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(2) On page 10, lines 9 and 10, strike out the words “gum copal, one-half of 1 per cent per pound;" also on page 10, line 13, strike out the words "gum kauri and damar.” (3) On page 10, line 16, strike out the first word "Indigo.”
(4) On page 12, line 25, strike out the words and soya-bean," and on page 13, line 1, the first word "oil." (5) On page 13, line 9, strike out the words “Chinese-nut oil.”
(6) On page 17, line 21, strike out the word “twenty-five," and substitute in lieu thereof the word "fifteen," and on page 18, lines 1 and 2, strike out the word "twentyfive" and substitute therefor the word “fifteen."
(7) On page 21, after paragraph 78, insert as a new paragraph the following: “Alizarin, natural or artificial, and dyes derived from alizarin or from anthracene, and indigo."
(8) On page 22, after paragraph 88, insert as a new paragraph the following: “Gum copal, gum kauri, and damar.'
(9) On page 22, in line 25, after the word “petroleum,” insert the following: "Soya bean oil and Chinese-nut oil." By these amendments the dyes which are used in coloring the cheaper cotton goods
upon the free list where they have been in previous tariff bills, and where, we think, they should remain in the interest of the consumer.
By amendment 7 the duty upon varnishes is reduced from 25 per cent ad valorem to 15 per cent ad valorem, it being evident from the testimony of manufacturers of varnishes at the hearings before the Finance Committee that such a reduction can be made without any injury to these industries, provided their imported raw materials are left upon the free list. In fact, they frankly admitted that the need for protection had very largely disappeared.
We recommend the passage of the bill with these amendments for the following reasons:
1. Because it furnishes a more scientific classification both as to subjects and as to rates of duty and makes a reduction in many of the rates of duty now too high and which were but slightly reduced by the tariff act of August 5, 1909, and because under it the duties laid more nearly approach a revenue basis without crippling any American industry.
It appears from the census reports of the manufactures of chemicals and allied products in 1910 that the value of the products manufactured by the 11,863 establishments engaged in the business was $1,479,700,000; that the total wages paid was $116,214,000, and salaries $81,037,000, making the total of wages and salaries $197,251,000, or 13.33 per cent of the value of the products. Deducting from the estimated imports given in the report of the Ways and Means Committee for the first twelvemonth period of all the articles covered by H. R. 20182, $96,770,850, the value of the imports that would come in free of duty by reason of the amendments proposed, $8,285,800, would leave imports of the value of $88,485,050, and deducting from the estimated duties upon imports given in the report of the Ways and Means Committee as $16,120,097, the duties which would be collected on the imports which would come in free under the amendments, amounting to $758,393, the duties collected under the schedule as amended would amount to $15,362,304, making an average ad valorem duty of 17.35 per cent, which will more than cover the total labor cost and salaries. It can not be urged, therefore, that the reduction proposed by this bill will cause a reduction of the wages of those employed in these industries.
2. At the hearings before the Finance Committee in the first session of the Sixtysecond Congress upon the act entitled "An act to promote reciprocal trade relations with the Dominion of Canada, and for other purposes," it was claimed by the manufacturers of pulp and paper in the United States that they would be at a great disadvantage in competing with the Canadian manufacturers because of the higher duties which they were compelled to pay upon the chemicals used by them. Under the provisions of this act, which went into effect upon its passage July 26, 1911, wood pulp and paper from Canada, when imported into this country free of any export duty or license fee, are admitted free of duty; and under the favored-nation clause in treaties other nations are now claiming admission of their pulp and paper into the United States free of duty. Already about 70 per cent of our total imports of wood pulp and paper from Canada enters the United States free of duty; and for the period of five months from August 1 to December 31, 1911, these importations, in the case of wood pulp mechanically ground, amounted to $1,327,230, and of chemical pulp, bleached and unbleached, $365,866. Under these conditions our paper manufacturers are entitled to relief, where it can be fairly given, by the reduction of duties upon chemicals extensively used by them, which H. R, 20182 does, as is shown by the following table:
Important chemicals used in paper manufacture and reduction in duty upon the same by
H. R. 20182.
Sulphuric acid, n. sp. I.. 1 cent per pound...
1 and cent per pound, ac
cording to content. Chloride of lime. cent per pound.... Glue size.
