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PARAGRAPH 295–SALT.

charged for the salt itself at the plant, and the average freight rates on salt from plants to destination are in excess of the prices received for the product at the works.

In conclusion, the ultimate consumer would not benefit, directly or indirectly, by any reduction in the tariff, and the present duty should not be reduced or removed for the following reasons:

(1) There is absolutely no demand from either the large or small consumer for any reduction of the duty. If there is any demand, it comes from the importers and representatives of the British Salt Union.

(2) The present tariff is not burdensome, being less than 5 cents per capita per annúm on the total consumption of salt, and but a fraction over 1 cent per capita per annum on the consumption for household or domestic purposes.

(3) Applied to the consumption for household or domestic use, the saving by reason of elimination of the present duty could not possibly be divided or distributed so as to affect the retail price on the very small quantity purchased at any one time by the individual householder.

(4) As in the past, any fluctuation in prices charged by the manufacturer to meet competitive conditions would be absorbed by the middleman, viz, the jobber, wholesaler, and retailer.

(5) The salt expense entering into the cost of other food products and manufactured goods is relatively so small that it does not affect the selling price of same to the public.

(6) Any reduction in the duty on salt can only do harm to the industry in this country, resulting in loss of capital employed and an enforced reduction in wages of the employees.

In view of the facts herein presented and in the absence of any legitimate demand for such reduction, we respectiully submit that it would be unjust and unwise to reduce or remove the present tariff.

International Salt Co. of New York, Scranton, Pa.; Retsof Mining Co.,

Retsof, N. Y.; Genesee Salt Co., Piffard, N. Y.; Le Roy Salt Co.,
Le Roy, N. Y.; Watkins Salt Co., Watkins, N. Y.; Rock Glen Salt
Co., Rock Glen, N. Y.; Remington Salt Co., Ithaca, N. Y.; Worcester
Salt Co., New York City; Avery Rock Salt Mining Co., Avery Island,
La.; Myles Salt Co. (Ltd.), New Orleans, La.; Morton Šalt Co.,
Chicago, Ill.; Ohio Salt Co., Wadsworth, Ohio; Wadsworth Salt Co.,
Wadsworth, Ohio; Union Salt Co., Cleveland, Ohio; Cleveland Salt
Co., Cleveland, Ohio; Colonial Salt Co., Akron, Ohio; Onondaga Coarse
Salt Assn., Syracuse, N. Y.; Buckley' & Douglass Lumber Co., Man-
istee, Mich.; Stearns Salt & Lumber Co., Ludington, Mich.; Delray
Salt Co., Detroit, Mich.; Michigan Salt Assn., Saginaw, Mich.; Dia-
mond Crystal Salt Co., St. Clair, Mich.; Detroit Rock Salt Co., Detroit,
Mich.

BRIEF SUBMITTED BY C. M. GILBERT & CO., SAVANNAH, GA.

SAVANNAH, Ga., January 18, 1913. The COMMITTEE ON WAYS AND MEANS,

Washington, D. C. GENTLEMEN: In regard to the matter of duty on salt, Schedule G, paragraph 291, I urge the putting of same on the free list.

I wish to call your attention to the following facts obtained from the Bureau of Statistics of the Department of Commerce and Labor.

For the year ending June 30, 1912, the imports of salt were:

Quantity.

Ad valorem.

Duty.

Value.

Duty.

Founds.
60,429,571
127,800, 089
101,851,807

$180, 678, 06
111, 223. 93
87,637. 73

$66, 472. 56
89, 460.06

36. 79
80. 43

In bags, sacks, barrels, and other packages, 11 cents per

100 pounds....
In bulk, 7 cents per 100 pounds.
Used in curing fish, remitted.

Total.
Refunded on salt used in curing meat exported.

Net amount duty received..

290,081,467
26, 254, 432

379,539. 72

155.932. 62
26.661. 65

129, 270.97

PARAGRAPH 295–SALT.

