The CHAIRMAN. Have you figured, if we raise this duty, how much we have got to raise the duty on these other articles? Mr. NEILSON. What we want is a little additional duty to help justify us. The CHAIRMAN. It is a dollar a ton now. How much do you want? Mr. NEILSON. If the duty was made $2 a ton as a minimum we would have a better chance to go forward. The CHAIRMAN. You want a double duty? Mr. NEILSON. Yes. The CHAIRMAN. And still you are able to produce 50,000 tons a year as against 16,000 tons imported? Mr. NEILSON. Yes. Mr. Pou. What is it worth at the mine? Mr. NEILSON. Our average price has been in the neighborhood of $5 a ton, at a cost of slightly over $4 a ton. The CHAIRMAN. Of course the manufacture of aluminum is increasing very rapidly in this country all the time, is it not? Mr. NEILSON. Yes, sir. I might say in this connection that our ore reserves have very little to do with the production of aluminum. Our ore goes chiefly into alum and these abrasive materials, and we are trying to build up the refractory now. When the dollar duty was put into effect we managed to go ahead, because in those days the mines were very near the top of the ground and we could get labor for 90 cents. Since then we have had a big change in the cost of labor. Now we are paying nearly $1.50 for common labor, the cost of which used to be 90 cents; and in addition to that our mines are going very much deeper. Mr. GRIGGS. You can not mine this material as coal is mined? Mr. GRIGGS. You have to uncover and then go down? Mr. NEILSON. Yes, sir. We have reached a point where the profits are very small and the risk is increasingly large each year, and it does seen to be a very disproportionate proposition. There are today only three companies and one individual in the United States mining bauxite. There have been in the course of the business seven or eight other concerns, which have dropped out, we assume, because they have found it unprofitable. We have had some bad years ourselves, when we came up on the wrong side of the ledger. Mr. RANDELL. What do you mean by trying to develop the refractory business? Mr. NEILSON. We are trying to make a kind of fire brick with it as a base. Mr. DALZELL. Does not this bauxite prevail in other places besides Georgia and Alabama and Arkansas, but not in such large quantities? Mr. NEILSON. There are little deposits of it scattered throughout the country, but they are all of inferior grades. Mr. GRIGGS. Is there any in New York? The CHAIRMAN. No: it is in Arkansas and Georgia. If there is nothing further, that is all. We will now hear John Richardson, of Boston, Mass. Mr. GRIGGS. I do not think he has finished. Mr. Chairman. I hope you will not ask him any more questions until he quits reading his statement. [Laughter.] 61318-TARIFF-No. 13-08-8 The CHAIRMAN. That would be a valid criticism if I had thought he had quit reading. You may proceed, Mr. Neilson. Mr. NEILSON. One competitor is the French bauxite, which runs almost on top of the ground, and is found in almost limitless quantities. They get labor over there for 60 cents a day and can load the material on their vessels at a very low figure. Their freight rates from Marseille to New York are approximately from $1.50 to $2 a ton. Our freight rate from the mines to the eastern market is $4 or $5 a ton. And there is a third important fact bearing on this question, namely, that the French ores have about 10 per cent more of alumina in them than the American ores, the American ores having about 30 per cent of water and 60 per cent of alumina, while the French ore has only 20 per cent of water and 70 per cent of alumina. My proposition was that the business was a very dangerous one to run the business at a profit on a $5 basis. That $5 basis is a point we have been unable to pass on account of the French ore imported to this country, and considering the uses to which the product has been put and the experiments which have been tried and which failed in the development of this industry, we are anxious to have a little encouragement to carry on the work. In due time we desire to submit a report which will bring up most of these questions and try to show them in a clear light. Mr. RANDELL. Where are the deposits of fire clay? Where do you use those deposits? Mr. NEILSON. In Arkansas. I trust that the briefness of this interval will not react against the importance of the subject. It is very important to us, but in view of the brief that I will submit, I will not detain you any longer unless there are some questions that will come up. Mr. GRIGGS. You have given us