PARAGRAPH 266-OIL SEEDS. pounds per ton; hence, the proposed duty of one-fourth of 1 cent per pound on soyabean oil amounts to only 60 cents per ton of beans crushed, while the present rate on a ton of beans is $15, and would not give sufficient protection to the crusher in this country, exposed to competition with Chinese and Japanese oil mills, even if beans were on the free list. Soya-bean oil cake made in Chinese and Japanese oil mills has come into this country on the Pacific coast only during the last three years, in considerable quantities. It is made by methods resulting in this cake containing from 18 to 22 per cent of water. This excess of water must be removed in this country by expensive and wasteful processes before the oil-cake meal made from it is a staple, marketable product. As no properly made soya-bean oil cake can be obtained from these countries, the cost of soya-bean oil-cake meal is at present, with duty-free cake, higher than it would be with cake made in oil mills in this country by the usual methods, and containing only about 8 per cent of moisture, obviating paying freight on the excess water contained in the Chinese and Japanese made cake, and the expense of removing it in order to prevent the meal from heating. Soya-bean oil and China wood oil comes into this country mainly on the Atlantic coast, this import being largely in the hands of English and Japanese firms with branches in this country. Respectfully submitted. SEATTLE, WASH., January 4, 1913. Hon. W. E. HUMPHREY, Washington, D. C.: Agricultural interests, especially dairymen, want soya beans and peanuts for oil milling placed on free list, thus permitting crushing in domestic mills. Present tariff imposes duty on these seeds but exempts oil and cake made from them from duty. This now prohibits milling here. Proposed new duty, one-fourth cent per pound on soya bean oil insufficient protection for domestic mills even with beans on free list. Please make effort to have changes adopted as result hearing beginning Monday. C. B. YANDELL, Secretary. TESTIMONY OF J. J. CULBERTSON, CHAIRMAN OF THE INTERSTATE COTTON SEED CRUSHERS' ASSOCIATION, PARIS, TEX. The witness was duly sworn by the chairman. Mr. CULBERTSON. Mr. Chairman and gentlemen of the committee, on behalf of the Interstate Cotton Seed Crushers' Association, representing that body, I want to submit to your committee my brief, which has already been filed with the clerk. In reference to the soya-bean proposition, the most of the European countries that make this oil, that comes into this country free of duty, have such beans imported into their country free or with little or no duty. This places the American manufacturer at a disadvantage, and in our own case the cottonseed-oil mills of the South only operate on an average six months in the year. If we could have free entry of soya beans and such oleogenous seeds as are produced in foreign countries and that now carry almost a prohibitive duty, we believe that the mills of the South and the oil mills of this country would be decidedly benefited by employing their labor for a greater length of time, and consequently reducing their overhead charges. The supply of oils come from Germany, which country has a duty on American cottonseed oil. Some has come from England, which of course has no duty on American products. I do not know whether those other countries, like Austria-Hungary and France, which practically have prohibitive duties against American cottonseed oil, export PARAGRAPH 266-OIL SEEDS. any of that oil into our own country free of duty or not. If they do not, they certainly have the liberty of doing so. So that we believe, inasmuch as the Government is deriving no duty under this tax, owing to the fact that no beans are being imported, it would be a benefit to the American manufacturer to at least give him the privilege of producing something in his own way that is now being produced by these mills abroad that operate against American oil, and we ask that relief from you gentlemen. Mr. HULL. You say you want the present duties retained on lard? Mr. CULBERTSON. I thought you had concluded on that line. No; I was dealing with the soya bean and those oleaginous seeds that are grown abroad and on which there is an import duty of 25 cents per bushel, which is practically prohibitive. There is no business being done. On the other matter, lard, the brief practically makes our plea, and that is, that I think the trade is menaced to some extent at the present time, but in what degree it may be in the future menaced depends entirely on the ability of the people producing this cheap lard to supply the trade. Mr. HULL. I notice according to the statistics of the Government that last year we imported about $4,400 worth of lard and exported, in round numbers, $64,000,000 worth. Mr. DIXON. No; imported $582 worth of lard. Mr. HULL. Yes. We exported an amount equal to about