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PARAGRAPH 290-TALLOW. was free tallow it would have a steadying influence upon the price and would enable us to obtain one of these basic materials by importations, if the prices warranted.

Let us look at it from another point of view. Has tallow been a revenue producer? If it had been a large revenue producer I might understand how this committee might hesitate to take it off, because it would seek first what could be taxed in its place, but the fact is the imports of tallow have been, as compared with the exports, very small indeed. For instance, in the year 1912 there were 347,837 pounds imported and 39,491,000 pounds exported. Now, turning to the revenues produced from the importations of tallow, you will find that from 1905 to 1912 the average for the eight years has only been $3,576.70 a year, so that it is a negligible quantity as a revenue producer.

Let us examine, for a moment, what has been the history of this legislation. Under the law of 1883 the duty upon tallow was 1 cent a pound; under the law of 1890 it was 1 cent a pound; under the law of 1894 it was put upon the free list; under the law of 1897 the duty was increased to three-fourths of a cent per pound, and under the law of 1909 it was reduced to one-half cent a pound, where it now is. When tallow was put upon the free list, instead of having these small imports, we find that in the years 1895 and 1896 there were large importations of tallow; in 1895 they amounted to 8,594,587 pounds, and in 1896 8,262,597 pounds, as distinguished from this 347,837 pounds in 1912, when the duty was one-half cent per pound. In this connection it is very interesting to consider the growth of the animal industry in the Argentine Republic, and to consider the connection between the duties, the present duty on tallow as a diverting force. Argentina bought and sold in the world in 1911 large quantities of tallow. The total tallow produced was 46,076,687 kilos. Not a single pound of this tallow was shipped into the United States, the one-half cent per pound being apparently a perfect barrier and a perfect protection in favor of the home production, or, if it may please the committee, not of an infant industry, but I think we may fairly say, these packers have been conspicuously successful and do not need now the protection which was not originally put on for their benefit, but for the benefit of the small farmer when he did his own rendering or sold to the local butcher. Now, of this 46,076,687 kilos of tallow produced in the Argentine, the United Kingdom received 18,037,120; Germany, 8,703,400; France, 2,586,480; Italy, 4,104,480, and Belgium 3,739,440 kilos. I have not been able to find satisfactory figures in regard to the total production-increased production of tallow in the United States--but they must have been enormous, but in the Thirteenth Census bulletin in regard to manufactures, there is this interesting note on page 62, that the products made and consumed by the establishments which produced them, that is, I should think, the amount of tallow that was produced by the packers and by the packers themselves consumed, because they are also large manufacturers of soap, was, in 1909, 17,709,219 pounds, as against 10,615,271 pounds in 1904, a very substantial increase in five years.

The CHAIRMAN. Your time is up, Mr. Wadhams.

PARAGRAPH 290-TALLOW. Mr. WADHAMS. I will close, if it may please the committee, with just this for your consideration. Common laundry soap, we maintain, is a necessity of life under the standards of living which we set for ourselves in this country. It is the poor man's soap. It is the only soap he has. Tallow is a basic raw material, and in considering upon what the duty should be placed it is respectfully submitted that this tallow, the product of the strong and vigorous industry, namely, the packers, is not an article which should be selected, but that, inasmuch as it enters so largely in its principal use as a raw, basic material in the manufacture of a necessity of life, it is a fair proposition to put it upon the free list, where it was placed in 1894, and when I appear before the committee on the 31st of this month, with your permission, I propose to have a schedule of all the ingredients entering into the manufacture of laundry soap, with the present duties, the duties proposed under H. R. 2182, together with our recommendations, so that all the materials used in the industry may be before the committee at the same time.

I have been obliged to appear at different hearings, because our raw materials appear in different schedules.

Mr. HARRISON. In that connection I will say that when the socalled chemical schedule was before the House I stated to the House a list of the materials which enter into the manufacture of

soap

and showed to the House the rates of duties proposed by this bill in over 90 per cent of the cases showed enormous reductions in the basic materials of manufacturing soap. Tallow is, of course, in the agricultural schedule. We were not revising this schedule at that time.

Mr. WADHAMS. There is no reduction on tallow. There have been reductions proposed in the Underwood bill on certain articles we use, of one-half, three-eights, or one-fourth of 1 cent, but it does not assist us in the burden you place upon us; it does not materially affect the imports, but will raise the prices of other raw materials, although the Average may result, as you state it in the recommendations, but the effect on our trade will not be what that average would indicate.

