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Mr. DORIAN. That is right.

Mr. Hill. I want to call your attention to the fact that the dutiable imports of Schedule A were $48,869,368 in 1912. Under this bill the dutiable imports are $96,742,850. Under the Payne bill the free imports under Schedule A were $68,223,287; under this bill, $26,178,943.

Do you consider that the general policy illustrated by this change, not only affecting you, but a large number of other industries not as well able to stand it as you can, by which the raw materials are taxed and the whole tax added to the cost of noncompetitive products is a helpful one to the American nation as a whole ?

Mr. DORIAN. I consider it a mistake, and, I might almost say, a blunder, because, as I stated a few minutes ago, it is discriminating in favor of the foreign and against the American manufacturer. I say that with all sincerity, too.

Mr. PAYNE. That is the kind of revision upward you do not like?

Mr. DORIAN. I am speaking now more as a citizen than as a representative of my company.

Mr. James. Do you recognize any difference between a raw material that is a luxury and a raw material that enters into the manufacture of a necessity ?

Mr. HARRISON. That he has said was a necessity.

Mr. James. You may think a phonograph is a necessity, but meat and bread are necessities down in our place.

Mr. DORIAN. I can of course understand that the gentlemen of the committee become tired and worn after listening to us talk all day, and they must have their little jokes. I mentioned poker chips simply to show that these materials, these products, are used in a number of different trades and industries. I do not know anything at all about the manufacture of poker chips.

Mr. James. But the question I ask you—you answered a question here along a general proposition, at considerable length, as to what the policy of the Government ought to be about the importation

Mr. DORIAN (interposing). I only gave my views.

Mr. JAMES (continuing). About the importation of raw materials, and I asked you whether or not you make any distinction between a raw material that is used in a luxury and a raw material that is used in a necessity-whether or not you would allow a tariff upon neither of them or upon both of them alike.

Mr. DORIAN. I do not just get your idea, but I think you mean-
Mr. James. How?

Mr. Dorian. I perhaps do not quite get you, but I think you mean that a talking machine is regarded as a luxury.

Mr. JAMES. Certainly, I mean that.

Mr. Dorian. The shellac and copal gum which enters into the manufacture of that talking machine record is not a luxury.

Mr. James. I know, but he asked you that broad question about the importation of raw materials, as to what ought to be the policy, to have all of them admitted free, and you answered that it was, or should be, and then I asked you whether you would make any distinction in allowing a tariff upon a luxury or upon a necessity, where it is a raw material.


Mr. DORIAN. If you import wine, that is a luxury, that is something that is quite different. I would go as far as any member of this committee in imposing a tax upon a raw material of that kind.

Mr. Hill. The greater part of this schedule is a raw material schedule ?

Mr. DORIAN. I do not know about the rest of the schedule.
Mr. HILL. These gums are all raw materials ?
Mr. DORIAN. These gums are raw materials.

Mr. Hill. I will state this, that in the Payne bill the ad valorem of that whole schedule, according to this classification, was 10.7 per cent; the ad valorem on this schedule, according to this classification, is 13.1 per cent. Is it a wise policy, in your judgment, for the benefit of all manufacturers that are using these things, to increase this schedule between 2 and 3 per cent ad valorem ?

Mr. DORIAN. I do not think so, sir, and I say that as a business man.

The CHAIRMAN. All right, Mr. Dorian, unless you have something else to say you will be excused. The following letter was also filed by the witness:

WASHINGTON, D. C., January 7, 1913. Hon. Oscar W. UNDERWOOD,

Chairman Committee on Ways and Means, House of Representatives. SIR: I appeared before your honorable committee on the 6th instant to recommend on behalf of the American Graphophone Co. the retention on the “free list " of shellac and copal gums.

In the course of the hearing a number of inquiries were addressed to me by members of the committee as to the capitalization and profits of the company which I thought the committee was not entitled to make and I declined to furnish some of the particulars asked for.

I find that a misleading summary of my statements has appeared in a Washington newspaper, and I therefore request permission to file the following statement.

The authorized capital stock of the company is, as I stated yesterday, $10,000,000. Of this authorized capital stock, however, but $4,723,180 has been issued, viz: Common...

$2,627, 550 Preferred.

2,095, 630

4,723, 180 The company has paid dividends of 7 per cent—as I stated-but on its preferred stock only. Instead, therefore, of paying dividends on its $10,000,000 of authorized capital it has paid on $2,095,630 only, or $146,694.10 per annum instead of $700,000 as published. The bonded indebtedness of the company is about $1,350,000. The newspaper summary referred to quotes me as declining to state, in answer to an inquiry of Representative Kitchin, how much of the capital was paid in. I did not so decline. I at first failed to grasp the purport of his inquiry, but, when I did, stated that all of the capital issued was paid in. Yours, respectfully,




DECEMBER 31, 1912. Hon. Oscar W. UNDERWOOD, Chairman Committee on Ways and Means,

House of Representatives, Washington, D. C. Sir: We, the representatives of the National Varnish Manufacturers' Association, comprising over 80 per cent of the varnish industry in the United States, do respectfully protest against the imposition of any duty on the following raw materials which


enter into the manufacture of varnishes, and which articles are of foreign origin only, and not any of them found or produced in this country: Gum copal (act of 1909, par. 488; H. R. 20182, par. 37); gum kauri and damar (act of 1909, pars. 488 and 559; H. R. 20182, par. 37); gum shellac (act of 1909, par. 605; H. R. 20182, par. 37); soya bean oil (act of 1909, par. 639; H. R. 20182, par. 50); Chinese nut oil (act of 1909, par. 639; H. R. 20182, par. 50).