Value of salt imported in bulk on which duty was paid 127,800,089 pounds, $111,223.93; equals 63,900 net tons, at $1.74 net ton.

The above shows total importations, 145,041 net tons, of which was used, for curing fish, 50,926 net tons; for curing meat, exported, 13,127 net tons; for other purposes, 80,988 net tons; total, 145,041 net tons, 44 per cent of which had the duty remitted.

There was exported from this country for the fiscal year ending June 30, 1912, of domestic salt produced in the United States, 55,504 net tons.

The statistical records of the progress of the United States for the last 30 years show an almost uninterrupted increase in the annual production of salt, which increase continued each of the years 1895, 1896, and 1897, when salt was free.

The production of salt in this country for the calendar year 1911 was 31,183,968 barrels of 280 pounds net; value, exclusive of cost of packages, $8,345,692, which equals 4,365,755 tons at value of $1.91.

The production of domestic salt, calendar year, 4,365,755 tons; amount of salt imported, fiscal year, 145,041 tons; total, 4,510,796 tons, of which the amount imported, including salt on which the duty was remitted, was 3.22 per cent.

The valuation of the production of salt in this country is shown to be $1.91 per ton; of bulk salt imported, $1.74 per ton; duty on bulk salt, $1.40 per ton; ad valorem rate of duty on bulk salt, $80.43 per cent.

The importations of salt for the fiscal year ending June 30, 1907, were 165,318 net tons, and the net amount of duty received $151,909.50.

The importations of salt for the fiscal year ending June 30, 1912, were 145,041 tons, and the net amount of duty received $129,270.97.

The reduction of the duty of 1 cent per 100 pounds does not seem to have stimulated the importation of salt, but there is shown to be a falling off, while there has been an increase in the exportation of domestic salt,

In the improvements in machinery for making salt this country has led the world. Machinery is now made for the manufacture of salt with the multiple effect varuum pans that greatly decrease the cost of production. Such a manufacturer can have no fear of imported salt.

The mines in Louisiana produce salt probably as low as anywhere in the world. The cost of salt in this country and England is probably about the same.

What salt we have imported from England to our southern cities has been by steamers at rates of freight that were under normal.

Sailing vessels are now practically out of this trade. Any considerable increase in importations would cause us to have to pay the usual rates of freight, such as are paid for kainit, which has to be imported, which are several shillings per ton higher than what we have been paying for the limited amount of salt we have been importing.

Salt from Liverpool has to be shipped to Liverpool from works some little way in the interior. There are dock dues, mats have to be furnished to line the sides of the vessels in which bulk salt is shipped, and cargo shipments have to be stored at the port of entry, while shipments from the works in this country are largely made in car lots direct to the parties' warehouses, avoiding all port charges, and the railroads sometimes make special rates for points beyond that are lower than for delivery to points for local delivery. The freight from across the water is some protection to the manufacturers of this country. With free salt its marketing is such a question of transportation that our outlet must be limited largely to the ports and local tributary thereto, and the American manufacturer would not be driven out of even this territory and would only be affected in a limited part of his territory.

As the present importations are only about 3 per cent of the consumption of the country, if it should be that the importations should double under free salt, it would only amount to 6} per cent of the consumption. I doubt if there would be such an increase, and the increase might be quite small.

Our southern cities are largely engaged in the exportation of cotton, the exports of which, I understand, exceed in value that of any other article exported from our country. It is only fair that we should get some return shipments of salt, and it is not right that legislation should be with the view of prohibiting such shipments.

The justice of a reduced duty on salt was even acknowledged by the Finance Committee of the Senate, Mr. Aldrich, chairman, in the making up of the PayneAldrich bill in 1909, when his committee proposed a reduction of 2 cents per 100 pounds, and so passed the Senate, but which was cut down in the conference committee to 1 cent per 100 pounds.

I think the domestic manufacturer has more to fear from competition on account of the increased production in this country.

