Hon. FRANCIS E WARREN, 708 SEVENTEENTH STREET, Denver, Colo., February 19, 1909. United States Senate, Washington, D. C. DEAR SIR: Our company are the owners of a chrome iron mining proposition on Deer Creek in the western portion of Converse County, about 18 miles from Glenn Rock, Wyo. We find that we are unable to ship these ores in competition with foreign ores brought in empty ship bottoms as ballast. We have the only known deposit of any magnitude in the United States. The various engineers we have had inspect the property estimate the ore in sight at from 750,000 to 1,000,000 tons. In case of a war with any other country, the supply would be shut off entirely from this country and it would be invaluable to have this mine developed and ready to take care of the large' demand that would necessarily follow. The chrome ore is used in all armor plate, the manufacture of all arms including the cannon; also all tools. Chromic acid taken from these ores is the foundation for tanning, for making bichromate of potash, which is used in all telegraph and telephone batteries-in fact is necessary for the Western Union Telegraph and Postal Telegraph companies. The chromic acid is also used in staying colors in all dyestuffs in woolen, silk, and cotton goods to make the colors fast. It is used in the rims of car wheels for wiring surface over the paper centers. So you can see that it is a very necessary and very valuable product. The ores run from $10 to $20 per ton in value. At the present time it is coming into this country as ordinary iron ore, which is worth not to exceed $2.50 or $3 per ton, and has a duty of 40 cents, I am told. There were about 80,000 tons imported into this country, quite a large amount from Japan, about 12,000 tons from Asia Minor or Greece, about 8,000 tons from upper Canada, near Quebec, and the entire United States product was 107 tons. The freight rate in ship bottoms from Greece to Chester, Pa., the ore unloaded on the wharf, is $2.88 per ton. Our freight rate to Pittsburg is about $7 per ton at the present time. We are told by the railroads that they will lower that rate some to us if we can arrange to get the ore into Cleveland and Pittsburg by getting an adequate tariff on the ores, so that it will be possible for us to ship there in large volume. This is developing the resources of Wyoming, and will make a large business there if we can manage this tariff proposition. You have always taken such an interest in everything that developed the State that I write you to ask if you will interest yourself in this matter; take it up with Clark, Mondell, and our Colorado Members, who I am sure will do anything they could for us and to assist you in this matter; There should be a rate of not less than $4 per ton tariff. You can see that in case of any foreign war it would be simply invaluable, as everything necessary in war requires this material. I appreciate the fact that there will be quite a fight from the shipping interests who bring this over as ballast, and possibly from the steel people and the large users of this ore, as they would think it would raise the price some of the raw material. One of the largest uses of this ore, which is very refractory, is for linings of open hearths and blast furnaces, as it withstands a very high degree of heat, and they must have it. As the matter stands now, we can not ship any of the ore east of Chicago and make a cent profit, as they can get it from Greece or Japan cheaper than we can lay it down in Pittsburg. I will appreciate your thoughtful interest in this matter, and a letter stating thoroughly your views, at your convenience, as to what might be done in the way of a protective tariff. Very truly, yours, CHROMIUM MINES COMPANY, PIG IRON. [Paragraph 122.] SWORN STATEMENT OF B. F. FACKENTHAL, JR., PRESIDENT AND GENERAL MANAGER OF THE THOMAS IRON COMPANY, EASTON, PA., RELATIVE TO PIG IRON. COMMITTEE ON WAYS AND MEANS, EASTON, PA., January 14, 1909. Washington, D. C. GENTLEMEN: The Thomas Iron Company was organized in 1854, and has manufactured merchant pig iron continuously down to the present time, a period of fifty-four years. It does not manufacture any other iron or steel product. The company is doubtless the oldest in America manufacturing merchant pig iron. It has never been reorganized nor had its corporate name changed. It passed successfully through the panics of 1857, 1873, 1893, and 1908, and through several anthracite coal strikes. On at least two occasions during anthracite coal strikes it was compelled to blow out or bank all its furnaces but one. It also passed successfully through the period of the civil war. At the present time the company has nine stacks, four of which are in blast. From the time of its organization in 1854 it has produced from its own mines, or from