will speak along the same lines I have spoken.

Mr. CHINDBLOM. Are they financially interested in these organizations that you represent?

Mr. CHAPIN. No, no. We are manufacturers, and we are not pleading so much for the protection of our workmen, although we employ 6,500 workmen, but we are pointing out the fact that this importation of tapioca starch is displacing American-made cornstarch, and consequently we are using less corn.

Mr. CHINDBLOM. Where are your plants and your factories? Mr. CHAPIN. They are located largely in Illinois and Iowa. The list is given in the brief which has been filed.

Mr. CHINDBLOM. This is rather a new industry; is it not? Mr. CHAPIN. No. It is an old industry. It has been growing. We were about one-half the size in 1914 that we are now. We have been growing at the rate of about 5 per cent per year, but as I say, we use one-third of the corn which comes to primary markets, so that we are not an unimportant factor, especially, as we are buying every day in the year. Our factories run very steadily.

Mr. RAINEY. Do you utilize Argentine corn in the production of your products?

Mr. CHAPIN. Yes. I am very glad to give you that figure so that it will be on the record. In the last three years our industry used 1,152,283 bushels of Argentine corn.

Mr. RAINEY. At what plant?

Mr. CHAPIN. At a plant located in Edgewater, N. J., which is the only plant where Argentine corn can be used advantageously.

Mr. RAINEY. That is where you manufacture for export?

Mr. CHAPIN. Yes. During the same three years we used 253,000,000 bushels of American corn, so that in three years we have used one two hundred and twentieth of Argentine corn. Of that corn which we imported we paid a duty of 15 cents a bushel on 760,000, seven-elevenths of our importation, and the rest was exported in bond. So that in our brief we state that we are in favor of higher rates of duty on Argentine corn, so that we are not looking to Argentina for our supply. We are looking to the American farmers to give us the

corn we want.

Mr. RAINEY. This Argentina corn at your Edgewater plant is used for making corn sirup?

Mr. CHAPIN. Well, corn sirup and cornstarch.

Mr. RAINEY. What becomes of that corn sirup that you manufacture there? Does it go on the market here?

Mr. CHAPIN. Well, the product of about 760,000 bushels in the last three years came on the American market because we paid duty on it. The other product was manufactured in bond and exported. Mr. RAINEY. And then you got a drawback?

Mr. CHAPIN. Then we got a drawback. There was no duty paid. Mr. RAINEY. How does the Argentine corn and the American corn compare?

Mr. CHAPIN. Well, it is a different type of corn. It is corn that is known as the flint variety, and perhaps is a little higher in oil content, but I will emphasize again that we are not particularly interested in Argentine corn. The only reason that we ever import it is when the American corn gets high and scarce.

Mr. RAINEY. And then only at one plant?

Mr. CHAPIN. And then only at one plant, and, if there is a still higher fence to be put up we will help to build the fence, as it were. Mr. RAINEY. It is a matter of indifference to you?

Mr. CHAPIN. Entire indifference to us. In fact, we state in our brief that we are not opposed to a higher duty, which, for a manufacturer, is a very definite statement.

Mr. RAINEY. What are the qualities of these respective corns produced down there and here, as to feeding values?

Mr. CHAPIN. There is very little difference. Perhaps, if I expressed it for your easy understanding, their corn is a little more like popcorn. It is that type of corn, rather than the broad flat berry that we raise in this country.

Mr. RAINEY. The berry that we raise here is more adapted for your purposes than theirs?

Mr. CHAPIN. Well, it is entirely satisfactory to us. American corn.

Mr. RAINEY. You prefer that?

Mr. CHAPIN. We prefer the American corn; yes, sir.

We thrive on

Mr. RAINEY. Is starch used now as a substitute for flour to any degree?

Mr. CHAPIN. No, it is not; except perhaps the bakers may use it in mixing, to make their product a little shorter, the same as the house wife will use starch in making pastry.