twothirds of our domestic consumption, which amounts to something under $100,000,000. You spoke about the soya beans and these oleaginous seeds not producing any revenue. Lard produces no revenue either? Mr. CULBERTSON. Well, my knowledge of that particular subject is really confined to the complaint that was made on the part of the packer and manufacturer of a compound on the Pacific coast. The complaint was made some months ago, indicating that his products were being displaced to a considerable extent in the Philippines by imports of Chinese hog lard, and not only the pure lard itself but the compound, in which, of course, we are interested; that they were able to sell that lard with duty paid at something like 8 or 9 cents per pound. He expressed the fear that that condition would extend to the Pacific coast, and the yellow peril that we fear so much might come over our whole country. Of course, these are things that might possibly happen in the future; but it has really transpired in the Philippines, and the Chinese lard is being also imported to the Pacific coast. What the magnitude of that trade is I do not know; but it is having a serious effect and, according to his advices, will ultimately displace American products in those islands. We are interested, of course, to the extent that the manufacture of the compound takes with it a considerable amount of cottonseed oil, and we do not want anything to interfere with that if it may possibly be avoided, as is quite natural. The CHAIRMAN. Your time has expired. Mr. CULBERTSON. I thank you, gentlemen. PARAGRAPH 266-OIL SEEDS. The witness filed the following with the clerk: THE INTERSTATE COTTON SEED CRUSHERS' ASSOCIATION, Hon. OSCAR W. UNDERWOOD, DEAR SIR: In my communication to your committee of January 4, 1913, I gave briefly some reasons as to why sago beans should, in our opinion, have free entry. I would now like to call your attention to our contention as to why oil seeds N. S. P. F. under paragraph 266, now carrying a duty of 25 cents per bushel, should have such materially reduced or abolished. There has been no importation to mention of such into this country and consequently no revenue has been derived by our Government, owing to what practically amounts to a prohibitive duty on such; therefore no one is deriving any benefit under present conditions, but if such change as is suggested be adopted it would appear that considerable advantage would accrue to the American manufacturers of oil from oleaginous seeds if such could be imported into this country free of duty, as is practically done by most of those countries abroad that ship oils therefrom free into our own. Inasmuch as most of the oils expressed from such seeds have free entry under paragraph 639 of the free list, under which this Government derives no duty, it appears to us that the suggestion made would be of benefit to American manufacturers in which the revenue to the Government would in nowise be changed. We also wish to present to you our views as to why the present duty on lard should be retained. Under paragraph 288 the present duty is 14 cents per pound, the act of 1909 having reduced such from 2 cents per pound, which the act of 1897 imposed. The chief objection is that the fact of free entry, it would be placed on a parity with Chinese hog lard. China is already importing into the Philippines considerable hog products, chiefly lard, on which there is an import duty of $2.50 per 100 kilos, equal to $1.14 per 100 pounds, which comes chiefly from Shanghai and Hongkong and which is displacing American lard and compounds in those markets; such products are also coming to the Pacific coast and the business is increasing. Complaint was made to A. D. Melvin, Chief of the Bureau of Animal Industry, that possibly the methods of handling and feeding hogs in the Orient and the manner in which such are slaughtered and lard rendered might not comply with the rules governing such as are in effect by the bureau of the Agricultural Department the idea being that the importation of such products could be excluded on the ground of unhealthfulness or improper sanitation; but careful investigation has indicated that the Hongkong and Shanghai packers have complied fully with the pure-food laws of the Philippines and also those of the United States. So that to abolish the present duty would mean that we should undoubtedly have immense quantities of Chinese lard imported into the United States in competition with our home products. If, therefore, you could consider the reasons herein presented are good and sufficient for the belief that our American manufacturers would be benefited, we trust that you will make such changes in the present schedule as will bring about such results. Respectfully submitted. BRIEF ON CASTOR BEANS OR SEEDS. The duty assessed on this article under the present law is 25 cents per bushel of 50 pounds. House bill 