25 per cent. Blanc-fixe.
cent per pound.. Chrome colors.
41 cents per pound. Ochery and ochery to 1 cent per pound, acearths.
cording to class. Ultramarine.
3 cents per pound. Vermilion reds, not 41 cents per pound. containing quicksil
Bichromate of..... 2 cents per pound..
8 cents per pound.
4 cents per pound. Soda: Sal.
cent per pound. Ash..
cent per pound. Silicate of.
cent per pound.
I Computed on imports of 1911.
* But not less than 2 cents per pound.
3. The manufacturers of woolen and cotton goods are the largest consumers of chemicals in this country, and in view of the fact that bills effecting large reductions in the duties upon woolen goods are now pending before Congress, which are soon to be followed by a bill reducing the duties upon manufactures of cotton, a reduction in duties upon the chemicals used in the manufacture both of woolen and cotton goods should be made, as such chemicals are largely imported at a price increased by the duties.
The following tables, compiled from reports of the Census Bureau, show the extent of the use of chemicals and dyestuffs in the manufacture of woolen and cotton fabrics
Cost of chemicals and dyestuffs used in all branches of the wool manufacturing industry.
(Compiled from reports of Census Bureau.)
Branch of industry.
Woolen and worsted.
$6,595,000 $7, 457,000
111,000 142,000 9,009,000 10,833,000
13,453,000 Rate under
Summary of principal materials other than fibers used in the manufacture of cotton goods
in the United States, by geographic divisions, 1889, 1899, 1904, and 1909.
The changes in rates of duty made by H. R. 20182 in chemicals and dyestuffs used in the manufacture of woolen goods are shown by the following table:
A large amount of the dyestuffs used in American cotton mills is manufactured in Germany and other foreign countries, and hence the rates of duty on these imports are of prime moment to our cotton manufacturers.
Some of the important chemicals which are included in the large quantity used in the cotton industry and the changes in the duties proposed by H. R. 20182 are presented by the following statement:
Act of 1909.
Equivalent ad valorem.
H. R. 20182.
Equivalent ad valorem.
cent and 2 cents per pound?
cent per pound.
6. 85 25 (
1 Imports of 1911.
? According to specific gravity.
PARAGRAPH 487-ALIZARIN. 4. We fully approve the provisions of H. R. 20182, by which the duties are reduced upon drugs and medicines, as shown by the following table:
1 But not less than 25 per cent.
: According to alcoholic content. The bill is criticized in the report of the committee, because in certain instances the rates of duty are increased upon raw materials, while the rates are decreased upon the products manufactured from these raw materials, and some instances are cited. It will be found, however, upon an examination of these instances that a sufficient margin has been left to cover the manufacturing cost in each case.
BENZOIC ACID AND BENZOATE OF SODA. Benzoic acid is transferred from the free list to the dutiable list, with a duty of 5 cents a pound by H. R. 20182, and the duty on benzoate of soda made from it reduced from 25 per cent to 15 per cent. No benzoate of soda is now imported, because the duty is prohibitive, and as it is used exclusively as a food preservative, which at present is discouraged, no hardship would seem to fall upon its manufacture because of this change in duties, nor would those engaged in it seem to be entitled to the fostering care of the Government under any theory.
PHTHALIC ACID AND PHENOLPHTHALEIN.
In the case of phthalic acid and phenolphthalein the import price of the latter is between $1 and $1.50 per pound, so that even at the lowest price it would pay a duty of 15 cents per pound, against the proposed duty of 5 cents upon the acid. Moreover, in its manufacture over 50 per cent of the raw material used is carbolic acid, which H. R. 20182 places on the free list. The colors made from phthalic acid will pay a duty of 25 per cent under H. R. 20182, which will afford a sufficient manufacturing margin.
