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PARAGRAPH 275–DRIED FRUITS.
While the following point may not have any bearing on the subject, yet it is to be remembered that the cost of labor has advanced very materially in the Hawaiian Islands during the past few years, while in the Straits Settlements, which is the other principal source of canned pineapples, the rate of wages for labor is exceedingly low, being from one-fifth to one-quarter of what we pay in the Territory of Hawaii.
However, if your committee decides to reduce the tariff on canned pineapple, the reduction, I believe, should depend to a considerable extent upon the amount of reduction of duty made in the various materials which we use, particularly those mentioned above, and more specifically tinplate. In case no considerable reductions are made in these items, I would think that it would be scarcely just to reduce the tariff on preserved pineapple, whether in sugar or in sirup.
In this connection I would call to your attention the necessity of continuing in effect the present difference of classification between pineapple preserved in its own juice and pineapple preserved with added sugar, sirup, etc. Under the Dingley Tariff Act there was considerable litigation over this matter, particularly as to the determination of what constitutes the difference between pineapple preserved in juice and pineapple preserved in sugar. This uncertainty was entirely eliminated by the wording of the clause in the Payne Tariff Act.
It seems clear that pineapple containing added sugar should pay a higher duty than pineapple preserved in its own juice.
In concluding, I would point out that the pineapple industry is an industry of small concerns and independent planters; that it gives employment to a larger number of citizens, and that it is doing considerable in the way of diversifying the interests and to some extent the land holdings of the islands. Respectfully submitted.
J. KALANIANAOLE, Delegate from Hawaii. SUGGESTS LOWER RATE FOR CANNED PINEAPPLE.
PORTLAND, OREG., December 20, 1912. Hon. GEORGE CHAMBERLAIN,
Washington, D. C. Dear Sir: On August 15, 1911, we wrote calling your attention to the ridiculous tariff in effect on canned pineapple and now wish to reiterate our statements at thai time. Prior to the Aldrich-Payne tariff the duty was 25 per cent ad valorem on this article and thousands of cases were imported into the United States. When the duty was raised to 35 per cent ad valorem and 1 cent per pound it naturally precluded the bringing in of any canned pineapple. IIence there has been none imported from Singapore and other points during the past three years. Therefore the United States Government is getting no revenue from this article, where previously it did obtain a certain amount of revenue. The raise in the tariff made by the AldrichPayne bill we maintain was not a tariff but absolute prohibition against importation, giving the Hawaiian growers a monopoly of the canned pineapple business and enabling them to obtain higher prices for their goods than was warranted and to the disadvantage of the consumer. If this article is to be taxed at all, 25 per cent ad valorem is sufficient, while we believe this article should be placed on the free list.
Will you kindly let us know if some action can not be taken to reduce the tariff on this article? Yours, very truly,
T. M. STEVENS & Co. (Inc.),
By T. M. STEVENS. PARAGRAPH 275.
Figs, two and one-half cents per pound; plums, prunes, and prunelles, two cents per pound; raisins and other dried grapes, two and one-half cents per pound; dates, one cent per pound; currants, Zante or other, two cents per pound; olives, in bottles, jars, kegs, tins, or other packages, containing less than five gallons each, twenty-five cents per gallon; otherwise, fifteen cents per gallon.
DRIED FRUITS. TESTIMONY OF L. B. PARSONS, PRESIDENT OF THE DRIED
FRUIT ASSOCIATION, OF NEW YORK. The witness was duly sworn by the chairman.
Mr. Parsons. Mr. Chairman and gentlemen of the committee, the Dried Fruit Association of New York respectfully submit the follow
PARAGRAPH 275–DRIED FRUITS.
ing changes in the duties that are now levied on certain dried fruits, nuts, and beans. As importers and jobbers of these commodities, we are in a position to pass along any reasonable duties that may be assessed by adding them to our selling price and so collect them from the ultimate consumer. It may reasonably be assumed, therefore, that we approach this matter from an unbiased point of view. However wise the protective duties that were levied on such domestic products as raisins, prunes, etc., may have been in the beginning, the excuse for continuing them on the ground of protection no longer exists, for the export trade of the United States to-day is a large factor in the dried-fruit industry, and in some instances a controlling one. We believe, therefore, that the changes we advocate can be safely considered from the standpoint of revenue alone.
