Mr. CLARK. You want to get all of it, then? That is the whole tale, is it not? Mr. Cox. Not at all; not at all. Mr. BONYNGE. Do you want the tariff reduced on your finished product? Mr. Cox. We would be very glad to have it done. We are quite willing. Mr. CLARK. On the finished product? Mr. Cox. Yes, sir; we are entirely willing to have it done. Mr. CLARK. As far as I am concerned, you can have it done. [Laughter.] Mr. Cox. If you take the tariff off of our raw material, we shall be most glad to have it taken off the finished product. Mr. CLARK. Did you ever study about the meaning of the word frazzle" that President Roosevelt has lately adopted? Mr. Cox. Yes, sir; I have heard the word used. Mr. CLARK. That applies to this committee. Mr. Cox. I should think it might, from what I have heard to-day. Mr. CLARK. We are just "worn to a frazzle." [Laughter.] Mr. Cox. We think that any increase of duties is contrary to the spirit of the times. We think that to add (as has been suggested) to the present duties on bar steel containing tungsten a further duty to represent the duty on the tungsten contained in it, as advocated by Mr. Park, is a retrograde step. We think it is contrary to the spirit of the times, and repugnant to the general sentiment that calls for a reduction of the tariff rather than an increase in it. Mr. CLARK. The whole protective system is opposed to the spirit of the times, is it not? Mr. Cox. Yes; I think it is. I do not think the time is ready for a complete relaxation of the system; but I think it is certainly ready for a very considerable modification of it. What has been said with reference to ferro-tungsten applies equally well to ferro-chromium, ferro-titanium, ferro-vanadium, and most of the other ferro alloys. In all these cases the cost is not in the labor required to produce the material, but lies altogether in the initial value of the raw material. In the case of chromium, almost the entire source of chromium is foreign to this country. I am not positive that there is any chromium ore mined in America. It is almost all Turkish ore. In the case of vanadium, the principal vanadium mines are situated in South America-I believe in Peru. The classification of ferrotungsten, ferro-vanadium, and ferro-chromium under paragraph 122 has already been held as settled by the New York circuit court of appeals; but we think they should be specifically mentioned, so as to avoid such a condition as we are in to-day, of having a high duty collected from us, and being obliged to sue for the recovery of it. Mr. BONYNGE. How much is a pound of ferro-vanadium (if that is the correct name of it) worth? Mr. Cox. It varies a little, according to quality, but the usual price to-day is $5 a pound of contained vanadium. Mr. BONYNGE. Mr. Brown said it went up to $4,000, I believe. Mr. Cox. Four thousand dollars a ton-well, I have never heard of such a price. Many years ago it used to be offered at $10 a pound, but for the last three or four years it has been offered at $5 a pound. Mr. BONYNGE. Does a pound vary in value according to the amount of iron which it has in it, or the amount of vanadium? Mr. Cox. The vanadium in it. The vanadium is the only thing whose value is counted. Mr. BONYNGE. Does it greatly vary in value according to the amount of vanadium that is in the pound? Mr. Cox. No. A ferro-vanadium which is richer than about 35 per cent is hardly applicable to the manufacture of steel; so it practically all ranges between 15 and 35 per cent of vanadium, and that vanadium is charged for by the American Vanadium Company usually at $5 per pound. Mr. BONYNGE. It varies from 15 to 35 per cent? Mr. Cox. Yes; but they do not charge per pound of ferro-vanadium. They charge per pound of the vanadium contained in the ferro. So if it contained 30 per cent, they would charge $1.50 for it. Mr. BONYNGE. They charge on the vanadium, and not on the pound? Mr. Cox. They charge on the vanadium alone. Mr. BONYNGE. Not on the iron and vanadium, but simply on the vanadium? Mr. Cox. They charge on the vanadium. The iron they throw in without any extra price. Mr. GRIGGS. What do you manufacture? Mr. Cox. We manufacture steel specialties. We manufacture selfhardening steels. Mr. GRIGGS. Is there a duty on them? Mr. Cox. In some cases; yes. Mr. GRIGGS. What do you say to taking some of it off? Mr. Cox. We are perfectly willing. Mr. GRIGGS. Perfectly willing? Mr. Cox. Perfectly willing. Mr. GRIGGS. Take that down, Mr. Stenographer. [Laughter.] Mr. Cox. We are perfectly willing; but we would like, as far as possible, to have the taking of protection from us coupled with a reduction of the duties that we are obliged to pay. Mr. CLARK. What