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PARAGRAPH 679-SPICES. Mr. Gibson. Coffee is not a necessity. I dare say people would be better without it.
Mr. HILL. And better without tea.
Mr. Gibson. And perhaps better without tea. I suppose they are less injurious, probably, than many other things that we do indulge in- I mean coffee and tea. But they would be very proper subjects, I think, for duty, because in a hard stress a family could do without coffee, and they could do without tea, when they are reduced. And so I think of spices. If you look at the history of them, you will find they had the origin of their use in the Sybáritic condition of the people in the south of Italy, and they were identified entirely with voluptuous and extravagant living. While, of course, that has more or less faded away, still they are absolute unnecessaries. No mother gives them to her child; nobody takes to them as a matter of living.
You take salt. I see in one of the papers submitted here it was said they were to be classified as salt. Not at all. Salt is an absolute necessity. You go in the far West and approach the Indians, the first thing they ask you for is salt.
Mr. Hill. It is a luxury to the Indians.
Mr. Gibson. Oh, no; they want it as a necessary, and they feel the need of it.
Mr. Hill. And you want pepper on an egg when you eat it.
Mr. PAYNE. It is in the same class as tea. I suppose you are aware that every other country puts a duty on tea ?
Mr. GIBSON. Yes.
Mr. GIBSON. Yes. I was going to say as to salt, on the other hand, you will find every considerate farmer has it in his field for his cattle. All the bovine animals want it. It is a means used to entrap the deer. In New York they have a law to prevent that way of enticing deer, to be killed. So salt is not in the same category.
The spices are household luxuries, and I think they ought to bear a considerably higher duty than it is proposed to put on them. I thank you for
your attention. The CHAIRMAN. Mr. Gibson, we are very glad to hear from you.
MEMORANDA ON SPICES.
32 NASSAU STREET,
New York, January 4, 1919. To Committee on Ways and Means, House of Representatives:
So long as we are to have duties on imports, for the purpose of raising revenue for the support of the Government and not for protection, there ought to be a duty on spices, unground, that being the condition in which they are imported.
1. The spices particularly referred to are included in paragraph 679 of the free list of the present tariff act, which are imported unground, and which are as follows:
"Par. 679. Cassia, cassia vera, and cassia buds; cinnamon, and chips of; cloves and clove stems; nutmegs, pepper, black or white, and pimento; all the foregoing when unground; ginger root, unground, and not preserved or candied.”
2. On the dutiable list, paragraph 298, are the following:
“Par. 298. Mustard, ground or prepared, in bottles or otherwise, 10 cents per pound; capsicum, or red pepper, or cayenne pepper, 2 cents per pound (whether
PARAGRAPH 679_SPICES. ground or unground); sage, 1 cent per pound; spices, not specially provided for in this section, 3 cents per pound.”
This latter paragraph is somewhat misleading. The ordinary person in reading it would suppose that all the other spices not named in paragraph 298 were dutiable at 3 cents per pound, without regard to their condition, but as all the other spices are specially provided for in paragraph 679 of the free list as exempt from duty when imported in an unground condition, they are all entitled to free entry, unless they should be imported in a ground condition, which is not done, for the reason that there is a high duty on them in this form, and also if im ported ground they would lose their strength, flavor, and fragrance sooner when ground than unground, which, as a rule, is their chief value, and besides, we can do grinding as cheap, or cheaper, in this country than can be done anywhere else in the world.
3. Capsicum, or red pepper, or cayenne pepper unground and unprepared, is made dutiable at 24 cents a pound, because there is a small quantity of it raised and prepared in the State of Louisiana, although there were 5,242,284 pounds imported in 1911, valued at $557,760, and paid a duty of $131,057. Why should red pepper pay a duty and black and white be free? There is also a duty of 1 cent a pound on sage in any condition, as small quantities of it are raised in this country.
So that the duty on spices, so far as there is any duty at all on them in the condition in which they are imported is restricted to these two and such duty is intended to be protective and not for revenue.
4. It will be observed that “all other spices” that are dutiable under paragraph 298, in 1911, only amounted to 33,912 pounds, and in value to $5,204, on which the duty was $1,017.
5. It will be remembered that the tariff bill (H. R. 1438), as it passed the House in 1909, made all these spices dutiable, both those now on the free list and those on the dutiable list, in paragraph 294, in their unground condition, but the whole paragraph (294) of the House bill was stricken out in the Senate and paragraph 297 of the tariff act of 1897 was substituted as an amendment, and all the other spices except the two above mentioned were put on the free list in the unground condition by amendment, the same as they had been in the Dingley Act of 1897 and the McKinley Act of 1890, and the act of 1883. 6. None of these spices are produced in this country, except the two above named. They are all produced in tropical countries, and all the duties collected from them would go into the revenue for the support of the Government.
