PARAGRAPH 290-WOOL GREASE.

Amount of degras made by various firms in the United States we estimate at from 17,000 to 18,000 barrels per annum.

Actual cost of manufacturing degras.

[NOTE. It takes three-fourths of a pound of acid to produce 1 pound of degras.

Or cost of production, $2.485 per 100 pounds of degras or 2.485 cents per pound of degras.

Mr. HARRISON. You appreciate, of course, that in the chemical schedule which passed the House during the last session sulphuric acid was put on the free list?

Mr. HARTLEY. If imported for agricultural purposes, I think, sir. Mr. HARRISON. No, that is the present law. We included sulphuric acid of all kinds and put it on the free list, so that your raw material, under another schedule, is to go upon the free list, if it should be adopted and become law?

Mr. HARTLEY. Of course, that would help us. However, conditions attending the transportation of sulphuric acid entail a tremendous expense. It has to be shipped in iron drums, and the cost of returning those drums when empty to England is very considerable. Or, if you attempt to import the acid in very large glass bottles the danger of breakage is such that I do not think it would be admitted in that way.

Mr. HARRISON. Your argument was, as I understood it, that your raw material was taxed too much, at a higher rate than your finished product, and you wanted to correct that, and I wanted to let you understand the situation.

Mr. HARTLEY. Yes, I am glad to know that.

We had an accountant to go over our books, and this is the result of his examination:

BOSTON, January 10, 1913.

I hereby certify that I, H. W. Loveland, have examined the profit and loss account of the dégras plant of Harry Hartley & Co. for the past 11 years, since the plant was started, and find the account shows a loss of $34,848.98. These figures include depreciation, but do not include interest on the cost of the plant.

COMMONWEALTH OF MASSACHUSETTS,

County of Suffolk, City of Boston, ss:

HERBERT W. LOVELAND.

Personally appeared before me this 10th day of January, 1913, Herbert W. Loveland, and made oath that the facts as stated above are true and correct to the best of his knowledge and belief.

[SEAL.]

Mr. JAMES. Is all your machinery imported?

GEORGE P. WILDER,

Notary Public.

Mr. HARTLEY. Yes, sir. We have hydraulic presses, and this being a new business the machinery is not made in this country for the requirements of this particular industry.

PARAGRAPH 290-WOOL GREASE.

Mr. JAMES. Will you give us about what percentage of the total consumption of wool grease in this country is manufactured in this country?

Mr. HARTLEY. About one-third is manufactured in this country. I think there is about twice as much imported as we manufacture. Of course, if it could be made at less cost, or even at a slight profit, its manufacture in this country would increase two or three times. Manufacturers have been to look over my plant, and when it was explained to them and they saw the extent of it, and realized that I was losing money, they said of course they would not go into the business. The plant covers about 4 acres of ground, and then we have to have another 8 acres on which to dump what we call sludge. It is quite a complicated thing and has caused us more, considerably more, trouble than running our mill. Considering that it is a laudable enterprise we are engaged in, we think we ought at least to get cost price.

We scour every week 320,000 pounds of wool. Out of the 600,000 gallons scouring liquor used in scouring the wool we extract 200,000 pounds, or nearly 100 tons per week, of sludge containing manure, grease, alkali, sand, and ammonia. This sludge is dried out by us, and the farmers use it for fertilizing. If we had no degras plant, all this would go into the river.

Cost of vitriol in England, 43 cents per 100; duty on vitriol is 25 cents per 100, or 60 per cent ad valorem.

Mr. HILL. I would like to ask a question, not exactly bearing on the degras. You are in the wool-scouring business?

Mr. HARTLEY. Yes, sir.

Mr. HILL. And you say you scour 320,000 pounds of wool a week? Mr. HARTLEY. Yes, sir.

Mr. HILL. Do you scour it for yourselves or for other people?

Mr. HARTLEY. For ourselves.

Mr. HILL. You know what it costs to scour wool?

Mr. HARTLEY. Yes, sir; including labor, materials, and everything. Mr. HILL. What would be the entire cost if I were to bring 100,000 pounds of wool to your establishment to be scoured?

Mr. HARTLEY. We should charge you about 75 cents per 100 pounds, or three-fourths cent per pound.

Mr. HILL. As a matter of fact, in round numbers-I do not care to know what your profit is-what is about the net cost of scouring wool?

Mr. HARTLEY. It would be about 6.1 mills per pound, or a little over one-half cent per pound.

Mr. HILL. I am very much obliged to you. That is all.

Mr. HARTLEY. I thank you, gentlemen.

TESTIMONY OF FRANKLIN W. HOBBS, TREASURER OF THE ARLINGTON MILLS, BOSTON.

The witness was duly sworn by the chairman.

Mr. HOBBS. I appear on the same subject, wool grease, and will simply outline the matter and submit a brief giving all details.

As an American manufacturer of "wool grease, including that known commercially as degras or brown wool grease, crude and not

PARAGRAPH 290-WOOL GREASE.

refined or improved in value or condition," I respectfully and earnestly request you to increase the duty now levied on this product under paragraph 290, Schedule G, of the tariff act of August 5, 1909, from one-fourth of 1 cent per pound to one-half of 1 cent per pound.

Wool grease, as its name implies, is grease that is taken out of wool and which is found in all wool as it comes from the sheep's back at shearing. It is used by tanners for a filling for hides, by cordage manufacturers, and in combination with other greases for sundry other purposes.

