year 1896. Italy, producing on the average wines of lower strength than Spain and Portugal, the importations from which latter countries are chiefly represented by naturally strong or fortified wines, would in the aggregate be at a disadvantage as to the percentage below 14, which would be higher if its importations were considered separately.

Finally, in support of our contention that the official figures for fiscal year 1907 as relating to the amounts of wine, respectively, imported under and above 14 per cent of strength are incorrect, we submit the following: It is well known that Germany produces the wines of highest alcoholic content, Rhine and Moselle wines averaging in alcoholic strength from 10 to 12 per cent, owing to the fact that Germany is at the extreme northern latitude for grape growing, and that the fruit, which often fails to attain perfect maturity, develops normally a comparatively limited amount of sugar.

According to the official figures for fiscal year 1907, Germany imported into the United States 768,784 gallons, or about 79 per cent of its total importations, above 14 per cent of alcohol, and only 203,774 gallons, or about 21 per cent, below that standard. From these percentages it would appear that four-fifths of the German wines possess a higher alcoholic strength than 14 per cent, which is far from truth. The reverse is the case for Germany as for Italy and France.

Apart from the foregoing considerations, proving the error of the figures upon which the California wine interests base their argument, there are other reasons which would prevent the importation of fortified dry wines and their subsequent dilution, namely:

First. The standard for dry wine established by the United States Department of Agriculture and proclaimed in Circular No. 19, Office of the Secretary, June 26, 1906, establishes that dry wine shall contain no more than 16 per cent of alcohol by volume, which is far short of the 24 per cent, and low enough to prevent wines being imported for the unlawful purpose of reducing them to lower the burden of the duty.

Second. The enactment and enforcement of the food and drugs act, June, 1906, prevents such practice as alleged by the California wine interests, which would constitute adulteration and be punished and stopped as such within the meaning of said act.

Third. By such dilution as the California wine representatives allege, it would be impossible to obtain drinkable wines, the flavor of the wine not being determined by the alcoholic contents but by the total solids, which can not be put into the wine so as to hide adulteration, and the resulting product of such dilution would be a concoction devoid of its natural vinous flavor, such as demanded by consumers of wine, and impossible to sell. No other addition can be so easily detected in wine as that of water used in sufficient quantity to allow a profit.

NO BOUNTY ON EXPORTED ITALIAN VERMUTH.

A statement has been made to this honorable committee that the Italian Government allows an export bounty on vermuth. This chamber begs to state that this is not true. If it were, vermuth would, according to the present tariff law, have been subjected to an extra duty equal to the amount of the bounty paid.

Vermuth is a sweetened and slightly fortified wine, to which the extract of aromatic herbs has been added for the purpose of imparting to it its characteristic flavor. It has an average strength of 15 per cent of alcohol and contains from 10 per cent upward of sugar. In Italy it is prepared with white wine having a natural alcoholic strength of about 11 per cent. The Italian Government allows on the vermuth destined to exportation the drawback of the internalrevenue tax on what little amount of wine spirits (about 3 or 4 per cent) is used to fortify. Likewise, drawback of the duty or of the internal-revenue tax on sugar imported or manufactured in Italy is allowed for the amount of cane sugar added to vermuth destined to exportation, such allowance not exceeding, however, 5.25 lire (about $1) per hectolitre-26 gallons. Similar drawbacks of duties or internal-revenue taxes are allowed in all countries, including the United States, on articles imported for manufacture and then reexported. But the United States goes further by allowing the fortification of sweet native wines with grape spirits practically free of tax, not only when said fortified wines are exported, but also for home consumption.

The whole question amounts, therefore, to the partial allowance of the internal-revenue taxes on duties returned on spirits and sugar, which is not an export bounty, similar practices obtaining in the fiscal laws of all countries.

FOREIGN SWEET WINES ARE DISCRIMINATED AGAINST IN THE USE FOR

MEDICINAL PURPOSES.