7. These spices are luxuries. They are not necessaries. No doubt every one would be better off without them. They might properly be put in the same class with wines, liquors, and tobacco for dutiable purposes, as they were some 60 years ago; and, in fact, cloves, cinnamon, and pimento or allspice are used in nearly every drinking saloon in the country. They are used only in small quantities of each. Å well-to-do family would not likely consume more than a few ounces of any one of them during a year. They are, as a rule, purchased by the consumer from the retail grocer by the ounce, and are commonly sold for from 5 to 10 cents an ounce at the rate of 80 cents a pound and upward-from 4 to 10 times their cost, as can be readily ascertained upon inquiry at any retail grocery. There does not seem to be any regular price for them at retail. They are sold without regard to what they cost, and would without doubt be sold at the same price to the consumer if a duty of 5 or 10 cents a pound was put on them. They are in no sense in the same category with galt. This is an absolute necessity. The first thing the Indian asks the white man for is salt. The want of it lures animals to destruction, nevertheless salt is dutiable.
8. These spices were dutiable under all the tariff acts, in their unground condition, from the beginning of the Government down to 1883, when they were put on the free list. In the tariff act of June 30, 1864, they were dutiable in the unground and ground state, as follows:
Under some of the former tariffs the duties were much higher. The tariff act of March 7, 1804, imposed a duty on cinnamon and cloves of 20 cents a pound, nutmegs of 50 cents, and mace of $1.25, and under the tariff act of April 27, 1816, nutmegs paid a duty of 60 cents a pound, cinnamon and cloves of 25 cents, and mace $1. These duties were on these spices unground. Up to the year 1883 the Government received a large revenue from the above-named spices unground. They were regarded as luxuries, and proper subjects for a high duty, until the protective policy dominated the tariff. It had always been the policy of this country from its beginning to pat a high duty on spices for the reason that they were luxuries, and to discourage extravagant living.
9. The following is a statement of the amount of these spices imported in the ground and unground condition, with their value, for the fiscal year ending June 30, 1911, as given by the Bureau of Statistics of the Department of Commerce and Labor:
Rates of duty.
105, 982.00 $11,616.00 None. Cassis and cassia vera.
6,646,787.00 522, 228.00 None. Cinnamon and chips of.
4,088,527.00 533, 152.00 None. Clove stems..
6,431.00 905.00 None. Ginger root, not preserved or candied, Free.
7,363,088.00 582, 161.00 None. pounds. Mace. -pounds. I'ree.
2,392, 251.00 210, 409.00 None. Pepper, black or white.
23, 193, 416.00 1,697,027.00 None. Pimento..
5,659, 208.00 155, 542.00 None. Total spices, unground......do
51, 165, 794. 78 4,008, 559.00 None. Capsicum, or red pepper or cayenne pep 2 cents per pound. 5, 242, 234.92 557,739.65 $131,057.29 per...
..pounds Mustard, ground or prepared, in bottles 10 cents per pound. 1,360,080.00 355,561.00 136, 008.01
or otherwise, pounds. Sage..
-pounds. 1 cent per pound.. 1, 278, 840.38 22,578.61 12,788.41 All other..
3 cents per pound. 33,912. 63 5, 204.81 1,017. 42 Total spices.
7,915, 117.96 941, 104.07 280,871. 13 59,080,912.74 4,949,663.07
There were 63,116,598 pounds imported in 1912, of which only 9,887,243 pounds were dutiable. At 5 cents a pound, these spices would yield á revenue of about $3,155,829.
10. About all of the opposition to these spices being made dutiable in their unground condition would come from the grocers, who charge the consumer from four to ten times what they cost them, and from the grinders and makers of perfumery and fancy soaps. Grinding spices is not worthy the name of manufacture. It was held in the State of New York. for the purposes of taxation, that grinding coffee and glue was not manufacturing. The grinders claim that if the duty on spices was the same, whether ground or unground, there would be considerable quantities imported in the ground state, as there is some loss in weight in grinding. To obviate that there might be a duty of 1 or 2 cents a pound more on the ground than on the unground.
ii. There are oils made from all these spices except pepper and mustard. The oils of cassia, of cinnamon, and mace are on the free list (paragraph 639). The oils of cloves, of pimento or allspice, and of nutmegs are not mentioned in the tariff. These oils are largely used for making perfumery and toilet and fancy soaps, which also are luxuries and ought properly to have a pretty high duty placed on them, at least commensurate with the duty on spices unground. There are als) other oils in the said paragraph 639, such as the aitar of roses, rosemary, bergamot, etc., that are lux. uries and ought to be on the dutiable list.