is the volume of the business in these articles? How much does it amount to in the course of twelve months? Mr. Cox. Are you referring to our own output, or to the output of the country? Mr. CLARK. The output of the country. Mr. Cox. I do not know. Mr. GRIGGS. What is your output? Mr. Cox. Our output is worth about $275,000 a year. Mr. GRIGGS. You say you are paying a duty under protest on the stuff? Mr. Cox. Yes. Mr. GRIGGS. And you are suing for it back? Mr. Cox. Yes. We were placed in the anomalous position of paying $4 a ton duty in New York and 20 per cent in Philadelphia; and as at that time the ferro-tungsten we were importing was costing us about a dollar a pound, we were paying altogether $1.20 a pound. [After making a calculation.] Yes; that is right. We were paying a hundred cents a pound, a dollar a pound, for the tungsten content, and we were paying 20 cents duty. We were paying 20 cents a pound duty in Philadelphia, and paying $4 a ton duty in New York for the same material. Mr. GRIGGS. Are you putting that on the price of the article to the consumer? Mr. Cox. The extra duty? Mr. GRIGGS. Yes. Mr. Cox. We can not say positively that we are, except that we can not sell as cheaply as we would if we did not have to pay that duty. Mr. GRIGGS. Yes. I suppose the best reason that you can not be positive that you are putting it on the article is that it would be so hard for you to ascertain how to distribute it back among your customers? Mr. Cox. The idea is simply that what you have to pay extra on your raw materials means that your cost is that much higher. If you sell at the same price, and your raw materials cost more, you make less profit; or if you make the same profit, you go higher. Mr. GRIGGS. If you recover, you are going to divide what you recover among your customers, are you? Mr. Cox. I do not believe that would be possible. Mr. GRIGGS. You could not ascertain it correctly? Mr. CLARK. If there are two rates, one in Philadelphia and one in New York, why do you not import at the port where it costs you the least? Mr. Cox. That is what we did, practically; but we did not know anything about it until the imports were in there, and we happened to have quite a large quantity of the material. We have not imported any since. Mr. CLARK. You can not get that back; but you might provide for the future? Mr. Cox. That is true. Mr. CLARK. By importing at the point of least-——— Mr. CLARK. Yes; of least resistance. Mr. BONYNGE. Where do you get your ferro-tungsten? Mr. Cox. Most recently altogether from the importing houses in this country. Mr. BONYNGE. From what country does it come? Mr. Cox. I do not know. I know a good deal comes from England, from the firm of R. G. Blackwell & Co., who are large makers of ferro-tungsten; but usually we do not deal with them. We deal with some importing house. I wish, however, to correct one impression that I think was made by Mr. Brown, and that is as to the very small quantities of these ferroalloys that are used, according to him. There are to-day, I think I might say, four special grades of this self-hardening steel, or these high-speed steels, the content of tungsten in which varies all the way from 6 per cent to 20 per cent; so that there is 20 cents a pound at once on the cost of steel in the shape of tungsten that it contains. The plea that he practically made for the retention of a very high duty on electrically-made ferrochromium-on account of its necessity for war uses-I do not think is a very practical one, because the source of supply of the raw material is not in this country, and unless they had in this country enormous stocks of the raw material it would not be forthcoming in time of war under any circumstances, and would at once be declared contraband of war, just as niter has more than once been declared contraband of war because of its entering into the manufacture of the old forms of black powder. The amounts of ferrochromium used are even much greater than in the case of ferrotungsten, because to-day practically all armor plate contains a very notable proportion of chromium, and so do most projectiles; and the weights of armor plate and projectiles run into very, very heavy tonnage, considering the high class and the high grade of steel that they are--not into the millions of tons, but still into the thousands of tons. The CHAIRMAN. Is there anything further? ELECTRO-METALLURGICAL CO., NIAGARA FALLS, N. Y., SUBMITS SUPPLEMENTAL BRIEF RELATIVE TO FERRO ALLOYS. WASHINGTON, D. C., December 4, 1908. COMMITTEE ON WAYS AND MANS, Washington, D. C. GENTLEMEN: We beg to submit our reasons for asking that in the coming revision of the tariff you give special attention to