Mr. HARRISON. You understand tallow was not then under consideration, because that remains under the agricultural list.

Mr. WADHAMS. For that reason I appeal with some confidence that you will recognize now that it should be placed on the free list.

Mr. LONGWORTH. I will ask you whether it is of more importance to have tallow on the free list or these nut oils on the free list?

Mr. WADHAMS. I should rather answer that on the 31st when this whole matter will come before you.

Mr. Hill. Would you have the duty on soap reduced proportionately?

Mr. WADHAMS. We appeared before the committee when Schedule A was under discussion and stated to the committee that we were in sympathy with the reduction of the duties on soap, and did not object, and therefore thought we were entitled to favorable consideration on the raw materials.

Mr. LONGWORTH. When was that?
Mr. WADHAMS. On January 6.

Mr. LONGWORTH. That you appeared before the Ways and Means
Committee to advocate a lower duty on soap ?
Mr. WADHAMS. On January 6.

78959°-VOL 3-13- -64

PARAGRAPH 290-TALLOW. Mr. LONGWORTH. Do you mean of this year?

Mr. WADHAMS. I appeared stating not that we advocated it, but that we did not object to it; that we merely wished to call attention to the position we took on raw materials.

Mr. LONGWORTH. I thought you said that you appeared before us on the free chemical bill. Mr. WADHAMS. No; not before.

WASHINGTON, D. C., January 20, 1919. The CHAIRMAN AND MEMBERS OF THE WAYS AND MEANS COMMITTEE,

House of Representatives, Washington, D. C. GENTLEMEN: This statement is submitted on behalf of laundry soap manufacturers of the United States representing over 75 per cent of the production of common laundry soap.

The item and paragraph concerning which recommendation is made are Schedule G, paragraph 290. The particular item is “Tallow one-half of one cent per pound."

It is recommended that tallow be placed upon the free list.
The reasons for such recommendation are:

TALLOW PRODUCTION IN THE UNITED STATES A VIRTUAL MONOPOLY. Tallow is a basic element in the manufacture of laundry soap. The duty was originally placed upon tallow as a protective measure, the argument being that it was 80 placed for the protection of the interests of our farmers. Åt that time the business of slaughtering cattle and rendering tallow was conducted on a small scale by numerous local butchers and tallow renderers in every section of the country. Since then, however, a complete change has taken place.

The slaughtering of cattle and the rendering of tallow are now and for a number of years have been concentrated in the hands of a few packers who have established branch houses in every principal city of the United States, through which they gather up the rough tallow that retail butchers formerly turned over to the local renderers, and have thereby, to a very large degree, shut out competition and acquired control of the tallow market in the United States.

Under the Dingley bill the tariff on tallow was three-fourths of a cent per pound. With an apparent appreciation that some measure of relief should be given, the duty was reduced by the Payne-Aldrich bill to one-half of one cent per pound. As it is the avowed purpose of the dominant party to correct tariff abuses it would seem particularly appropriate to place tallow upon the free list, as the present duty was imposed as a protective measure affecting an established business having already a practical monopoly. The average price of tallow has steadily advanced during the last ten years.

The inquiry, therefore, must be directed as to whether or not the duty should be mposed upon tallow for the purpose of raising revenue.

THE DUTY ON TALLOW IS NOT A REVENUE PRODUCER.

Statistics show that tallow imports are of small importance compared with the exports of this product. The following tables show the imports and exports for the fiscal years ending June 30, 1905, to 1912, inclusive.

Imports and exports of tallow, 1905 to 1912, inclusive.

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PARAGRAPH 290—WOOL GREASE. From the foregoing figures it appears that we are large exporters of tallow. This should be sufficient reason for the removal of the duty. It is our contention that tallow is not an appropriate article upon which to place a tax for revenue purposes for two reasons: First, tallow is not a revenue producer, as shown by the receipts of the past five years; and, second, it is an important ingredient in the manufacture of a necessary of life. The following are the statistics of the revenue produced for the fiscal years from 1905 to 1912, inclusive: 1905.

$2,086. 44 1906.

6, 811. 24 1907.

3, 181. 24 1908.

2, 285. 75 1909.

2, 737, 00 1910.

4,851.00 1911.

4, 922. 00 1912.

1, 739.00 an average of $3,576.70 per annum for eight years.