a very nice talk. [Laughter.] The CHAIRMAN. The next is kaolin. On that Mr. Richardson desires to be heard. STATEMENT OF MR. JOHN RICHARDSON, REPRESENTING THE JOHN RICHARDSON COMPANY, OF BOSTON, MASS. Mr. RICHARDSON. Mr. Chairman and gentlemen, I represent my company and also S. T. Warren & Co., paper manufacturers. It is partly at their request that I appear here to-day. The reasons why china clay or kaolin should be put on the free list are, first, there is no substitute produced in the United States that can take the place of English china clay in the better class of book and coated papers; second, at least 80 per cent of all the china clay imported into the United States is used for those purposes; third, the specific duty on this article is $2.50 per ton, 2,240 pounds, or approximately 371⁄2 to 50 per cent of the entire value of the article in bulk f. o. b. The shipping seaboard point is Cornwall, England. Its average value at our seaboard, as per your Bureau of Statistics, June 30, 1906, to June 30, 1907, is $6.77. This includes the cost of package, about $2 per ton. The only deduction is that the American paper manufacturer pays 37 to 50 per cent duty on a raw material. Fourth, as a proof of this position, I have filed with my brief, already handed in, a table taken from the Bureau of Statistics at Washington, from 1871 to 1907, both inclusive, showing an increase in arrivals from 13,081 tons in 1871, of the average value of $9.80, to 211,467 tons in 1907, of the average value of $6.77. Our manufacturers of the better grade of papers had to have this clay, no matter what it cost. There is no substitute. The CHAIRMAN. The figures show an importation of 211,467 tons, of the value of $1,432,342, on which the duties collected were $526,668.15, which makes the ad valorem duty 36.91 per cent. Mr. RICHARDSON. Yes; that is right. I will tell you where the discrepancy is. I presume the Government makes its figures from the invoices submitted at the custom-houses at the various ports. In my own case up to the latter part of December the cost of the cask was included in the invoice. The CHAIRMAN. You contend that the invoice of the importers was an overvaluation? Mr. RICHARDSON. No, sir. There is a specific valuation on the clay, but there is no duty on the casks. The CHAIRMAN. In order to make it, there must have been an overvaluation at the custom-houses? Mr. RICHARDSON. No, sir. You do not understand it. The CHAIRMAN. Go ahead, then. Mr. RICHARDSON. Well, all I have to say, whether it is 37 per cent or 50 per cent, it is a raw material which the paper makers need and have got to have. In those two classes of paper there is no competitor with this product. The CHAIRMAN. How much do you say is produced in this country? Mr. RICHARDSON. Of this particular kind of clay, none. Mr. GRIGGS. Kaolin? Mr. RICHARDSON. Not that particular kind of clay that is used for this purpose. Mr. GRIGGS. You misunderstood the question. He asked you how much of this was produced in this country. Mr. RICHARDSON. Of this kind, none. It is china or kaolin clay. There is a kind of china clay, so called, produced in this country, but it can not be used by the paper makers. The CHAIRMAN. Our notes say here: "The chief producing States are Pennsylvania, Delaware, North Carolina, and South Carolina. The North Carolina kaolin is the best known and most widely used." Mr. RICHARDSON. That is used in the medium grades of paper, but in the better classes of papers 80 per cent of this particular kind is used. They can not use the other kind of clay in the high-grade papers. They can not use the low-grade clays in the high-grade papers. The CHAIRMAN. Therefore you want the duty taken off from all kaolin? Mr. RICHARDSON. Yes, sir. Mr. GAINES. Would there be any way of distinguishing between the lower grade and the higher grade, which you say is not produced in this country? Mr. RICHARDSON. Yes, sir. Mr. GAINES. It might be well to make a suggestion of such distinction. Mr. GRIGGS. Would it not be true that if the duty was taken off, even as Mr. Gaines suggests, by making a differentiation of the dif ferent grades would it not be true that you would use all of this clay? Mr. RICHARDSON. No. The $2.50 duty which first comes off the price of English clay would not shut off the use of American clay. Mr. GRIGGS. You would use American clay for this purpose? Mr. RICHARDSON. Oh, yes; just the same as heretofore, in news paper and wall paper-just the same. Mr. DALZELL. This $2.50 does not protect anything? Mr. RICHARDSON. No, sir. I have the statement of S. T. Warren & Co. to