20162, Sixty-second Congress, proposed a reduction on castor oil from 35 cents per gallon to 20 cents per gallon, which figures some 43 per cent. seed being the raw material, we ask your honorable committee to duly consider this paragraph in its relations to the manufactured product-castor oil. Castor Approximately 60 per cent of the ingredients of a bushel of castor seed of 50 pounds is a by-product called castor pomace after the oil is extracted from the seed. It is low grade and carries 4 to 5 per cent of nitrogen. It is used as a filler by fertilizer makers. Castor pomace is of much higher value in Europe than this country. We import castor seed for the oil contained in the seed, but we pay freight as well as the levied duty on the importations on this by-product in the castor seed. We also desire to call your attention to this paragraph, which is somewhat ambiguous in its administrative features. Nothing is said about the dirt or other impurities contained therein, but by implication, however, it would appear it was the intention of the Congress that passed the act of August 5, 1909, that no duty was to be assessed on PARAGRAPH 266-OIL SEEDS. the dirt or impurities. The provision heretofore contained in paragraph 254 of the Dingley Act, 1897, whereby allowance for impurities were forbidden, the act of August 5, 1909, eliminated such provision. Castor beans of commerce contain varying quantities of impurities, on an average of 1 to 5 per cent, but at times very much more. It is not practical in a commercial way for shippers to remove the entire impurities, as there is intermingled throughout the seeds particles of lumpy earth, stones of many sizes, and other matter of no value whatever to the manufacturers of castor oil. Under an old English custom of many years' standing, castor seed is sold in the world's markets guaranteed on a pure basis 1 per cent and 3 per cent admixture; that in the settlement buyers are allowed the excess impurities if any over the contract basis, and deductions are made by seller in conformity thereto. The analysis is made by a duly established association in New York and certificate issued showing the amount of pure castor seed contained in each lot or parcel. The payment of a duty on the impurities adds just that much to cost of castor seed, and consequently likewise an increased cost to manufacture castor oil. It is not fair, just, or right to the importer to pay the Government a duty on worthless articles, such as dirt, stones, and other substances of no value. We therefore pray your honorable committee to have it clearly stated in the paragraph that no duty be assessed on the impurities and the administrative features to be so properly expressed and covered to protect the Government in liquidating such imports. Respectfully, yours, THE BAKER CASTOR OIL Co., 100 William Street, New York City. F. H. MARSH, Secretary and Treasurer. The CHAIRMAN WAYS AND MEANS COMMITTEE, JANUARY 18, 1913. Washington, D. C. BRIEF OF LOUISVILLE COTTON OIL CO. LOUISVILLE, KY., January 21, 1913. Hon. O. W. UNDERWOOD, Chairman Ways and Means Committee, House of Representatives, Washington, D. C. SIR: This Company begs to acknowledge due receipt of the committee's letter, dated January 11, in reply to its communication of the 9th instant, and we thank you very kindly for the assurance same contains, that the matter referred to will have the careful consideration of the Committee on Ways and Means. In view of the hearings on tariff revision, by your committee, we once more beg to bring the matter prominently and urgently to your attention. While in our previous correspondence our principal concern was the treatment our industry received at the hands of Austria-Hungary, in which matter, by the way, as yet no visible relief has been secured, regardless of the strenuous efforts made on the part of the Department of State, as well as the representative American cotton oil manufacturers, new difficulties of like character have arisen. The Government of the Republic of Argentina, South America, has recently proposed to advance the duty on cotton seed oil over that on the other edible vegetable oils, in fact, reducing the present rate of duty on imports of olive oil. The Government of the Republic of Uruguay, South America, recently increased the duty on cotton seed oil, without a corresponding increase on other vegetable oils. The action of the Governments of those two South American Republics is so much more significant if we call to your attention the fact that since the beginning of the season, September 1, 1912, up to the present date, exports of American edible cotton oil to South American markets have increased at least 100 per cent over the exports during the corresponding period one year ago, while, on the other hand, exports to Europe in the same length of time, owing to various reasons and circumstances, have declined at the rate of 100,000 