Many of the items on which we ask a reduction have great food value, and in the case of shelled nuts their use as such is constantly increasing, and yet in many instances the present duty is equal to from 75 to 100 per cent of their actual value. For other products, such as dates, currants, and filberts, we are wholly dependent upon foreign production, as, owing to geographic or climatic conditions, all attempts to raise them here have failed. These articles have all eminent food value and are viewed as common necessities by the working classes, while all pay a duty of from 50 to 100 per cent in proportion to their value. Beans are distinctly a poor man's food, and we ask that the duty be reduced at least by the amount we recommend.
Based on what we believe the policy of the new administration to be in the line of reducing tariff taxation, we recommend without further comment that currants, cleaned or uncleaned, be reduced from 2 cents to 14 cents a pound; almonds, shelled, be reduced from 6 cents to 3 cents a pound; almonds, in shell, be reduced from 4 cents to 2 cents a pound; filberts, in shell, be reduced from 3 cents to 2 cents a pound; filberts, shelled, be reduced from 5 cents to 3 cents a pound; walnuts, shelled, be reduced from 5 cents to 3 cents a pound; walnuts, in shell, be reduced from 3 cents to 2 cents a pound; figs be reduced from 21 cents to 1 cent a pound; raisins be reduced from 24 to 1 cent a pound.
CANDIED CITRON, ORANGE, AND LEMON PEELS. That the duty be readjusted contingent upon any reduction in the duty on sugar.
Dates that they be made free.
Beans and peas—that the duty be reduced from 40 to 25 cents per bushel.
Glacé fruit or fruit pulps—that the present ad valorem duty be changed to a specific duty (equivalent) of 3 cents per pound.
SPECIFIC VERSUS AD VALOREM DUTIES. We protest against the imposition of ad valorem duties on food products. However equitable such a method may be as applied to particular articles, its application to commodities that are subject to frequent and sudden changes in value work great injustice and hardship on the importers.
The present law provides that articles covered by an ad valorem duty shall be entered in the custom house at the market value prevailing on the day of shipment in the country of origin, regardless of
the actual purchase price. The importer is seldom in a position to state with any degree of accuracy such market value, and acting in entire good faith and on his best judgment he may undervalue a shipment that will subject him to a heavy penalty, or overvalue it, as the case may be, so putting him to a great disadvantage as compared with his competitors.
Great discrepancies in the actual costs are inevitable, due to changes in
crop conditions. Early indications may point to a full crop, while later in the season unfavorable weather may change the outturn to a short one. The importer who may have a favorable contract executed early in the season is mulcted of his profit under the present system of valuation based on that of the day of shipment. Market values at a particular time are largely a matter of opinion, and as opinions differ so will valuations. Under the present system of assessing ad valorem duties an importer is forced to guess as to the opinion of the Government's appraisers, and if he makes a bad guess, no matter how honest he may be in his attempt, he is heavily fined.
We call attention to the fact that France and Germany, both having long and wide experience in the administration of customs laws, have found it practical to impose specific duties exclusively.
We submit that the method of determining valuations outlined above is intolerable and can be corrected by a change to specific duties, which will have the added advantage of greatly simplifying the customhouse administration, decreasing the Government expense, and without necessarily reducing the Government revenue.
Mr. NEEDHAM. You do not ask for any reduction on raisins?
Mr. NEEDHAM. I notice you stated that you could get your money back by adding the duty to your price.
Mr. PARSONS. Yes.
Mr. NEEDHAM. How do you account for the fact that raisins have been sold in California this fall for less than the duty?
Mr. PARSONS. I was speaking about imported raisins. There is no duty on California raisins.
Mr. NEEDHAM, Is it not a fact that California raisins sold this fall for less than the duty ?
Mr. PARSONS. Yes, sir; the duty is 24 cents, and the California raisins sold, in the sweat box, for less than 2 cents.