[Gum copal (act of 1909, par. 488, free); gum kauri (act of 1909, par. 488, free).) These gums are found in various parts of the globe, but none in the United States. They are brought to this country in their natural state as they are mined or dug from the earth. They are of a fossil nature, and it is supposed they were originally exudations from trees which have, to a very large extent, disappeared; the age of these gums being uncertain.

It is pretty safe to assume that nature is at the present time producing only a limited quantity, and in the course of a few years the present fields will become entirely exhausted. This fact is strongly indicated by the deterioration of the quality and the continued advance in price.

The importation of these gums is comparatively small and every year grows less.

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1 The decrease in value in kauri does not represent a decline in the market price, but is due to a larger importation of the lower grades.

Prior to the years mentioned the statistics obtainable included all imported varnish gums and did not classify them separately.

(Gum damar (act of 1909, par. 488, free).] Batavia gum damar differs from gum copal and kauri inasmuch as it is not a fossil gum, but is a hardened exudation taken from the trees grown in the Dutch East Indies. There is another damar gum known as Singapore, which exudes from the trees and is found in the ground partly fossilized.




Average price per pound.

Variation in price per pound.

Year ending Dec. 31

1910. 1911.

4,018, 601

$35, 765
44, 145




5 to 15


(Gum shellac (act of 1909, par. 559, free).)

Gum shellac is found in India. It is an exudation from the branches of a tree. Small insects affix themselves to twigs, puncturing the bark and sucking the sap, which they give out again as an excretion. This solidifies on contact with the air, gradually forming a deposit.


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This oil is expressed from the soya bean, which is found principally in Manchuria, northern China. The bean grows on small bushes. The beans are edible and also the cake aiter the oil is expressed, but not the oil itself.

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This is known by several names: Chinese nut oil, China wood oil, tung oil. The Department of Agriculture mentions this oil as that expressed from nuts of the Aleurites fordii tree. This tree grows wild in central China in Provinces bordering on the Yangtze River.


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All of these articles briefly described have been for years imported free of duty.

In the chemical schedule (H. R. 20182), which passed the House of Representatives in February, 1911, they were removed from the free list and placed on the dutiable list as follows: Gum copal (par. 37), one-half cent per pound; gum kauri and damar (par. 37), 1 cent per pound; gum shellac (par. 37), 1} cents per pound; soyabean oil (par. 50), one-fourth cent per pound; Chinese nut oil (par. 50), 5 cents per gallon.

78959°-VOL 6-13- 4




1. From the point of view of the domestic manufacturers, it would seem that they are entitled to the admission into this country without payment of duty, the said gums copal, kauri, damar, and shellac, which are not products of this country and which are an absolute necessity in the manufacture of varnishes.

2. The Government of the colony of New Zealand, from which gum kauri comes, has had it in mind for some years back to place an export duty on this gum. In fact, such a bill passed the New Zealand Parliament in recent years, but was not made effective because of the panic of 1907. We can not help feeling that an attempt on the part of the United States Government to tax such an important product of New Zealand as gum kauri will result in the application of the export duty by the New Zealand Government that will work still further hardship to the American manufacturer.

3. As already stated, the supply of gums copal and kauri is gradually growing less and the quality poorer with advancing prices; therefore the domestic manufacturers should not be burdened with a duty which would increase the cost of the finished products.


1. The domestic manufacturer believes he is entitled to admission into this country without payment of duty Chinese nut oil (oil expressed from the nut of the Aleurites fordii) which is not a product of this country and which is an absolute necessity to the manufacturers of varnish.

2. Chinese nut oil has materially increased the use of rosin produced in our Southern States, for certain grades of varnishes are manufactured by combining this oil with rosin and still others by combining this oil with rosin and certain grades of gums copal and kauri.

3. Chinese nut oil possesses peculiar properties which are most desirable in the manufacture of varnish in this country, and these properties can not be found in anything else of which the varnish manufacturers have any knowledge.

4. Chinese nut oil more than any other raw material has made it possible to produce a satisfactory varnish at a moderate price, thereby benefiting the public at large.

5. The varnish manufacturers have been enabled to develop many products for sanitary, waterproofing, and other purposes by the use of Chinese nut oil.



To impose a duty on the above-mentioned raw materials will put the American manufacturers of varnish at a decided disadvantage in competition, particularly with the English manufacturer for the following reasons:

First. There are no duties on these raw materials in England.

Second. Linseed oil is lower in price in England than it is in this country. (See exhibit attached.)

Third. Tin cans also are lower in cost.

Fourth. The rate of freight from the primary markets to England on the above gums and oils is lower. Most of these raw materials for American consumption have to be shipped via England and European ports in the absence of direct shipping facilities.

Fifth. The cost of labor in England is decidedly lower than in this country. To illustrate the difference for the same class of work in England and the United States, a varnish tester in England makes an average salary of £2 per week (about $10 United States gold). The same class of labor in this country would commard at least $25 per week. For ordinary labor where we are obliged to pay $12 per week, the same class of labor can be obtained in England for £1 68. (about $6.50). The same relative difference maintains in all classes of labor employed in the varnish industry.

Sixth. It is a well-known fact that reits and ovirhead charges are also comparatively lower in England than they are in this country.

Seventh. All of these advantages will enable the English manufacturers to undersell the varnish manufacturers in this country in spite of the 25 per cent duty on

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