PARAGRAPH 295–SALT.

I would not want him ruined in his business hy free salt, and if you can conclude from your investigation of the matter that this might be the result, I would ask that you hesitate before proposing such action, and would rather have some duty on the article. Respectfully, yours,

Chas. M. GILBERT,

C. M. GILBERT & Co.,
Salt Merchants, Savannah, Ga.

STATEMENT SUBMITTED BY THE STERLING SALT CO., OF

NEW YORK, RELATIVE TO THE DUTY ON SALT.

To the COMMITTEE ON WAYS AND MEANS,

Washington, D. C. GENTLEMEN: The mine and salt works of the Sterling Salt Co. are located at Cuylerville, Livingston County, N. Y., about 30 miles south of Rochester, and this statement is respectfully submitted to show that if any reduction is made in the duty on salt that it should only be a very slight reduction.

The product of this company is a coarse salt, which is used very extensively for the manufacture of chemicals, for the manufacture of ice cream, the various uses of the packing houses, for salting fish, making brine or pickle for any purpose, and for many other commercial uses. More than two-thirds of our product is shipped into New England, New York, Pennsylvania, Virginia and Maryland; the balance is shipped principally to points in Ohio, Michigan, Illinois, and Indiana, a small amount being shipped by Lake vessels to Duluth, Milwaukee, St. Paul, etc. Our principal markets east of Buffalo are the large seaboard cities, including Portland, Boston, Providence, New Haven, New York, Philadelphia, Baltimore, and Norfolk, and cities adjacent and tributary to them, such as Salem, Lowell, Lawrence, Springfield, Hartford, Yonkers, Newark, Trenton, Wilmington, Richmond, and Washington.

The imported salts which compete most directly with our product are the coarse solar grades shipped from the West Indies and from the Mediterranean ports of Italy, Spain, and Portugal. In both of these sections cheap negro or native labor is employed, and the hot tropical climate materially assists to produce a very cheap and satisfactory grade of salt. We do not have the exact figures as to cost of labor at these points, but consular reports and other authorities justify us in stating that it does not exceed 60 or 65 cents per day.

The statement which we submitted to the Ways and Means Committee on November 19, 1908, showed that we employed 205 men and that our average wages amounted to $2.03 per day. We are now employing about 250 men and our wage average is $2.14 per day, a considerable part of our force being skilled or semiskilled labor. As labor is the principal expense in mining and preparing salt, the great advantage of the foreign producer is apparent. The supplies entering into our cost of production consist of coal, powder, timber for shaft and mine support and for brattices, rails, ties, engine-room and electrical-equipment supplies, burlaps for packages, etc., all of which have steadily advanced during the past few years.

We operate a mine, and our product is produced, broken, screened and prepared by methods very similar to those used in the production of anthracite coal. Our costs, to the best of my knowledge, approximate those of mining anthracite coal, with the exception that a relatively small production increases our interest charges and because salt must be prepared and stored so that it is thoroughly protected from the weather. Our handling, storage, and shipping expenses are somewhat in excess of those on coal

The method of manufacture of our foreign competitors is quite different. In the Mediterranean and Caribbean Seas, where their plants are located, the percentage of salt in the sea water is materially greater than off our North Atlantic coast, and the water or brine is evaporated by the dry trade winds and the hot tropical sun, thus producing what is commercially known as solar salt. This salt is most generally sold as coarse or rock salt, but it can be and in former years was very extensively ground and used for the purposes of ordinary domestic salt. Pumping at these foreign points is largely done by windmills and the labor performed by the natives or negroes. It is impossible for us to give you authentic figures on the cost of producing salt at these points, but we have been informed by authority which we believe to be reliable that it is materially less than $1 per ton of 2,000 pounds. The average selling price for export to the United States is about $1.40 per ton, which, considering that the plant or equipment represents a very small outlay, shows the producer a fair profit on the business.

PARAGRAPH 295–SALT.