BRIEF ON THE FIG, PRESENTED BY FRED A. HINES, REPRE
SENTING THE CHAMBER OF COMMERCE OF FRESNO, CAL. Of all the fruit industries of California, not one presents the unique position that is occupied by that of the fig. For years the industry remained practically at a standstill, largely because the figs produced in California were of far inferior quality to those imported, and in consequence of this, never entered into competition with this delectable food article from Smyrna; which has practically held a monopoly for the sale of its figs, not only in the United States, but throughout the world.
Growers of fruit fully appreciated the fact that they were at a decided disadvantage in marketing their figs because they did not compare with the imported fig in quality: It was generally considered that å section of California, Arizona, New Mexico, and Texas possessed soil and climate conditions which would permit the growing of figs to the best advantage providing the same variety could be introduced into the United States as was grown in Smyrna.
The attempt to bring this about was instituted by private parties, the first importation of cuttings being made in 1882 at a very heavy expense, and as these trees never gave any results for reasons that were not fully understood at the time, another private party, at a very heavy outlay, made another importation of cuttings in 1886, but these trees also failed to produce fruit just as the previous importation had done, until finally, in 1900, a little insect called the blastophaga grossorum, without which the Smyrna fig can not be grown, was successfully established in an orchard in the San Joaquin Valley. It was not until in 1901 that the first genuine Smyrna figs were grown on a commercial scale, and those were pronounced by experts to be fully equal to the imported article. The same conditions which have prevailed with all our fruit industrial development obtained in the fig industry which gives promise to develop into one of the great fruit industries of the West.
In the beginning people were slow to plant without greater experience as to results, and it is only within the past few years they have realized that the blastophaga gros. sorum has become thoroughly acclimated and that the future of the Smyrna fig in this country is assured commercially, and, provided it can be profitably cultivated, the industry will progress with rapid strides. This is proven by the fact that since the raise in the tariff four years ago more than 4,000 acres have been planted.
The United States imports annually about 10,000 tons of Smyrna figs, practically half the output of Smyrna, Asia Minor, while in a period extending over 10 years California's output has never exceeded 5,000 tons, and as a rule it has been less than that. The white and black figs generally grown were not up to the standard of quality of the imported fig, and although they were sold on the market at 40 per cent to 50 per cent less than the imported fig, and even with the large tonnage imported annually, the price was maintained at from 20 to 25 cents per pound for the Smyrna fig.
It is quite evident that the only possible manner in which this price will be reduced to the consumer will be by encouraging the planting of this fig in this country. In the event the duty is removed entirely from imported figs, it would not have any tendency to reduce the price of the fruit, for it is only natural to inier that without competition the price will remain as it is, or even go higher.
Now that it is possible to secure capital for the planting of groves, and that there is a tendency of growers, large and small, to engage in this new industry, which has such a promising future, it would seem too bad that the very prop on which it stands should be removed.
A fig orchard does not come into anything more than ordinary good bearing until it is six years old, so that must be borne in mind that a grower must have returns from his product far above those which might be expected from a farm devoted to raising annual crops from the beginning.. After an orchard comes into bearing the actual expense of handling the crop is in the neighborhood of $20 per ton. The actual expense of cultivating, pruning, irrigating, and fertilizing is $20 per acre. At the least calculation a fig orchard at six years of age is worth not less than $250 per acre; figuring a reasonable rate of interest, together with the overhead charges, an additional $20 per acre would be added. From the figures given above it will be seen at a glance that the actual cost of delivering the figs to the packing house is 3 cents per pound.
At all seasons of the year our labor costs twice as much as it does in Smyrna. During the harvesting season the wages are four times greater than they are in the great fig districts of the Aleander Valley, Asia Minor, and the same condition exists in our packing houses where the figs are finally prepared for market.
It is only within the last few years that the United States Government took active steps against permitting the importation of any Smyrna figs, due to the uncleanly methods which were followed in Smyrna in preparing the fig for market. These have been very largely corrected now, but it was not until our Government instituted proceedings that any attempts were made by the Turks to change their methods, which have practically been the same over a period of many years, and would not have been altered to-day had forcible means not been resorted to against the Turks, absolutely prohibiting the entry of their product into our markets.