The domestic production of wool grease amounts to about 17,000 barrels or 6,500,000 pounds per year, and the importations of crude grease for the past three years have averaged fully 12,500,000 pounds per year, so that the total consumption of the United States is about 19,000,000 pounds annually.

The present tariff law levies a duty of one-quarter of 1 cent per pound on crude and one-half of 1 cent per pound on refined wool grease. The imports of crude grease under these duties have been about 65 per cent of the total annual consumption of the United States, and of the total imports of crude and refined grease, crude grease covered over 83 per cent of the imports for the years 1911 and 1912 and covers practically the entire domestic production.

The prices for this commodity have been so low that the American manufacturer has been compelled to sell his wool grease at a loss or at bare cost.

There are two principal methods of recovering this grease, one by the use of naphtha, by which the grease is removed from the wool before it is washed, and the other by means of the so-called sulphuricacid process, by which the grease is recovered from the water used to wash the wool. Both of these methods involve considerable expense.

Under the tariff act of July 24, 1897, paragraph 279 of Schedule G, the duty on "wool grease, including that known commercially as degras or brown wool grease," was fixed at "one-half of 1 cent per pound" and no distinction was made between the crude and the refined product.

The tariff act of August 5, 1909, lowered the duty on the crude product from one-half of 1 cent per pound to one-fourth of 1 cent per pound, but left the duty on the refined product unchanged at one-half of 1 cent per pound.

The imports of wool grease or degras entered for consumption into the United States for the past five years, as shown by tables compiled from the reports of Commerce and Navigation of the United States, are given in the following table. Refined and crude grease were not separated until the tariff act of 1909 went into effect and different rates of duty were levied.

PARAGRAPH 290-WOOL GREASE.

Amounts and values of imports of wool grease or degras entered for consumption, compiled from the reports of commerce and navigation of the United States.

The following table shows the actual production and average cost of making crude wool grease by the Arlington Mills and the actual sales and averaged prices received for the same:

Wool grease made and sold by Arlington Mills, five years, 1908-1912.

These figures show conclusively that the sale of this commodity is already on a highly competitive basis. This is indicated by the fact that the imports represent about 65 per cent of the entire amount consumed in the United States, and by the further fact that the American manufacturer can not sell his product at a profit.

If the American manufacturer can not recover and dispose of his wool grease at a profit, he will have to throw it away as waste.

This would represent a direct economic loss, both to the manufacturer and to the community. Incidentally, the disposing of such a waste product by dumping it directly into rivers and streams, as would have to be done in some localities, or indirectly, emptying it into such rivers and streams through public sewers, results in more or less pollution of such rivers and streams, which could be prevented if such grease could be recovered by all of our manufacturers, instead of by only a few, as at present. It stands to reason that they will not do this indefinitely without a profit.

From every point of view, we feel that this product should not be wasted, but owing to the higher cost in the United States of all materials and labor, the cost of recovery of this product, as in the case of many other products, is much greater in this country than abroad.

PARAGRAPH 290-WOOL GREASE.

The ad valorem equivalent of the present duty on imports for the year 1912 was 12.78 per cent on crude grease and 13.42 per cent on refined grease, as shown by the foregoing table from the reports of Commerce and Navigation. The duty is actually too low to enable the American manufacturer to recover the wool grease and sell it at a price which will pay him for its recovery. The present rates are on a lower basis, even, than that commonly recognized as a purely revenue basis and can not, therefore, be classed as protective duties from any point of view. These considerations lead us to urge upon you most emphatically the desirability of restoring the duty as we request-from one-fourth of a cent per pound to one-half of a cent per pound on crude grease. The amount of duty which we request can certainly be neither a hardship nor a burden to the American consumer, but small as it is it practically means the difference to American manufacturers of recovering this grease or letting it go to

waste.

I believe that public policy justifies the increase requested, both as a revenue measure and because its maintenance will enable progressive manufacturers who have heretofore tried to devise some means of recovering and utilizing this grease, to continue to do so, and will induce other manufacturers who have heretofore allowed it to go to waste, to put in plants for its recovery. This must inevitably result in direct public benefit through an increase in revenue, and through saving a product which would otherwise be lost. The purification of our streams and rivers, which will necessarily follow, is also certainly worthy of consideration.

Mr. JAMES. Is the most of your machinery imported?

Mr. HOBBS. The machinery we use is made in this country.

Mr. JAMES. Would you have some machinery to import with a duty less than 45 per cent?

Mr. HOBBS. No; the machines used in our process are made in this country, and would be.

Mr. NEEDHAM. Is the process you use, naphtha, less expensive than sulphuric acid?

Mr. HOBBS. It is a little more expensive if anything, but about the same. Our figures are very similar, showing a cost of something over 2 cents per pound.

Mr. HILL. How much grease would you get out of 1,000 pounds of wool?

Mr. HOBBS. Anywhere from 7 to 10 or 12 per cent, depending upon the kind of wool.

Mr. HILL. It would not pay to have a small plant?

Mr. HOBBS. I think not. One ought to have a reasonably goodsized establishment to make it pay.

Mr. HILL. What would be, within reason, the smallest amount of material you could scour to make it pay to put up an establishment? Mr. HOBBS. Well, that is a difficult question to answer without having the figures, but it would have to be a reasonably large amount I should think. Oh, say, 100,000 to 200,000 pounds per week surely would be necessary.

Mr. HILL. Then securing the by-product would not have any appreciable effect upon mills in regard to the process of scouring?