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COMMITTEE ON WAYS AND MEANS,
January 31, 1913. The committee met at 10 o'clock a. m., Hon. Oscar W. Underwood in the chair.
Present: Messrs. Harrison, Brantley, Kitchin, James, Rainey, Dixon, Hull, Hammond, Peters, Palmer, Payne, Hill, Needham, Fordney, and Longworth.
The CHAIRMAN. The committee will come to order.
That on and after the day following the passage of this act, except as otherwise specially provided for in this act, the articles mentioned in the following paragraphs shall, when imported into the United States or into any of its possessions (except the Philippine Islands and the islands of Guam and Tutuila),
be exempt from duty: PARAGRAPH 482.
Acids: Arsenic, or arsenious, benzoic, carbolic, fluoric, hydrochloric or muriatic, nitric, phosphoric, phthalic, picric or nitropicric, prussic, silicic,
and valerianic. See J. F. Schoellkopf, page 5805. PARAGRAPH 483.
Aconite. PARAGRAPH 484.
Acorns, raw, dried or undried, but unground. PARAGRAPH 485.
Agates, unmanufactured. PARAGRAPH 486.
Albumen, not specially provided for in this section. PARAGRAPH 487.
Alizarin, natural or artificial, and dyes derived from alizarin or from anthracin.
TESTIMONY OF THOMAS M. LANE.
The witness was duly sworn by the chairman.
Mr. LANE. Mr. Chairman and gentlemen of the committee, I see that I have a place on the calendar to lay before you two subjects. With your permission I will reverse their order, if that is entirely satisfactory
The CHAIRMAN. Proceed in your own way, Mr. Lane.
Mr. LANE. In the report made by your committee last year on the chemical schedule, you pointed out the necessity for a revision PARAGRAPH 487-ALIZARIN. of the classification and terminology of the schedule as to certain matters in order to bring it abreast of the development of the chemical industry. We assume that one of the things you would desire to accomplish by a change in the law would be the elimination of inequalities in treatment between dyes belonging to the same class. And it is in that connection that we desire to lay before you some considerations bearing upon the classification of an important class of anthracin vat dyes. The paragraph upon which we particularly wish to speak is the one known as 487, which relates, to read the phraseology of the act itself, to “Alizarin, natural or artificial, and dyes derived from alizarin or from anthracin.” The phrase "derived from anthracin” in that paragraph is the phrase that affects our article and is the provision under which we have up to this time unsuccessfully endeavored to have it classified.
Mr. HAMMOND. What are you particularly interested in? In alizarin, did you say?
Mr. LANE. These are anthracin derivatives. That is our contention, and that is the contention that up to this time has been denied, so that that part of paragraph 487 that exempts dyes derived from anthracin is the part in which we are interested.
The dyes which are manufactured by the interests which I represent are known as hydron blues. They are a dye that is very largely used in Germany and might be very largely used in this country and subserve the same purpose as the anthracin derivatives, which are concededly such, and indigo. Hydron blues are made directly from a chemical substance called carbazol. Carbazol can be made in commercial quantities only from commercial anthracin. A method of separating carbazol from commercial anthracin in practicable commercial quantities has been perfected since the last tariff act went into effect, and the discovery of hydron blues followed upon the perfecting of this method of separating carbazol from commercial anthracin. These dyes are fast dyes; they are blue in color and exceed in fastness the anthracin derivatives and indigo. The fact that these dyes are derived from carbazol, which in turn can only be made in commercial quantities from anthracin, we think establishes their status as dyes derived from anthracin, but if the question were submitted to half a dozen different minds, I suppose we might have differences of opinion upon that subject.
What does the phrase "derived from anthracin” mean? Must the substance from which the dye is derived be the parent, or the grandparent, or the great-grandparent, or the great-great-grandparent of the dye that is brought into this country Up to this time the customs authorities and Board of General Appraisers have ruled against us on the proposition that these dyes are derived from anthracin. The question is now before the United States Court of Customs Appeals, has been argued at considerable length, and the facts have been fully presented there.
But if there is ambiguity in the law we think this is the place to come to have it cleared up. As these dyes are in the same class, to all intents and purposes, as the anthracin derivatives and indigo, which have hitherto been on the free list, we think they should be classified with those dyes. In the chemical bill, which passed the House of Representatives last year, Congress departed from the policy
that it has followed for 40 years, of placing anthracin derivatives and indigo on the free list, and taxed them at 10 per cent, at the same time reducing the duty, upon coal-tar colors 5 per cent. The company which I represent believes that to be a step in the right direction.
In fact, it has always stood upon this question of the classification of coal-tar dyes upon the proposition that there ought to be no distinctions, that you might raise more revenue and produce more equitable results by classifying the anthracin derivatives with the other coal-tar colors and taking the same duty, but you have followed that distinction as to the alizarin or anthracin derivatives and indigo, that prevailed during 40 years of legislation, when they were on the free list, and in so far as you departed from that in the chemical bill reported last year you still continue the policy of treating anthracin derivatives and indigo alike. You tax them both at 10 per cent. If that distinction is to be carried out, then we submit that all of the dyes derived from anthracin should be classified at the 10 per cent rate.
We have proposed to add to the provision for alizarin, natural or artificial, and dyes derived from alizarin or from anthracin, the words "or carbazol.” Thus by two words you can bring the terminology of that provision into proper relation with the development of the coal-tar industry.
As the law now stands, it is interpreted in favor of certain German manufacturers who produce a limited number of patented anthracin derivatives and import them into this country. It discriminates against other manufacturers—these manufacturers who since the last tariff was enacted have discovered and developed valuable competing products in the same class. As I have said, these are largely used in Germany. They would undoubtedly be far more widely used here if they were placed upon the same basis unequivocally as the conceded anthracin derivatives. And the present state of the law, we maintain, discriminates not only against the manufacturers of these dyes but also against the textile industry, which uses the dyes of the anthracin and indigo class. Since their discovery, some two years ago, they have competed with free goods, and have paid 30 per cent duty. The result has been that the importations have been relatively small, and the aggregate amount of duty has been unsubstantial. We think that would be greatly increased if they were placed in the same class as the dyes with which they directly compete.
I should like to file our brief, Mr. Chairman.
Mr. LANE. And, if it please the committee, have it printed at the end of my remarks upon this subject.
The CHAIRMAN. The stenographer will take the brief in for the record.
Said brief reads as follows:
BRIEF ON BEHALF OF IMPORTERS OF CERTAIN ANTHRACENE VAT DYES.
The COMMITTEE ON WAYS AND MEANS,
House of Representatives, Washington, D. C. GENTLEMEN: We desire to call to the attention of your committee certain inequalities in the treatment, under existing law, of various anthracene dyes belonging to the class known as "fast vat dyes,” which inequalities we believe will be perpetuated if