mines controlled directly or indirectly by it, over 50 per cent of its iron-ore requirements. Many of its mining operations proved unprofitable, but others were profitable, particularly the Richard magnetic iron-ore mine, located near Dover, N. J., which has been the most profitable of all its mining operations. Twenty-four per cent of all the ore smelted by the company during the fifty-four years it has been in business has been taken from that mine. The company has doubtless been as successful as any of its competitors manufacturing merchant pig iron in the East. The returns to its stockholders, however, have never been abnormal. At times dividends were quite small; at other times they were passed altogether; but taken as a whole, the investment has been fairly profitable. During my administration as president and general manager, covering the past sixteen years (1893 to 1908, both inclusive), the capital of $2,500,000 has remained exactly the same, and over that period of time the dividends have averaged 63 per cent per annum. The stock of the company is not listed, nor has it ever been used for speculative purposes, but is held largely by descendants of people who established the company fifty-four years ago. At present there are 590 stock 75941-H. Doc. 1505, 60-2-vol 8- -11 holders, of whom 248 are women. Some of the employees are children and grandchildren of the original men who aided in building the first furnace in 1854. The Thomas Iron Company's cost of manufacturing basic and foundry pig iron for the year 1907, from figures taken from the books of the company, amounted to $18.28. This cost includes fuel, ores, limestone, labor, salaries, laboratories, taxes, and other items entering into the cost, as well as 14 cents for maintaining our New York and Philadelphia sales offices, and 17 cents the actual cost of relining and repairing the furnaces during that year. The charge for relining, however, for that year, is 6 cents below the average cost, which has been 23 cents per ton. In addition to the above cost, there has been expended for replacements an average of 37 cents per ton on all iron manufactured during the past sixteen years, making the total cost of operation, including replacements, $18.65 per ton. The iron ore has been charged at its cost, without adding royalties or profits of any kind. We have no bonded indebtedness, and therefore no interest item has entered into this cost. The item of 37 cents for replacements does not cover an extension of the works or additional furnaces; in fact, there were eleven stacks in 1893, two of which were abandoned; and, moreover, 90 per cent of the amount for replacements was expended on two of the remaining nine stacks. Our sales over the entire year 1907 averaged $19.75 f. o. b. cars at furnace, leaving a profit on pig iron of $1.10 over and above the cost as herein stated. It is a fact, however, that during the year under review, pig iron sold at times at higher prices, but the average price received by the Thomas Iron Company, as shown on the books of the company, was $19.75 per ton. I am informed that the importations of foundry pig iron during 1907 amounted to about 500,000 tons, but am not informed as to the price at which it was sold. I am, however, personally interested in a foundry company, to whose figures I have access, and learn that it purchased 8,535 tons of English iron during 1907, at an average cost of $21.20 delivered at its foundry, where the freights from tide were 80 cents per ton. Over the same period of time our price delivered to that foundry was $22.50 per ton, or $1.30 above the price at which it purchased foreign iron. I am also reliably informed that one of the largest manufacturers of cast-iron water pipe in the North, whose works are located on water front, used imported English iron almost exclusively during 1907, claiming that the price was much lower than that at which they could buy from merchant furnaces in this country. The year 1908 was a panic year, and is not herein referred to, particularly as merchant pig iron has been sold by eastern furnaces without profit. I am more or less familiar with costs at other plants in the Lehigh and Schuylkill valleys, and, moreover, have obtained some figures of cost from some of the best plants in these districts, which, together with conditions at the Thomas Iron Company's plant, enable me to say that the cost of manufacturing foundry pig-iron in eastern Pennsylvania at the present time is $16.25, based on present prices for fuel and labor, and on the 1908 price for Lake ore; and, in other respects, on the same basis as the figures for 1907 contained herein. Furnaces running on basic pig iron suitable for open-hearth steel should manufacture iron at 75 cents less than the cost for foundry iron; in fact, the Thomas Iron