Being thoroughly acquainted with the operation of the McKinley bill and prior tariff laws on these chemicals, and also of the Wilson bill and the changes it produced, and most familiar with the operation of the Dingley bill, we respectfully submit that your committee should not at this time take any action that would disturb present conditions. The schedules of the present tariff with reference to the articles which we have enumerated above are equitable, and we ask that your committee permit them to stand without change. THE GRASSELLI CHEMICAL Co., By C. A. GRASSELLI, President. GERMAN CHEMICAL INDUSTRY. THE MONSANTO CHEMICAL WORKS SUBMITS INFORMATION RELATIVE TO THE GERMAN INDUSTRY. Hon. SERENO E. PAYNE, ST. LOUIS, December 9, 1908. Chairman Ways and Means Committee, Washington, D. C. SIR: We are inclosing herewith some information regarding the German chemical industry which may prove of interest to you at the present time unless you already have this information before you. You will particularly note the reserve fund created by these companies which serves, when the occasion requires, to fight competition. The manufacture of chemicals is unquestionably in its infancy in the United States and should be fostered and encouraged, the field being so extensive. A number of German concerns are now represented in this country. Their method seems to be to incorporate with a comparatively small capital, say, $5,000 or so, in order to have proper footing, and on this capital they do a business of millions in the United States. The few chemical manufacturers in the United States who are endeavoring to compete with these German manufacturers should have free raw material and a protective duty on the finished products that will be liberal and considerably more than the actual difference in costs of manufacture, because with this large reserve fund they can put any American competitor out of business by underselling whenever they are so disposed, unless the tariff be such as to protect him. The Germans have made a specialty of chemical manufacture, and their methods are the most economic. By reason of the combination of these immense concerns, which enables them to get high prices at home and to sell their surplus here at low prices, the young American manufacturer in competition with them will have a hard road to travel for some little time, with all the protection you can give him; but he will win out in the end if he is given the encouragement he is entitled to, by having the nerve to put up his money and time to compete with these foreign, gigantic institutions. An illustration of this is in one of our products, i. e.. phenacetin, which has a large sale and which we undertook to manufacture a lit 61318-SCHED A-09-- 37 tle over two years ago. The lowest price of the Elberfeld company then was $12 per pound. To-day it is 85 cents per pound, and, from information recently received, they would sell at still lower prices. No doubt the Schoellkopf, Hart ford & Hanna Company have similar experiences with aniline colors. We call your attention to these conditions, knowing that you desire all actual information that may be available. Respectfully, MONSANTO CHEMICAL WORKS, Per JNo. F. QUEENY, President. EXHIBIT A. Consul-General Richard Guenther, of Frankfort, furnishes the following information concerning the condition of the German chemical industry in 1907: This district contains some of the most prominent chemical works and forms one of the chief centers of that line of industry in Germany. I quote the per cent dividends declared from the earnings by some of the German joint stock companies in 1907, the figures in parentheses being the dividends declared in 1906: Color works at Elberfeld, 36, and an extra dividend of 20 distributed from reserve fund No. 2; aniline and soda works at Ludwigshaven, 30 (30); chemical factory at Berlin, 10; chemical works at Biebrich, 32 (224); chemical works of Griesheim, 14 (12); color works of Hochst, 30 (30); united chemical factories, Mannheim, 20 (20); chemical factory Weil-ter-Meer, 10 (10). The German chemical works do not distribute all their net earnings in annual dividends; they write off large sunis on the works, real estate, etc., and transfer considerable amounts to reserve and special reserve funds, besides awarding substantial money grants to their supervisory boards (composed of principal stockholders), directors, and officials. To illustrate this the following extracts from last year's business of two of the smaller chemical companies are given: One of these, at Frankfort, whose share capital is 14,000,000 marks ($3,332,000), earned, in 1907, 7,557,000 marks ($1,798,566). The costs and actual business expenses were 1,752,000 marks ($416,976). As the declared dividend of 14 per cent absorbed but 1,960,000 marks ($466,480), the balance is put away in writing off large sums on the plant, carrying large sums to various reserve funds, distributing bonuses among directors and officials, to pension fund, and carrying forward to new account 814,000 marks ($193,732). It may be remarked here that the latter sum itself is equivalent to 6 per cent extra dividend on the company's entire share capital. A chemical concern at Biebrich, on their capital of 10,000,000 marks ($2,380,000), earned 6,165,000 marks ($1,467,270), from which 584,000 marks ($139,992) were deducted for the business expenses. The dividend of $2 per cent declared on the share capital absorbs but 3,200,000 marks ($761,600), consequently a similar process of writing off and distributing and carrying over, as in the other case quoted, was pursued. Of all the prominent lines of manufacture in Germany, that of the chemical branch is the most profitable. There is a growing tendency among the successful companies to fuse their interests, so as to lessen competition among themselves, because it is feared that the new patent laws in foreign countries will eventually create abroad competition to the chemical works of Germany, which now almost enjoy a monopoly. EXHIBIT B. According to a recent consular report, the German Society for the Protection of the Interests of the Chemical Industry at its recent annual meeting reported that no serious effects had thus far resulted from the general business depression. The number of chemical factories in Germany increased from 8,505 at the beginning of 1907 to 8,616 at the end of the year. The number of employees increased from 195,000 to 207,000. Their wages advanced from $49,266,000 to $54,740,000. The stock companies, numbering 166, reported at the close of 1907 a total stock capital of $125,806,800, reserves of $41,316,800, and outstanding debts amounting to $22,514,800. They paid in dividends the sum of $19,444,600 on the entire capital. This is an increase of 0.38 on the rate for 1906. The profits vary greatly in the different branches. The average rate of profit during 1907 for the entire industry was 10.73 per cent, an advance of 0.7 per cent over the rate for 1906. The outlook for a continuance of high profits is not considered as favorable, partly on account of recent tariff arrangements and partly on account of the requirements of the new British patent law. But the customs statistics of the German Empire for the first half of 1908 give a most satisfactory showing for the commerce in chemicals. In comparison with the same period of 1907 there is a slight lessening of imports and a more marked increase in exports. The total exports of chemicals in the first six months of 1908 were 1,170,714 metric tons, against 1,143,376 in 1907, and the total imports 729,776 tons against 800,423 in 1907. (Electrochemical and Metallurgical Industry, Vol. VI, No. 12, Dec., 1908.) INDEX. NAMES. Page. Adams, Geo. L., extracts for tanning. Adderley, Stanley, San Francisco, Cal., sponges. Alder, Wm. A., castile soap...... Alexander, D. S., M. C., New York, coal-tar colors and aniline dyes.. Aluminum Company of America, alumina.... 191 533 523 141 54 American Alkali and Acid Company, Bradford, Pa.: Lactic acid.. Oxalic acid American Agricultural Chemical Company, New York City, sulphate of ammo- 20 29, 30 65 American Association of Chewing Gum Manufacturers, chicle........ 259 98 309 American Cyanamid Company, New York City, calcium cyanamid or lime 92 American Mutoscope and Bioscope Company et al., moving pictures.. 161 428 146 150 Amoskeag Manufacturing Company, Manchester, N. H., coal-tar colors and dyes. 146 565 429 Apponaug Company, The, Apponaug, R. I., coal-tar colors and dyes Arnold Print Works, North Adams, Mass., coal-tar colors and dyes... 146 146 Association of American Agricultural Colleges and Experiment Stations, Bur- 92 Association of American Agricultural Colleges and Experiment Stations, fer- 92 Athanassiades, J. E., Sons, olive oil, castile soap. 323 152 Atlantic Terra Cotta Company, New York City, carbonate of baryta or with- |