The California wine interests avail themselves of the unfortunate circumstance that some time ago a regulation was issued by the Internal Revenue Department against the use of domestic sweet wine free of tax in the manufacture of patent or proprietary medicines, to claim that they are discriminated against and not sufficiently protected against foreign sweet wines.

As the disqualifying regulation in question has recently been suspended indefinitely by the Internal Revenue Department, no such claim can now be advanced, and fortified California sweet wines can be used in the preparation of medicinal wines as well as the imported sweet wines.

The theory of the department in issuing the regulation in question was that as California sweet wines are fortified with untaxed spirits, the Government would be defrauded of revenue if such wines could be used in medicinal preparations, while the use for the same purpose of imported sweet wines, which pay a duty of 35 cents per gallon, would not have caused any loss to the revenue.

With the removal of the ban on native sweet wines, these are benefited to the extent of from $3,000,000 to $4,000,000 annually, and the disqualification is now on the side of the foreign sweet wines, which have to pay a duty of 35 cents per gallon, while native wines can be used for medicinal purposes practically free from any tax.

Vermouth is manufactured in the United States free of tax, while imported vermouth has to pay a duty of 35 cents per gallon when in bulk and of $1.25 per dozen quarts when in bottle.

Vermouth, of which sweet wine is the normal base, and which forms a large item under the head of imported wines, can be manufactured

in the United States free of duty, as the sweet wines which are used for this purpose are fortified with practically duty-free grape spirits. Native wines containing as much sugar as required for the manufacture of vermouth (10 to 15 per cent) and much more spirits (they can be fortified up to 24 per cent) than is required for the manufacture of vermouth (about 15 per cent) are largely used in the manufacture of such product in the United States, not only with the advantage over the imported article of exemption from any duty or tax, but also with the advantage that by using a native sweet wine fortified up to 24, or even only up to 20 to 21 per cent of alcohol, a greater quantity of vermouth can be made with the domestic wine than it is possible to make abroad, where mostly wines of only 11 per cent strength are used for this purpose.

Foreign vermouth of 15 per cent strength, by paying duty at the rate of 35 cents per gallon, pays at the rate of 23 cents per degree for alcoholic content and not at the rate of 14 cents, as stated in the memorial of the chairman of the general committee of the State of California on tariff revision, there being no vermouth imported at the strength of 24 per cent. On the contrary, vermouth manufactured in this country pays no tax at all, and when considering that from 1 gallon of domestic sweet wine fortified up to 24 per cent of alcohol far more than 1 gallon of domestic vermouth can be manufactured it will be seen that the protection in favor of domestic vermouth is not only of 35 or 40 cents per gallon, but actually higher.

ANY INCREASE IN THE DUTY ON WINES WOULD DAMAGE THE AMERICAN COOPERAGE TRADE WITH FOREIGN COUNTRIES.

The California wine interests state in one of their memorials that all oak for cooperage must be imported from the East and pay a high freight to the Pacific coast.

In this respect the trade in imported wines is even under greater disadvantage. Italy imports almost all her cooperage from the United States, especially from the forests of Missouri and other southwestern and southern States. In the year 1906, out of a total of 22,391 tons of staves imported into Italy, 19.465, valued at 4,048,720 lires, or 86.93 per cent of her supply, came from the United States. Owing to the large size of the Italian wine industry Italy is a far larger consumer of American cooperage than California. We might state that Italy pays annually to the United States, on account of the cooperage imported from this country, as much money as the United States pays to Italy for the aggregate importation of Italian wines, and while Italy admits American cooperage free of duty, the United States charge on the average a 100 per cent duty on Italian wines. In respect to freight on cooperage Italy is at a decided disadvantage in comparison with California. First, the cooperage has to be hauled to New Orleans or some eastern port, thence to be shipped to Italian ports, thence again forwarded inland to the places where the wineries are, thus paying three freights, the first in the United States, the second for the ocean voyage, the third from the Italian port to final destination, against one freight only paid by the California wine maker.