that effect. Mr. DALZELL. It does not protect anything, and it brings in to the Government a revenue of $526,000 a year? Mr. RICHARDSON. Yes, sir; just exactly. Mr. GRIGGS. What about the labor that is employed in those mines? The labor is entitled to protection, is it not? Mr. RICHARDSON. Yes. The CHAIRMAN. Do I understand you do not produce any clay of that kind in this country-any china clay or kaolin? Mr. RICHARDSON. What is produced here is called kaolin. It is a low grade of clay. It is used largely by the manufacturers of the low-grade papers. The CHAIRMAN. It is not used in the high-grade papers? Mr. RICHARDSON. No; not in the high-grade papers. The CHAIRMAN. But it is used in the low-grade papers? Mr. RICHARDSON. Yes. The CHAIRMAN. And also in the low-grade pottery? Mr. RICHARDSON. Very little that I know of. I do not know about the pottery business, but I do know about the low-grade paper business. I am talking about the paper business. Mr. GRIGGS. Now, let me understand one thing. What would be the cost of laying down a ton of kaolin from either the Carolinas or Georgia or Delaware, and the cost of laying down a ton of kaolin from England, at the seaport? If the duty were taken off, what would be the difference in cost, or would there be any? Mr. RICHARDSON. It would be very slight. Mr. GRIGGS. SO slight that everybody would use the English kaolin? Mr. RICHARDSON. No, no. It would be slight, but they would still use the southern clay. Mr. CLARK. If we took this tariff off, would it make paper cheaper to the man who buys paper? Mr. RICHARDSON. I should think the paper manufacturer would thus be enabled to make the paper cheaper, and the cheaper he would make it the cheaper he would sell it. Mr. CLARK. Would they put the price of the paper down to the newspaper man, and so forth? Mr. RICHARDSON. Well, I think, on general principles, that the lower the paper manufacturer can get his raw material the lower price he will make. Mr. CLARK. That ought to be the case, but would that be the case? Mr. RICHARDSON. I am representing them. Mr. CLARK. You do not know anything about it then as a matter of fact? Mr. RICHARDSON. When you ask whether the man who makes paper will lower the price as much if he gets $2.50 a ton duty, I can not tell you. Mr. CLARK. But that is exactly what I want to know. If somebody is going to absorb the difference, after it is put on the free list, between you and the consumer, then I do not see that anybody gets any benefit out of it excepting you. Mr. RICHARDSON. I say that the paper manufacturer would be very likely to give the consumer the benefit of the $2.50 a ton if he gets his clay cheaper. Mr. CLARK. I would like to have somebody give a bond as to the benefit. Mr. GRIGGS. Can you make a calculation as to what that difference would be? Mr. RICHARDSON. Two dollars and fifty cents a ton-I can make a calculation. I happen to know that the clay costs one-half a cent a pound in paper, but that is only the clay that goes into the paper. Of course, they do not make the paper all of clay, but I wish they did. Mr. CLARK. As a matter of fact, kaolin is used more to adulterate candy than any other purpose, isn't it? Mr. RICHARDSON. I have imported about a half a million tons of that article, and I never sold one pound for that purpose, or heard of anybody else doing it. Mr. CLARK. I am not asking you what you do, but I am asking you about what kaolin is used for. I have understood that it was used to such an extent that it was undermining the health of the children of the country, and that a great many cities passed laws making its use a criminal offense. Mr. COCKRAN. Now, Mr. Richardson, please state precisely what you want? Mr. RICHARDSON. I want the duty taken off kaolin. Mr. RICHARDSON. For kaolin that comes in from England. Mr. RICHARDSON. Yes, sir. Mr. COCKRAN. Could it be so described that it could be identified in the custom-houses? Mr. RICHARDSON. Very easily. Mr. COCKRAN. Just suggest how it could be done, and then we will have a definite proposition before us to consider. You are asking for the total abolition of this duty; and is the abolition of duty on one particular kind of clay? Mr. RICHARDSON. Do you want me to tell you, so that the customhouse can distinguish it? Mr. COCKRAN. You do not want to have this put upon the free list, as I understand it, excepting so far as one particular kind is concerned? Mr. RICHARDSON. I want all English china clay put on the free list. Mr. COCKRAN. That is a particular kind? Mr. RICHARDSON. Yes, sir. Mr. COCKRAN. Is not the English kaolin a particular kind? |