There is not a farm, large or small, in the great interior valleys where the fig can not be grown to advantage. With the completion of the Panama Canal and the large influx of people from countries adjoining the Mediterranean, additional impetus will be given to this industry, for it will give employment to children during the harvesting season, thus making it possible for the farmer to harvest his fig crop without the aid of outside help.
The fact that the figs drop from the trees of their own accord and do not have to be gathered makes it possible to give employment to children during their vacation period, which is the time in which the fig crop is being gathered.
The necessity for continuing the duty of 21 cents per pound on figs, or even advancing it still higher to encourage the development of the industry more rapidly, is evidenced by the fact of the high prices at which the imported figs are sold in the markets to-day and which will unquestionably continue unless they are regulated by the competition of the home product.
The withdrawing of the duty at this time would have the immediate effect of causing a cessation in the planting of fig orchards and in removing the competition which will eventually regulate prices.
There is no question that enough figs can be produced in the United States not only to supply the demand of our own markets, but to make us exporters of figs as well if proper encouragement is given growers to engage in this industry.
Undernoted, we quote a few figures bearing directly on the conditions, cost, and the profits obtainable from the fig.
At the present time we have 5,000 acres in bearing in California, 4,000 acres not yet in bearing, and with a retention of the tariff as it stands, or making it even higher, a great impetus will be given to still further the planting and developing of the industry. The curing of the crop, and delivering it on the cars in bulk, or in what is known as sweat boxes, in which the figs are dumped loose, is $20 per ton of 2,000 pounds, or 1 cent per pound.
To make this matter somewhat clearer, we would explain that the grower and packer of figs are not the same. The figs are sold just as they come from the drying grounds to the packer, who puts them up in merchantable condition for market. This adds to the grower's cost 24 cents per pound, which makes the actual cost for placing the figs f. o. b. cars in California 37 cents per pound. To this must be added the freight charges of 14 cents per pound.
A strong reason for retaining or increasing the tariff on the fig is the fact that the output of the improved article so far does not exceed 2,000 tons, or about one-fiftn part of the quantity imported from Turkey, which shows the vast opportunity there is for developing this great industry, which if once destroyed will mean the loss of competition and the certainty of higher prices being charged for an article less sanitary and no better in quality:
Figuring on an average production of 1 ton to the acre, the actual profits to the grower over the cost of cultivation would be $10 per ton, the average selling price being in the neighborhood of $70 per ton; cost of cultivating, $20; cost of harvesting, $20; interest, etc., $20; making a total of $60 per ton for expense. The output during the past two years has been from 8,000,000 to 10,000,000 pounds annually of all varieties.
Let us see what the effect would be if the tariff on figg was taken off. In the first place, the Government's income would be reduced $500,000 annually; 20,000,000 pounds, at 24 cents per pound. Then, again, it would absolutely stop the further planting of the trees, which would give the importer and a foreign country a monopoly of the Smyrna fig industry and take employment from thousands of working people. I can hardly see how that would help any of the people of the United States, except the importer. My individual case will illustrate how we feel about it. Two years ago and last year I planted 360 acres of Calamyrna fig trees, which will come into bearing in 1915 and 1916. During the past summer and fall I prepared-plowed and leveled—300 acres more, at a cost of $5,000, for planting to figs this month. In view of the uncertainty regarding the tariff I delayed the palnting of fig trees until next planting season and sowed the 300 acres to red oats for hay, and now the best that can happen I have lost a year. As to the beneficial result of the tariff, I will call your attention to what it has done for the raisin industry. I can remember when we had to pay 25 cents per pound, and even more, for raisins, they all being imported. Then the Government put a tariff on them. California got busy, and to-day Fresno County alone is producing 100,000,000 pounds a year, and you can go into any grocery store and buy a good quality of raisins for from 5 to 10 cents per pound. And if you take the duty off that commodity, I tell you the raisin growers will be obliged to pull up their vines or make other use of the grapes, as the price this year is 27 cents per pound and the duty is 2 cents.
I use this simply as an illustration, and I am satisfied that the same result can be brought about in the fig industry if you will only give us time to get started. But we must have at least the protection we have now, and if you made it 3 cents the production will increase all the more rapidly. I thank you for your courtesy.
FRED A. HINES, Representing Fresno Chamber of Commerce, Fresno, Cal.