A very large part of our product is marketed in the seaboard cities of the Nortb Atlantic. The following table shows the average foreign freight, a fair average cost of foreign salt ex duty, and the freight rate on domestic salt from the nearest point o production to these various ports:

Freight on

Cost foreign Freight on

coarse salt domestic foreign salt.

ex-duty. salt.

Portland.
Boston.
Providence.
New Ilaven.
New York
Philadelphia
Baltimore.
Norfolk..

$1. 60

1. 60 1. 60 1. 60 1. 60 1. 60 1. 60 1. 60

$3.00
3. 00
3.00
3. 00
3. 00
3.00
3. 00
3. 00

$2. SO 2 80 2. 80 2. 80 2 40 2. 40 2 40 2 50

We believe that no argument from us is necessary to satisfy the members of your committee that the American producer must get in excess of $2 per ton for his salt at the point of production in order to keep his plant running, and on the assumption that he is to net $2 per ton at his works, his salt will cost $1.80 per ton at Portland, Boston, Providence, and New Haven, $1.40 per ton at New York, Philadelphia, and Baltimore, and $1.50 per ton at Norfolk-more than a fair average cost of foreign coarse salt.

We concede that the advantage that foreign salt has at the seacoast gradually diminishes as we reach inland points, but as the manufacturing industries which use a larger part of the salt consumed are located at or near the coast, a reduction in the tariff would very seriously and disastrously affect a large part of our business.

The above table shows that $1.40 per ton, or 7 cents per 100 pounds, is reasonably necessary to equalize the advantage that our foreign competitors enjoy.

There are no salt works in the United States located at the seaboard or with navi. gable water connections with the seaboard. In getting our salt to the seaboard the rate per ton-mile exceeds that of our foreign competitors by in some cases 10 to 1, and it does not seem likely that the railroads can reduce their freight rates in view of the constantly increased wages they are paying their employees. A trifling amount of our salt is exported by us into points in Canada adjacent to our point of production. A small amount of salt produced in Louisiana is exported to Cuba, and the records show that some salt from California is exported to Mexico, but the conditions make it impossible for us to export salt in any quantity. On the other hand, our foreign competitors, due in many cases to import duties and in some cases to an absolute proħibition of the importation of salt, enjoy their home market unmolested and ship their surplus to us, selling abroad much cheaper than at home, which principle has, we believe, been criticized and condemned by some of the gentlemen of your committee.

For a very complete statement of the conditions with reference to the salt industry, we would respectfully refer you to the briefs submitted in past years to the Ways and Means Committee. Foreign freight rates are at present a little higher than rates mentioned in many of these statements, but this is about offset by the increased wages which the domestic manufacturers are now paying. Aside from these two items, the statements made in previous years to your committee are substantially in accord with the conditions of today. These briefs show at considerable length that the ultimate consumer would not likely benefit from a reduction of any part or even the whole of the present duty on salt. If the whole of the present duty was deducted in the case of a 3-pound bag, which is perhaps the size package usually bought by the average household, the cost of the bag would be reduced one-fifth of 1 cent. As the denomination of our money would not permit of making this exact reduction, it is quite evident that no reduction whatever would be made.

The Sterling Co. does not, however, produce table salt, and wishing to confine our remarks strictly to our own product would say that a very large percentage of it is sold to the packers, chemical companies, ice cream companies, soap manufacturers, pickle manufacturers, and other large corporations or firms well able to prepare and argue briefs advocating a reduction in the import duty on salt, and the fact that these interests have never made any serious demand for a reduction in the duty indicates quite clearly that they believe they would obtain no appreciable advantage from it.