Company's furnaces show about that difference between the two grades, making the cost at the present time of basic $15.50 per ton. Any further advance in the selling price of iron is sure to entail an increase in the cost of manufacture, including an advance in labor at our mines, quarries, and works. During 1906 all wages were advanced 10 per cent; during 1907 an additional advance of 10 per cent was made; during 1908 a reduction of 10 per cent was made. If a revision of the tariff does not handicap us in getting our business back on a paying basis, the wages of 1907 must be restored, and will add directly to the above estimated cost. If the tariff duty on pig iron is removed or reduced, I feel confident that it will eventually compel all manufacturers of merchant pig iron in the East to go into liquidation. B. F. FACKENTHAL, Jr. STATE OF PENNSYLVANIA, County of Northampton, ss: B. F. Fackenthal, jr., being duly sworn, according to law, deposes and says that the facts set forth in the foregoing statement, so far as stated from his own knowledge, are true; and, so far as stated upon information received from others, he verily believes them to be true. B. F. FACKENTHAL, Jr. Sworn and subscribed before me January 14, 1909. [SEAL.] CHAS. B. BRUNNER, Notary Public for Pennsylvania. (Commission expires March 16, 1911.) CHARLES H. ZEHNDER, NEW YORK, FILES AFFIDAVIT SHOWING COST OF PRODUCING PIG IRON IN VIRGINIA. Hon. SERENO E. PAYNE, 140 CEDAR STREET, NEW YORK, Chairman Ways and Means Committee, January 21, 1909. House of Representatives, Washington, D. C. MY DEAR SIR: I inclose you herewith an affidavit relating to the cost of producing pig iron and other data for the State of Virginia, which I would like to file with the committee. Yours, truly, STATE OF NEW YORK, county of New York, ss: C. H. ZEHNDER. Charles H. Zehnder, being duly sworn, deposes and says that he has been personally engaged in the manufacture of pig iron in the State of Virginia for more than six years up to about one year ago, and since that time has kept in close touch with the business on account of the large financial interests in mineral property that he still holds in the States of Virginia and West Virginia dependent on the prosperity of the pig-iron business. Affiant further says that during the last five or six years the average cost of manufacturing pig iron in the State of Virginia from native ores of the highest character, including proper charges for depreciation, insurance, etc., has been about $14.50 per ton. There was produced in Virginia during the year 1908, 314,009 tons of pig iron. The actual producing capacity of the State is about 600,000 tons. This pig iron is largely marketed in the East and West. The actual consumption in the State is very small. Any reduction in the tariff from the present schedule would work a serious hardship, and a severe cut would almost ruin the industry in the State. The ores are lean and getting more expensive to produce every year, as there is but one very large body of ore that has been developed in Virginia that lies in a compact body. Practically all the other bodies of ore are thin and scattered over wide territory. CHARLES H. ZEHNDER. Sworn and subscribed to before me this 22d day of January, 1909. [SEAL.] LUDWIG R. MILLER, Notary Public. HON. IRVING P. WANGER, M. C., SUBMITS ESTIMATE FOR MAKING PIG IRON COMPILED BY RICHARD HECKSCHER & SONS COMPANY, SWEDELAND, PA. WASHINGTON, D. C., January 30, 1909. COMMITTEE ON WAYS AND MEANS, House of Representatives, Washington, D. C. GENTLEMEN: Herewith find a statement of the estimated cost of making pig iron for the next six months at the furnaces of the Richard Heckscher & Sons Company, Swedeland, Pa. (offices in the Manhattan Building, southeast corner Fourth and Walnut streets, Philadelphia, Pa.), sworn to by Mr. Herbert W. Gwyn, secretary, which I trust will have your best consideration. Yours, very respectfully, IRVING P. WANGER, M. C., Eighth District, Pennsylvania. PHILADELPHIA, PA., January 27, 1909. A fair estimate of the cost of making pig iron for the next six months, based upon 1908 prices for Lake Superior ores and a varying percentage of local and foreign ores, is as follows: FOUNDRY IRON. Estimated cost, based on using 50 per cent of lake ores at season 1908 prices: Ore, cost per ton of pig iron... Coke, a 2,600 pounds, at $3.90 per net ton delivered.. Limestone, 1,344 pounds, at 80 cents per gross ton.. Labor and miscellaneous charges... $8.49 5.07 .48 1.45 .18 15 15 15. 97 a This is estimated fuel on all grades of foundry iron; as we manufacture the higher grades almost entirely, a fair average of fuel consumption for such grades would be about 2,700 pounds per ton of iron, which would increase the estimated cost of iron by 29 cents per ton, making the total $16.26. |