PARAGRAPHS 247-248-MILK. ingredients. The profit on this food has been materially reduced because of the increased price that we have been called upon to pay for milk sugar and the prospects are that we shall be compelled to pay still higher prices so that the net profit on the sale of the food, unless we can obtain relief, will be much smaller than is legitimate. Milk sugar now pays a duty of 5 cents per pound. We do not know what has been the price during the various years abroad, but we believe that it ranges from about 7 cents to 17 cents. Milk sugar is a by-product. The principal article to be manufactured, and that for which there is the largest demand, is casein. In the manufacture of casein, whey is produced. Formerly manufacturers had some trouble in disposing of this whey. They were not allowed to permit it to run into adjacent streams and they had to pay to dispose of it in some way or other. At the present time, whey is used as a basis for the obtaining of milk sugar. In normal times it happens that more milk sugar is produced than can be marketed for the reason that the demand for casein is so great that more whey is produced than can be advantageously used. It sometimes happens, as during the last year or two, owing to the scarcity of all milk products, that these conditions do not exist and that there is an actual scarcity of whey. It has been found by experience that the only method that can be used advantageously is to control the milk from the time of milking to the time of the ultimate disposal of all its products, including butter, cheese, casein, milk sugar, powdered milk, and various other products. This manufacturing requires the investment of a very large capital and expert knowledge and great experience. There is, at the present time, only one company in the United States that is sufficiently large to supply our necessities. This company is the National Milk Sugar Co., Pine and Nassau Streets, New York. They have treated us very fairly and from their point of view very liberally, yet if we are compelled to pay the advanced price they are disposed to charge us on the expiration of the present contract, it would consume over 40 per cent of the net profits of Eskays Food, based on the profits calculated on sales during 1912. During the period of greatest pressure last year, the vice president of the National Milk Sugar Co. told us that in order to fill his contracts he was endeavoring to purchase milk sugar in Europe at a price which would be considerably over the nominal market price when the duty was added. During the years 1898 and 1899, when there was competition, we bought milk sugar at 8 cents per pound, delivered in Philadelphia. Some time in 1899 or 1900, however, the trust bought up various competitors, and among other terms paid them for agreeing to refrain from manufacturing milk sugar for a period of five years. Our present contract price, made some years ago, is 10 cents per pound. The lowest price at which the trust will extend this contract is 12 cents per pound. I would state here from their point of view their offer is extremely liberal. The present market price is 17 cents to 18 cents. At the expiration of our previous contract they asked us so large an advance that we were compelled to buy a small plant and endeavor to manufacture the article ourselves, and for a year we obtained our own product in this way. Not having sufficient knowledge and experience to manufacture to the best advantage, and not being equipped to handle all the various products of milk, we could only manufacture on the basis of purchasing the whey. The consequence was that our venture cost us during that year a loss of about $20,000, but the result was that we were able to obtain a reasonable price from the trust. The circumstances are such that, in our opinion, the duty should be removed from milk sugar or reduced to 1 cent per pound. If the present duty is retained we will, at the expiration of the present contract, be forced to attempt to engage in the process of manufacturing milk sugar, of which we have little knowledge, and that will overtax our resources, or else accept such price and terms as the only dealer in America, who has the capacity to supply our wants, chooses to make to us. The fact that the trust has been most considerate in its dealings with us and has, from their point of view, made sacrifices for our benefit, does not change our opinion that we should be permitted to obtain our supplies from more than one quarter and that we should be freed from a position in which we are placed by the institution of a prohibitive tariff on milk sugar, by which we are compelled either to engage in a hazardous enterprise or submit to the dictation of another. All of which is respectfully submitted. SMITH, KLINE & FRENCH CO., P. S. As this is a matter of very great importance, we would ask if you will kindly acknowledge the receipt of this letter. PARAGRAPH 249. PARAGRAPH 249-BEANS. Beans, forty-five cents per bushel of sixty pounds. BEANS. TESTIMONY OF JAMES W. NYE, REPRESENTING THE MEXICAN IMPORTING CO., OF CHICAGO. The witness was duly sworn by Mr. Harrison. Mr. NYE. I represent the Mexican Importing Co., of Chicago, an Illinois company engaged in the importation of vegetables in carload lots from Mexico into the United States and the distributing and selling of the same throughout this country. I am interested in Schedule G, paragraphs 249, 250, 254, 261, 262, 265, 269, and 571. I recommend a change in the tariff by the