THE DUTY SHOULD BE SPECIFIED AND BY THE POUND. 12. The duty on these spices has, as a rule, heretofore been assessed by the pound, as that is the unit by which they are bought and sold, and they are dutiable in other countries by weight. If they are made dutiable by an ad valorem rate they will have to be appraised and their value ascertained in that way, and as they come from
tropical countries and are gathered over the country, and many of them are shipped from small ports where there is no regular market price and are bought at various prices, it would be a constant source of annoyance, both to the customs officials and to the importers, to fix a fair and satisfactory value by appraisement, and a specific duty would have the effect of keeping out the inferior qualities of these spices, for if the duty is ad valorem, of course the poor qualities would come in for a less duty than the good spices.
13. Putting a uniform specific duty on these spices would not be unfair, as there is but a small difference in their value, and they are used substantially for the same purposes, and there is very little, if any, difference in the price at which the retail dealers sell them to the consumer.
It is respectfully suggested to the Committee on Ways and Means that the following proposed paragraph be adopted to cover all spices:
"Par. Spices: Cassia vera and cassia buds, cinnamon and chips of, cloves and clove stems, mace, nutmegs, sage, pimento or allspice, all the foregoing unground, five cents per pound, ground, six cents per pound; capsicum or red pepper or cayenne pepper, black or white pepper, and mustard seed, unground, four cents per pound; capsicum or red pepper, or cayenne pepper, black or white pepper, ground or prepared, and paprika, six cents per pound; mustard, ground or prepared in bottles or otherwise, eight cents per pound; ginger root, unground, four cents per pound; ground or preserved or candied, eight cents per pound.” Respectfully submitted.
W. J. GIBSON.
TESTIMONY OF E. W. DURKEE.
The witness was duly sworn by the chairman.
Mr. DURKEE. Mr. Chairman and gentlemen of the committee, subsequent to the hearing on January 20, at which I appeared as one of a committee from the American Spice Trade Association, I filed a further statement with the members of this committee; this statement was made as if in the presence of the committee under oath.
There is not much that I can add to this statement except to repeat that the spice association urges the retention of whole spices on the free list on the ground that they are actual necessities of life at this time and distinctly not luxuries; that on the contrary they contribute to cheaper cost of living by making cheaper foods palatable; that a duty on spices would add to the cost of living, which high cost of living, it has been promised, would be reduced under the new tariff.
That a duty on the landed weight of whole spices by reason of shrinkage, loss in grinding, and in putting up, would be greater than the rate of duty by whatever the percentage of shrinkage and loss may be, and this loss is in some cases considerable, and this would still further add to the price paid by the consumer.
That the price paid by the consumer is not due to excessive profit, but largely to labor cost.
I tried to show as well that while 3 cents per pound would prohibit the importation of some spices in bulk it does not prohibit the importation of all spices even in bulk, and that there is actually some spice in small packages imported under this rate of duty, and that ground mustard even at 10 cents per pound duty shows an average increase in importation.
Under the provisions of the bill as passed last spring spices made dutiable at 1 cent per pound would yield $488,363.42; cloves, at 2 cents per pound, would yield $128,287.26; pimento, at 'three-fourths of a cent per pound, would yield $25,834.99; sage, at one-half cent per pound, would yield $7,590.62; mace, at 8 cents per pound, would
yield $32,268.40; mustard, at 6 cents per pound, would yield $84,003.97; all other, at 20 per cent ad valorem, would yield $2,114.40; total, $768,462.06.
The spices dutiable under the present tariff yielded $318,209.33; the increase under the bill of last spring would be $450,252.73.
This estimate is based on the quantities imported for the year ending June 30, 1912.
Deducting from the amount raised under the provisions of the bill of last spring the cost of collection, the net revenue, would not be great, while the increased cost to the consumer occasioned solely by this duty would be an everyday cause of complaint from every person in the country.
Besides, if there was the same rate of duty as this bill provides on both whole and ground spices, the bill passed last spring would practically destroy the spice-grinding industry in this country and injure all classes of labor employed in this industry, and the only increased revenue derived under this bill would be an increase in duties of $450,000. Is it worth while to do this for such a sum?
If the policy of this committee is not to impose prohibitive duties, the spice trade would prefer free whole spices—their raw materialand a lessened duty on ground spices.
The duties on spices by bill passed last spring would be as follows:
Increase under rates, Schedule A..
450, 252. 73