barrels, approximately. Foreign countries generally are, of course, recognizing the weakness of the present "maximum and minimum" provision in the United States tariff law, and will, doubtless, not fail to take advantage hereof, as has been done in the cases referred to above. Not only the cotton oil industry, but all others will, doubtless, as time goes on, unless some certainly practical method is written into the law for the protection of American PARAGRAPH 266-OIL SEEDS. foreign trade, continue to suffer from discriminatory treatment of one kind or other at the hands of foreign governments. The cotton oil industry is by no means the only one which is suffering at present from discriminatory action on the part of foreign governments. All of them have, therefore, substantially the same needs with respect to adequate protection of their trade in export markets. The cotton oil industry is, of course, concerned particularly in its own welfare. The production of cotton oil for any given year is too large for purely home consumption and must, therefore, be disposed of in foreign markets. Hence the importance of not only reopening markets it has heretofore had, but of their expansion into new fields. It is probably not within the province of representatives of the cotton oil industry to suggest the particular method by which the end desired shall be reached, nor is there a desire to insist upon any special method. In view, however, of the fact that nothing seemingly more reasonable has thus far been proposed, we have taken the liberty, and felt ourselves justified, in strongly directing your attention to the method proposed at the last session by the Secretary of State who, in view of the isolated cases of discrimination, not justifiably to be met by applying the present remedy, recognizing the impracticability of that remedy and advocating, therefore, the enactment into law of the retaliatory clause in section No. 2 of the tariff law. Congress may prefer some other method, and if that method can be certainly shown to work out satisfactorily the industry will gladly urge its enactment. In the meantime, the cotton oil and its allied industries must strongly urge Congress, in considering the passage of a new tariff law, to keep steadily in mind the importance of providing in the new tariff some method by which their foreign trade may be properly cared for. In bringing once more the importance of the industry vividly before you, would say, that an aggregate capital of approximately $300,000,000 is involved, cotton oil, as you well know, is, and has been, on the free list of our present tariff, and our appeal is not directed toward securing protection for the industry by imposing a duty hereon, but merely and solely an appeal for your individual support in the matter of tariff adjustment, so that the new law will include some effective measure for remedying such abnormal situations as those illustrated. We thank you in anticipation of your support in the matter, and will appreciate, at your leisure, receiving your views on the subject. We sign ourselves, most respectfully, LOUISVILLE COTTON OIL Co., By J. J. CAFFREY, President. STATEMENT OF PACIFIC OIL MILLS ON SEED OILS. Hon. STANTON WARBURTON, Member of Congress, Washington, D. C. SEATTLE, WASH., January 8, 1913. DEAR SIR: During the past three years my company has imported to this coast many thousand tons of soya bean oil cake, and considerable quantities of soya bean oil, peanut oil, and other foreign oils, all made in Chinese and Japanese oil mills. We would have preferred very much to bring the oil seeds into this country and manufacture therefrom the oil and cake here, but on account of the discrimination in favor of the foreign oil mills in the present tariff have been prohibited from doing so, soya beans, peanuts, and most all other seeds being highly dutiable, while the oils and oil cakes made from them are on the free list and compels us to buy the oil cake and oils made abroad. This is a most unfair condition in the tariff, and we respectfully request your aid and support to have such changes made during the pending revision which will make it possible to manufacture in this country the large quantities of foreign oils imported. To accomplish this all foreign oil seeds must be admitted duty free-when for crushingthe oil and cake made from which are on the free list; but, whatever changes are made, the domestic oil miller should at least be put on an equal basis with foreign mills. We must compete with oils and cake made in Chinese and Japanese oil mills, and a small protective duty should be placed on the oils, and in the case of the soya bean also on the oil cake, as soya bean cake comprises about 70 per cent of the value resulting in crushing this bean, and in the principal product, the value of the soya bean oil being only about 29 per cent. Soya beans yields by crushing about 12 per cent of oil, |