omission of all of the paragraphs above named except the last, and the insertion of the words "and vegetables" in the last paragraph, No. 571. The paragraphs to be omitted provide for the following import duties: 249 beans, 45 cents per bushel; 250, beets, 25 per cent ad valorem; 254 cabbages, 2 cents each; 261, onions, 40 cents per bushel; 262, peas, 25 cents per bushel; 265, potatoes, 25 cents per bushel; and 269, other vegetables, 25 per cent ad valorem. The paragraph to be amended will read as follows": 571. Fruits, vegetables, or berries, green, ripe, or dried, and fruits and vegetables in brine, not specially provided for in this section, free. On page 4 of my brief I have compiled from Government reports the imports of these various articles. The imports referred to are as follows: Value of fresh vegetables imported, 1909 to 1911. [Compiled from United States Government statistics, Bureau of Foreign and Domestic Commerce, for. merly Bureau of Statistics, Department of Commerce and Labor.] I respectfully represent that these articles, beans, peas, beets, cabbages, onions, potatoes, and other fresh vegetables, are prime necessaries of life and should be admitted free for the purpose of decreasing the present high cost of living, in accordance with the principles of the platform approved at the last election. These vegetables, if they come in free, will not interfere with home-grown products, and they will come at a season of the year when the products of the American farmers are not in the market. Mr. PAYNE. Onions? Mr. NYE. Yes, sir.. PARAGRAPH 249-BEANS. Mr. PAYNE. Do you mean to say that onions will come at a time when the products of the American farmers are not in the market? Mr. NYE. Yes, sir. Mr. PAYNE. But Bermuda onions will come at such a time, will they not? Mr. NYE. I do not think all of these come from Bermuda. Mr. PAYNE. How about cabbages? Mr. NYE. I can not say where cabbages come from, sir. Mr. PAYNE. But they will come in when the American farmers' cabbages are in the market, will they not? Mr. NYE. I think they come in ahead of the others. Mr. PAYNE. In 1890 the Washington markets were full of Dutch cabbages, and the duty was very low, and there was a big importation that year. Mr. NYE. But it did not hurt anybody to have cheap food, did it? Mr. PAYNE. Well, it did not hurt anybody except the farmers who raised cabbages. I think the middlemen were the people who got a big profit. I do not think it hurt anybody except the farmers and did not do anybody any good except the people who sold to the consumer. When you send them out to your customers, the ultimate consumers, does it bear any relation to what you have to pay for them ? Mr. NYE. Yes, sir; I think so. I think it does decidedly. It seems to me so. I never sold anything below cost without it concerned me mightily. Mr. PAYNE. Does it have any relation at all to it? Mr. NYE. I think it does, most surely. I think if you take the tariff off of fresh vegetables you will reduce the price to the consumer by just that amount. Mr. PAYNE. I had a neighbor who had a large quantity of fresh vegetables. He went down to his grocery store and told the man he would like to sell them to him and asked what he was getting for them. He told him so much, and he took them there, and he then found that when placed on sale the man was only making 900 per cent on them— that is, when he sold them at retail. That did not seem to bear any relation to the price he paid for them. And that was only one case out of thousands. Do these matters bear any relation to what the people pay for them? Mr. NYE. I think so. The goods we want to bring here, Mr. Payne, have to pay a freight tariff of $1 per hundred to the Mississippi River and 25 cents beyond that to Chicago. Mr. PAYNE. They buy apples up in my district for 50 cents a bushel and sell them in Washington for 2 or 3 cents apiece. A groceryman will buy a bushel of potatoes for 80 cents, and when he gets them he will sell a basket of them for $1.25. Mr. NYE. I think I can send enough vegetables here, Mr. Payne, so the middleman can not obtain those prices, and I am only wanting a chance to try it. Mr. PAYNE. I want to suggest that if you teach this committee some way by which it can compel retailers and wholesalers to be content with a fair profit it will do more toward getting cheaper things than by taking a cent and a half off beans and letting some people sell them at great profit. PARAGRAPH 249-BEANS. Mr. NYE. I have no brief to offer for the Chicago packers, but it is a matter of record, I think, that the profits are not so very great. A large portion of the selling price of imported vegetables represents freights paid to American railroads or railroads built and operated by American capital. At the present time cantaloupes are admitted free of duty as "fruit," but tomatoes, potatoes, beans, or peas grown in the same field by the same planter, and imported in the same car, pay 25 per cent duties. It is believed that the immediate effect of this reduction of tariff will be insignificant, for the reason that these articles, especially cabbages, onions, potatoes, and especially other vegetables, namely, tomatoes, are imported principally in the winter months and early spring, and seed has to be planted a considerable time in advance of those seasons. After the first year the effect will probably be to increase the importations to such a point that the winter prices only will be reduced by the exact amount that the tariff is reduced. In the