While the resulting revenue is wholly insignificant, as shown, the duty nevertheless acts as a material deterrent to would-be importers of the article when the high-perhaps artificially inflated-price of the domestic article would lead soapmakers to resort to foreign markets for relief. In other words, free tallow, even though little be imported, is of material advantage to the manufacturers of laundry soap for the reason that it acts as a check upon artificial domestic prices.

THE DUTY SHOULD NOT BE IMPOSED UPON A BASIC RAW MATERIAL USED IN THE MANU

FACTURE OF A NECESSARY OF LIFE.

The common laundry soap, which is the household soap, is properly classed as a necessary of life, and in the selection of articles upon which duty is to be imposed this should be taken into consideration. The burden of raising revenue should not be placed upon raw materials which enter into the manufacture of such articles. (See brief on duty on soap, Schedule A, dated Jan. 6, 1913.)

Tallow is conspicuously one of the articles found in the tariff schedules which, upon revision, should be placed on the free list. Respectfully submitted.

H. W. Brown of THE PROCTER & GAMBLE Co., Chairman,
W. H. WADHAMS of B. T. BABBITT, Secretary,
L. H. WALTKE of Wm. Waltke & Co.,
J. R. COLLING Wood of Fels & Co.,
F. H. BRENNAN of THE N. K. FAIRBANK Co.,

Committee of National Conference of Laundry Soap Manufacturers.

WOOL GREASE.

TESTIMONY OF HARRY HARTLEY, OF HARRY HARTLEY & CO.,

PROPRIETORS OF THE VICTORIA MILLS, BOSTON.

The witness was duly sworn by the chairman.

Mr. HARTLEY. Mr. Chairman and gentlemen of the committee, we wish to enter a plea for additional protection to a comparatively new industry in the United States which has as its object the prevention of the pollution of our rivers and streams by mill wastes.

Within the last few years mills engaged in the manufacture of wool have erected plants at considerable expense for extracting the grease from wool and cloth washings instead of dumping the grease and dirt into the river, as was formerly their custom.

The Rhode Island Board of Health has frequently complained of the state of many of our large rivers near manufacturing towns, caused by the emptying of dirty water into the rivers by large manufactories.

PARAGRAPH 290_WOOL GREASE.

The extracting of grease from wool and cloth washings is quite an expensive process, and under the present duty of one-fourth cent per pound (equal to only 124 per cent ad valorem) on the grease so produced it has been sold at a loss by all those manufacturers who are now making it.

The grease so extracted has a commercial value of 1.8 cents to 2 cents per pound; but it costs more than this to make it. Consequently the mills now engaged in purifying their mill effluents are doing it at a loss.

This being a new industry in America, we had to bring out the overseers from England, getting a special permit from the customs authorities in Boston to do so, finding it difficult, if not impossible, to get help in this country who understood this process.

We have gone carefully into the profit-and-loss account of our degras plant and find we have lost steadily since we started it. Our plant is one of the most up to date in this country, as we are using all the latest machinery and improved methods, and is quite a heavy investment on which to be losing money steadily. It cost $86,480.70.

The duty on this grease (technically known as “degras”) is onefourth cent per pound, or 12} per cent ad valorem. The Dingley bill gave one-half cent.

Now as we have had to import all our machinery from England, paying 45 per cent duty on it, and are paying twice the wages to our employees in the degras plant that are paid in England, and all our supplies, such as sulphuric acid, coal, etc., costs us twice as much, we think we are entitled to have a duty placed on the degras of one-half cent per pound.

It is made by mills in Europe, and owing to their cheaper labor cost, and cheaper sulphuric acid (see report attached), they can sell it in America at the price of 2 cents per pound duty paid.

If the additional duty of one-fourth cent per pound were imposed, : making the duty one-half cent per pound, the American manufacturers could make about cost price.

This would encourage mills here to erect plants for the extraction of grease from their effluents, thereby purifying our streams. Such a result would immensely benefit the community at large. Under present conditions certain large mills, who at one time intended to erect plants for purifying their water, learning that it entailed a loss, have abandoned the idea, finding it cheaper and easier to continue letting it go into the river unpurified.

We trust, after careful consideration of all the particulars inclosed, you will agree with us that if anything deserves protection this does.

We append a list showing the difference in cost of materials used to manufacture degras here and in England.

Comparison of cost of sulphuric acid, coal, labor, etc., in England and the United States.

United
States.

England.

.hundredweight..

Cost of sulphuric acid.
Cost of labor, per week..
Wages of superintendent per week
Cost of coal (American ton).

$0.90

9. 25 25.00 4.00

$0.83

5.50 10.00 1.83

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