Mr. RAINEY. Some years ago you sold corn flour to commercial bakers quite largely. Do you know how much they sell them now? I mean cornstarch

Mr. CHAPIN. Well, it is quite a considerable amount. I could give you the exact figure for your information, but, offhand, it would run probably many million pounds a year of cornstarch that is used by bakers and also by confectioners. They use it for dusting their tables and in various other ways. Starch has a tremendously varied application.

Mr. RAINEY. But the bakers now are actually using it in the manufacture of bread?

Mr. CHAPIN. No. So far as I know, they are not using it in the manufacture of bread. They favor glutinous flour, but they might possibly use it in cakes or pies, or something like that, where they wanted to have their product a little bit short, to use a housewife's expression.

Mr. RAINEY. There is a tax on mixed flour, is there not?

Mr. CHAPIN. Yes, sir. As far as I know, there is none of it made. That tax is sufficient to make it prohibitive.

Mr. RAINEY. On account of the regulations?

Mr. CHAPIN. On account of the regulations.

Mr. RAINEY. There is not any mixed flour on the market?

Mr. CHAPIN. Not that I know of. I do not hear of any.

Mr. RAINEY. It makes just as good bread as whole flour, does it

not?

Mr. CHAPIN. There is a great deal of flour sold at a high price, which has a higher starch content. Soft winter wheat flours all have

higher starch content than spring wheat flours.

Mr. RAINEY. Some years ago your organization was responsible for quite a hearing to take off that tax?

Mr. CHAPIN. Yes, in 1915. At that time conditions seemed to call for greater utilization of flour, and it was a reflex of World War conditions.

Mr. RAINEY. That was long before the war?

Mr. CHAPIN. Yes, before we entered the war.

Mr. RAINEY. At that time you were only selling flour for dusting tables. Now you are selling an immense amount of it. Does that have any effect in changing the policies of the Corn Products Co.?

Mr. CHAPIN. We make starch-that is, we have a latent market for starch, and we try to find buyers for it, and in the search for new markets, I think the development has been along nonfood lines more than on food lines, because it is a cheap carbohydrate, and a great many uses are being found for it constantly.

(Mr. Chapin submitted the following brief:)

BRIEF OF THE ASSOCIATED CORN PRODUCTS MANUFACTURERS

Anheuser Busch (Inc.), St. Louis, Mo.

American Maize Products Co., Roby, Ind.

Clinton Corn Syrup Refining Co., Clinton, Iowa.

Corn Products Refining Co., factories at Argo, Ill., Pekin, Ill., Kansas City, Mo., and Edgewater, N. J.

J. C. Hubinger Bros. Co., Keokuk, Iowa.
Huron Milling Co., Harbor Beach, Mich.
Keever Starch Co., Columbus, Ohio.

Penick & Ford (Ltd.), Cedar Rapids, Iowa.
Piel Bros. Starch Co., Indianapolis, Ind.

A. E. Staley Mfg. Co., Decatur, Ill.

Union Starch & Refining Co., factories at Edinburg, Ind., and Granite City, Ill. Comprising all the wet-milling corn industry of the United States, engaged in producing numerous and various products from shelled corn, the principal products being corn starches, corn dextrins, corn sirup, corn sugars, corn oil, and corn gluten feed.

Consumption upwards of 85,000,000 bushels of corn annually, or one-third of the receipts at primary markets-increase of 70 per cent since 1913.

Wages paid in 1927, over $10,000,000, to more than 6,500 wage earners. Free importations of sago and tapioca starches produced by cheap foreign tropical agricultural labor reduce consumption of American corn.

Our industry is interested in the following schedules: Schedule No. 1, starches, dextrins, oils; Schedule No. 5, sugars, sirups, and manufactures of; Schedule No. 7, agricultural products and provisions; Schedule No. 15, free list. While our interests extend to the several schedules listed, we will at this time discuss only such items as are included in Schedule No. 1, namely, oils expressed or extracted, paragraphs 54, 55, and 57; starches, paragraph 85; and dextrins, paragraph 86; these paragraphs refer to the tariff act of 1922. However, on account of close interrelationship it will be necessary to refer to other paragraphs including the free list.