season when fresh vegetables are produced at home the foreign article can not expect to compete, but the winter markets will absorb much larger amounts of vegetables as the prices are reduced, and probably the importations of all articles put on the free list will be increased fourfold or more the first year after the tariff is removed, and eight or ten fold thereafter. The limitations on this increase will be the following: First, season. Except in extraordinary cases the market for foreign vegetables will be largely in the winter and early spring. Only in cases of crop failures here can imported vegetables compete with home products. Second, railroad rates. The prices of imported vegetables can not fall below the freight rates (plus cost of growing and packing) from the foreign lands. At the present time there is a practically uniform rate of I cent per pound on all fresh vegetables from and to nearly all points between the Pacific coast and the Mississippi River. This cent per pound is a protective tariff imposed by the railroads, so that our farmers do not need any other tariff. It is, therefore, respectfully urged that all parties, and especially the average "consumer," will be benefited by the removal of all tariff on vegetables, and that no one will be harmed, not even the American farmer. I thank you, gentlemen, for your patience. Mr. Nye also presented the following brief: [Schedule G, pars. 249, 250, 254, 261, 262, 265, 269, and 571.] The undersigned respectfully states that he represents the Mexican Import Co., of Chicago, an Illinois corporation engaged in the importation of vegetables in carload lots from Mexico into the United States, and the distributing and selling of the same throughout this country. He recommends a change in the tariff by the omission of all the paragraphs above named except the last, and the insertion of the words "and vegetables" in the last paragraph, No. 571. The paragraphs to be omitted provide for the following import duties: 249, beans, 45 cents per bushel; 250, beets, 25 per cent ad valorem; 254, cabbages, 2 cents each; 261, onions, 40 cents per bushel; 262, peas, 25 cents per bushel; 265, potatoes, 25 cents per bushel; 269, other vegetables, 25 cents per bushel. The paragraph to be amended will read as follows: "571. Fruits, vegetables, or berries, green, ripe, or dried, and fruits and vegetables in brine, not specially provided for in this section." PARAGRAPH 249-BEANS. REASONS. The reasons for recommending this reduction in the tariff are: First, beans, peas, beets, cabbages, onions, potatoes, and other fresh vegetables are the prime necessaries of life and should be admitted free for the purpose of decreasing the present high cost of living, in accordance with the principles of the platform approved at the last election; second, imported vegetables will not come into serious competition with the home-grown products the home market is well and sufficiently protected by the freight tariffs and do not require an import tariff; third, a large portion of the selling price of imported vegetables represents freights paid to American railroads or railroads built and operated by American capital; fourth, at the present time cantaloupes are admitted free of duty as "fruit," but tomatoes, potatoes, beans, or peas grown in the same field by the same planter and imported in the same car pay 25 per cent duties. ESTIMATES OF INCREASED IMPORTATION AFTER CHANGES. Immediate effect.-It is believed that the immediate effect of this reduction of tariff will be insignificant, for the reason that these articles, especially cabbages, onions, potatoes, and especially other vegetables, namely, tomatoes, are imported principally in the winter months and early spring, and seed has to be planted a considerable time in advance of those seasons. Following years.-After the first year the effect will probably be to increase the importations to such a point that the winter prices (only) will be reduced by the exact amount that the tariff is reduced. In the season when fresh vegetables are produced at home the foreign article can not expect to compete, but the winter markets will absorb much larger amounts of vegetables as the prices are reduced, and probably the importations of all articles put on the free list will be increased fourfold or more the first year after the tariff is removed, and eight or ten fold thereafter. The limitations on this increase will be the following: (1) Season: Except in extraordinary cases the market for foreign vegetables will be largely in the winter and early spring. Only in cases of crop failures here can imported vegetables compete with home products. (2) Railroad rates: The prices of imported vegetables can not fall below the freight rates (plus cost of growing and packing) from the foreign lands. At the present time there is a practically uniform rate of 1 cent per pound on all fresh vegetables from, and to, nearly all points between the Pacific coast and the Mississippi River. This cent per pound is a protective tariff imposed by the railroads, so that our farmers do not need any other tariff. It is therefore respectfully urged that all parties, and especially the average consumer, will be benefited by the removal of all tariff on vegetables, and that no one will be harmed, not even the American farmer. Respectfully submitted. $4.444.086 $1,371,676 $1,083, 155 ONIONS. North America, except Mexico.. South America.. Asia... Other preserved Oceania. Other natural Africa.. Total onions.... |