ARGOLS OR CRUDE TARTAR AND CREAM TARTAR AND TARTARIC ACID. H. R. 20182 increases the duty on argols or cream tartar from 5 per cent ad valorem to 10 per cent ad valorem, and upon tartaric acid and cream of tartar made from the same the duties are decreased from 5 cents a pound to 3 cents and 24 cents a pound, respectively. Argols or crude tartar, of which we imported 29,269,977 pounds in 1911, at a unit value of about 10 cents a pound, would at the proposed ad valorem duty of 10 per cent, bear a duty of 1 cent per pound, and as cream of tartar, which is made from argols or wine lees by refining, bears a duty of 2 cents per pound, the difference between the duty on the raw material and that on the finished product will about equal the manufacturing cost, as the process of refining is simple and inexpensive, and consists in boiling the argols in water, thereby separating the cream of tartar from impurities, and obtaining crystals of cream of tartar by evaporation. In this process tartaric acid is one of the by-products, and what has been said of the duty on cream of tartar applies to the duty on that. The present duty on both cream of tartar and tartaric acid is practically prohibitive.
COAL-TAR PRODUCTS AND COAL-TAR DYES OR COLORS.
Strong representations were made by several parties to the Ways and Means Committee in 1908–9 as to the advisability of placing a duty upon certain of the primary and intermeditae coal-tar products. It was claimed that this country could now supply these products and would do so with slight protection, and that this would not increase the price to the consumer of the finished product. (See pp. 103-147, Tariff Hearings, Schedule x, 1908–9.)
CAMPHOR, COLLODION, ARTICLES OF COLLODION. While crude camphor is transferred from the free list to the dutiable list with a duty of 3 cents per pound by H. R. 20182, the manufacture of collodion is not affected thereby, because collodion contains no camphor. Camphor, however, does enter into the manufacture of articles of collodion, of which it constitutes about one-third by weight; the other articles used are nitric acid and sulphuric acid and cotton. As ditric acid and cotton are on the free list and sulphuric acid is placed there by this bill, a duty of 35 per cent ad valorem on articles of collodion or celluloid would seem to atford a large manufacturing margin. The average price of crude camphor imported in 1911 was about 30 cents per pound, and at this price the proposed duty of 3 cents per pound would be equivalent to an ad valorem duty of less than 10 per cent.
GUM CHICLE AND CHEWING GUM,
In the case of gum chicle and chewing gum at the hearing before the Finance Committee the manufacturers declared their willingness to pay a duty of 50 per cent ad valorem, which, at the price given in the imports for the last year, would be more than the duty proposed of 20 cents per pound. They wanted, however, the duty put on an ad valorem basis because they admittedly controlled the market and would be able to determine the price. In 1911 we imported 5,368,567 pounds of chicle, practically all of which was converted into chewing gum, and doubling the duty will have little or no effect upon this import and will yield over half a million dollars additional revenue. No chewing gum is imported. The Chicle Trust is certainly no object of justifiable commiseration.
IODINE AND POTASSIUM IODINE AND IODOFORM.
Potassium iodide contains 70.5 per cent iodine; iodoform, 95 per cent. There is therefore a large margin left to cover manufacturing differences. Neither potassium iodide nor iodoform is imported, nor are they likely to be under the reduced duty. The duty on iodoform was originally placed high on account of the alcohol used in its manufacture, and since the introduction of denatured alcohol in 1906 the high duty is no longer necessary.
COCA LEAVES AND COCAINE.
The duty on the leaves is increased from 5 cents per pound to 10 cents per pound, and on cocaine from $1.50 per ounce to $2 per ounce, a duty claimed by manufacturers and dealers to be prohibitive, which, in the case of a dangerous drug like cocaine, will assist in the regulation of its use. If the duty on the manufactured articles is made practically prohibitive, there should be an increased duty upon the leaves.
CITRATE OF LIME AND CITRIC ACID.
In 1910 we manufactured $77,200 worth of citric acid and imported only $9,940 worth, about 11 per cent of our consumption. The duty of 7 cents a pound is clearly prohibitive. The duty of 1 cent a pound upon citrate of lime, which is easily manufactured, is equivalent to about 7 per cent ad valorem, while the duty upon citric acid is over 10 per cent ad valorem.
In replying to the criticism of the majority of the committee that this bill imposes a tax upon articles which can not be profitably produced in this country “without any compensation by way of encouragement of home industries,” we reply that such a tax is a tax every cent of which goes into the Treasury of the Government and which every patriotic citizen will freely pay, knowing that, although a tax upon consumption, it is used for the maintenance of his Government and not to swell the profits of those who use the instrument of taxation for their own personal gains.
J. W. BAILEY.