the status of ferro-silicon, ferro-chrome, ferro-tungsten, and the other ferro alloys (except ferro-manganese, which is in a different category, and with which we are not concerned), and of the metals which are the most valuable components of those alloys. We ask (1) that the rate of duty be made clear and certain; (2) that the duty be equalized on the articles mentioned and be an ad valorem one; (3) that the duty be made a reasonable one on them all. THE DUTY SHOULD BE MADE CLEAR AND CERTAIN. It is not so now on the ferros we speak of (except ferro-silicon). They are not mentioned in the law by name, and it has been held in court that they are not “metal unwrought" because they are not capable of being wrought, and that they are therefore dutiable by similitude to ferro-manganese at only $4 a ton, although some of them are worth over $4.000 a ton. (United States v. Roessler & Hasslacher Chemical Co., 137 Fed., 770, C. C. A., second circuit, New York.) But later another court held that certain bronze-hardening alloy, not any more capable of being wrought than our ferros, was properly dutiable at 20 per cent ad valorem as "metals unwrought." (Thomas . Wm. Cramp & Sons Ship and Engine Building Co., 142 Fed., 734, C. C. A., third circuit, Philadelphia.) So, while for a time the foreign ferros were admitted at the trivial duty of $4 a ton, they (except ferrosilicon and ferromanganese) are now being assessed at 20 per cent ad valorem to await the final result of renewed litigation. A new case was made, which was decided by the Board of United States General Appraisers in favor of the 20 per cent assessment, but this is now pending on appeal in the United States circuit court in Philadelphia (Lavino v. United States, Hempstead v. United States, and Hampton v. United States). The result of that litigation will doubtless be favorable, but we submit that the law should be made clear beyond peradventure. As the foreign ferros have been admitted at one time at only $4 a ton, and possibly may again secure that rate of duty by some court decision, the domestic interests can not go ahead with the development of their expensive plants with the requisite assurance of stability. THE DUTY SHOULD BE EQUALIZED AND BE MADE AD VALOREM. The reason which once existed for putting ferrosilicon at $4 a ton duty no longer exists. This rate, the same as that on pig iron, originated when ferrosilicon was made in a blast furnace only, contained only 10 per cent or 12 per cent of silicon, and was worth about $20 a ton, making the duty equivalent to about 20 per cent ad valorem. It may be added that spiegeleisen and ferromanganese have always, even up to date, been made in blast furnaces only. Ferrosilicon to-day, besides being still produced by the blast furnace, can be and is made by electro-metallurgical processes to contain as high as 75 per cent or more of silicon, and this is worth from four to eight times as much as the lower-grade article. It is not right that these different products should carry the same per ton duty, and an ad valorem rate will give the proper proportion in the duty automatically, because the value varies with the silicon content. Each one of the other ferros also varies in the content of its valuable material-the chromium, tungsten, etc.--and takes a correspondingly variable price. Here, also, an ad valorem rate is the only feasible one. And ferrosilicon and the other ferros (except ferromanganese), being made of varying grades and values by blast furnace, or electric furnace, or chemical process, should all be put on a parity in the tariff. Of course, the duty should be levied on the metals themselveschromium, tungsten, etc.-at the same rate as on the ferro alloys of them, since otherwise there would be great inducement to evasion of the intended duty. Moreover, our arguments are applicable to both the metals and their alloys. THE DUTY SHOULD BE A REASONABLE ONE FOR DEVELOPMENT AND PROTECTION. The present duty of $4 a ton on ferrosilicon has seen the decay of many blast furnaces in the United States which formerly produced the low grade, while, on the other hand, the electric furnaces can not effectively compete in high-grade ferrosilicon with the foreign product on the basis of the present duty. The duty on all the ferro alloys (except ferromanganese), and the metals from which they derive their chief characteristics, should be put at 30 per cent ad valorem. A less rate than that will not place the industry upon a stable basis and enable it to successfully compete with foreign producers. There ought to be no dispute of our statements concerning the cost of the ferro alloys. The official record of the cases now pending in |