61318-TARIFF-No. 42-08-10

CONCLUSION.

Any hindrance to the importation of Italian wines in this country in the shape of augmented duties would affect correspondingly this now flourishing American trade in staves with Italy, and from this standpoint, as well as from the other reasons aforestated, this chamber reiterates to this honorable committee its earnest recommendation that the tariff on foreign wines remain unaltered if it is not possible to reduce it, as the interests of both consumption and revenue would make advisable.

If no reduction of the present duties on wine, representing on bulk wines a protection of 100 per cent in favor of domestic production, is granted and the duties are rearranged according to a maximum and minimum tariff, then this chamber recommends that the present reciprocity rates (viz, 35 cents per gallon on wines in bulk and $1.25 per dozen on bottled still wine) be made the maximum rates.

The consumption of wine in this country is already suffering from the depressed condition caused by the prohibition propaganda, which does not except, as might reasonably be expected, in favor of such salutary beverages as light wines when used in moderation, but wrongly maintains on it the ban that it places on strong intoxicating beverages; it is also suffering under the heavy burden of restrictions placed upon it by fiscal excise laws, so that it has now reached the critical point when any increase of burden would prove fatal to it.

Under its distressed condition it appeals to the wisdom of the legislators for relief, and in this appeal, which this chamber earnestly hopes will not remain unheeded, it reminds them of the wise words with which one of the greatest American statesmen, Thomas Jefferson, pleaded its cause before Congress in a famous message, from which we quote:

"I rejoice," wrote Jefferson, "as a moralist, at the prospect of a reduction of the duties on wine by our national legislature. It is an error to view a tax on that liquor as merely a tax on the rich. It is prohibition of its use to the middle classes of our citizens and a condemnation of them to the poisons of spirits which is desolating their homes. No nation is drunken where wine is cheap, and none sober where the dearness of wine substitutes ardent spirits as its common beverage."

For the Italian Chamber of Commerce in New York:

G. PERERA,

G. GRANATA,

Acting President. G. R. SCHROEDER, Secretary.

SCHEDULE I.-COTTON MANUFACTURES.

BELTING AND PRESS CLOTH.

THE SCANDINAVIA BELTING COMPANY WRITES RELATIVE TO COTTON AND CAMEL'S HAIR BELTING AND PRESS CLOTH.

Hon. SERENO E. PAYNE,

BOSTON, MASS., December 15, 1908.

Chairman of the Ways and Means Committee,

Washington, D. C.

MY DEAR SIR: We would respectfully call your attention to what is an unfairness under the existing tariff, namely:

SOLID WOVEN COTTON BELTING.

These belts are used for conveying and transmission, and pay a duty of 45 per cent ad valorem as manufactures of cotton, section 7682. In fact, the duty on solid woven cotton belting is as high as the duty on cotton cloth. See paragraph 322, which says: "All the threads of which can not be counted under a glass or actually separated and counted," etc. This places cotton belting, which is a coarse material and which can not be used for anything except in manufacturing, as stated above, for transmission or conveying, on a higher duty than ordinary low-quality cotton goods.

Cotton belting should come under practically the lowest duty of manufactures of cotton.

It is now assessed the same duty as cotton hatbands, as ribbons, section 16093; also the same duty as provided in paragraph 322; as rouching, partly made of cotton; as manufactures of cotton, section 7511; as skirting, paragraph 322, hemmed on one side; as manufactures of cotton, sections 9297-11331; also as designated under paragraph 320.

Cotton belting is not a luxury, but an article which is used in manufacturing other goods.

The duties upon and classifications of the following goods make the importation thereof absolutely prohibitive.

CAMEL'S-HAIR BELTING.

Camel's-hair belting is used for the same purpose as leather, stitched canvas, "Scandinavia " solid woven, or rubber belts, namely, for transmission and conveying, and is really a belt that is much desired by the paper manufacturers of the country. It is classified as dress goods under paragraph 371, section 9666.