As of first importance, it should be emphasized that the welfare and protection of the corn-products industry is intimately connected with the welfare and protection of agriculture, notably with the production of corn, our largest and most valuable crop. Briefly, for the past five years, 1923-1927, the corn crop has averaged more than 2,750,000,000 bushels, of which only 235,000,000, or 8.46 per cent, reached the primary markets, and thus determined the selling price for corn. During this period the corn-products industry consumed about onethird of the "cash corn.' Manifestly this industry's demand for corn is a determining factor in the price which the farmer receives for his product. This relationship will be more definitely developed at a later appearance before your committee.

The paragraphs of the tariff act of 1922, referred to, will be taken up in numerical order, which does not necessarily represent their respective importance:

CORN OIL

The oils named in paragraphs 54, 55, 56, 57, and 58, and those oils listed in the free list, paragraph 1632, notably sesame oil, compete directly or indirectly with oil obtained from corn.

We respectfully request that the present rates of duty be at least maintained on the oils in these several paragraphs, and that sesame oil be made dutiable and a duty be named on corn oil as a specific product equal to the duty placed on cottonseed oil, which is now 3 cents per pound.

OIL CAKE AND OIL CAKE MEAL

Closely related to corn oil are oil cake and oil cake meal. These products will be more specifically discussed under Schedules 7 and 15. When oil is extracted from oil-bearing parts of plants, there remains a cake called oil cake, which when ground is known as "oil cake meal." The production of these articles is a necessary concomitant of oil production. Oil cake and oil cake meal from various sources are used as an important ingredient in stock and cattle feeds. In the free list, paragraph 1629, tariff act of 1922, oil cake and oil cake meal are entered as exempt from duty. This designation includes soy bean meal and oil seed cake, and meals which now enter the United States without payment of import duties and compete with and displace similar products produced indirectly by American agriculture and manufactured in American factories. The past seven years show:

IMPORTS OF OIL CAKE AND OIL MEAL TO UNITED STATES

Stock and cattle and poultry feed are consumed by the stock raising and dairy interests, and poultry and egg producers, which purchase feeds produced in the United States as well as feed constituents imported from abroad. Importations of cattle, sheep, goats, swine, meat products, milk, butter, cheese, poultry, eggs are all subject to import duties under the existing tariff law (pars. 701, 702, 703, 706, 707, 709, 710, 711, 712, 713), enabling the producers under the existing tariff law to meet foreign competition. Farmers, producing directly or indirectly feedstuffs; and manufacturers processing farm products fit for use in feeds, suffer from the free importation of oil cake and oil cake meal. We respectfully request that the present rate of duty on mixed feed, as set forth in paragraph 730, be maintained, and a corresponding tariff be imposed on oil and oil cake meal, and that these items be removed from the free list.

STARCHES AND DEXTRINS, SAGO AND TAPIOCA FLOUR

Here again we have a most intimate relationship between agriculture and industry. All sources of starch are products of agriculture-cornstarch, wheat starch, rice starch, potato starch, tapioca starch, sago starch, etc. All are produced from the respective agricultural products. Likewise all dextrins, burnt starches, British gums, are produced exclusively from starch, and therefore are in the final analysis products of agriculture. Manifestly, if the duties imposed upon certain agricultural products are not definitely correlated with duties on starches and dextrins; and those on starches and dextrins with each other, the whole system of protection for the farmer and for industry falls apart. It is impossible to separate the interests of agriculture and industry in this particular instance. What are proper and effective duties on corn and potatoes depend upon the duties on cornstarch and potato starch, and particularly upon sago flour and tapioca flour, used as starch for starch purposes, but not produced within our boundaries. In like manner, proper and effective duty on starches depends upon the duty imposed upon dextrins and vice versa. The problem must be considered as a whole to reach a logical solution. For simplicity sake, corn, our most important and valuable crop, will be used for illustration, although other domestic sources of starch could be used.

In the tariff act of 1922, paragraph 724 provides: Corn or maize, including cracked corn, 15 cents per bushel of 56 pounds; corn grits, meal and flour, and similar products, 30 cents per 100 pounds.