Except in the case of the packing houses and a few other very large buyers, who buy their salt in large lots and transport it largely by vessel, foreign salt does not

PARAGRAPH 295–SALT. reach the interior of our country. There are practically no farming communities so located that the farmer would benefit one iota from the removal of the entire duty on salt. We can not but feel that putting salt on the so-called " 'farmers' free list,” which was introduced some few years ago, was an action taken without due consideration and without the study that would have disclosed the indisputable fact that the producer would suffer and that the farmer would obtain no benefit whatever. You may ask how we can reconcile these two statemetns, but the explanation is quite simple. A commodity as cheap as salt on which the delivery cartage alone amounts almost to the price received by the producer, can not be profitably distributed or delivered except in connection with other articles, and it must properly and of necessity pass through the hands of the salt jobbers and the wholesale and retail grocers.

If foreign salt can be landed at a lower price than the domestic producer is now receiving from the salt jobbers, he must meet this price or lose his trade. The jobber may or may not reduce his price, but whether or not the wholesale grocer obtains a lower price, there the reduction is sure to end.

A cheap commodity like salt can not be generally distributed by the producer; he must depend upon the wholesale and retail merchants of the country to market his product for him, and while our experience has been that these men make only a reasonable profit on their sales of salt the expense they are put to for handling such a bulky product compels them to charge a price to the ultimate consumer which is anywhere from three to ten times the price received by the producer.

Řecent legislation, particularly State legislation, has been along lines which has materially increased the cost of production. We may mention one item, liability insurance, the cost of which is just three times what it was in 1908.

There is an abundance of salt in this country and it is produced on a commercial basis in at least eight different States. It is found in so many different localities that it would be an impossibility for any group of interests to obtain any monopoly in salt that would exist longer than it would take to develop a new plant. There has never been any general complaint of the cost of the salt, either to the consumer or to the manufacturer using it as one of his supplies. Government statistics show a natural and normal increase in the production of the country, it having increased from 23,849,231 barrels of 280 pounds net (3,338,892 tons) in 1902 to 31,183,968 barrels (4,365,755 tons) in 1911. The value given in 1902 was $5,668,636 (equal to $1.69 per net ton) and the value in 1911 was $8,345,692 (equal to $1.91 per net ton).

When the so-called Payne-Aldrich tariff bill was being prepared, public hearingg were held by the Committee on Ways and Means on the various schedules. The hearing on salt was called on November 19, 1908. A large number of salt manufacturers were present, and three representatives were selected to appear as witnesses and give full information. No one appeared asking for any reduction in the duty. Subsequently two statements favoring a reduction in the duty were submitted to the Finance Committee of the Senate by Messrs. William A. Hazard & Co., of New York, and C. M. Gilbert, of Savannah, Ga. I would respectfully refer your committee to Messrs. Hazard & Co.'s statement, which, though arguing in favor of a reduction, showed conclusively that the domestic producer could not profitably compete without some duty, and this paper advocated 6 cents per 100 pounds on the coarse or rock salt and 4 cents per 100 pounds on salt evaporated by artificial heat; bags, burlaps, or other coverings to pay the same duty as if imported separately.

The purport of Mr. Gilbert 's statement seemed to be to show that the duty then collected, of $1.60 per ton, on salt in bulk is equivalent to an ad valorem rate of 907 per cent. As already explained in this paper, practically no salt is consumed at the point of production, and the freight averages about as much as the cost of the salt. It is somewhat misleading to figure the percentage on a cost that the public has practically no knowledge of, and if figured on a fair average cost at the principal points of consumption, 7 cents per 100 pounds would equal an ad valorem rate of about 35

In 1909 the duty on salt in bulk was reduced from 8 to 7 cents per 100 pounds, a reduction of 124 per cent.

To sum up, our reasons for asking for a retention of the duty on salt are

First. That the rate of wages at the point of production of competing foreign coarse salt averages about 60 cents per day as compared with our average of $2.14 per day.

Second. That the natural advantages that our foreign competitors have for evaporating sea water by the hot tropical sun and dry trade winds more than offsets the advantages which we derive from the use of modern high-priced machinery.

Third. That the relatively low ocean freight rates enable our foreign competitors to transport their product several thousand miles and land it at any point on our coast

per cent.

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