spite of the lowered rate of duty. But in 1917 imports of wash blue were valued at $25,280, the highest value recorded since 1906. This increase, however, was due rather to greatly enhanced prices than to any large increase in the quantity.

Countries of origin.-The imports by countries of ultramarine and of wash blue containing ultramarine are not published in Commerce and Navigation. A compilation made by the Department of Commerce,1 however, shows that in the fiscal year 1914, the last year before the outbreak of the European war, Germany and Great Britain furnished by far the greater part of the imports. In the case of ultramarine, 51.2 per cent of the imports were derived from England, 42.9 per cent from Germany, 2.5 per cent from Belgium, 2.4 per cent from France, 0.7 per cent from the Netherlands, and 0.3 per cent from Scotland. Of the wash blue imported in that year, 51.6 per cent came from Germany, 34.8 per cent from England, 10 per cent from France, and 3.6 per cent from Belgium.

Character. The following statement is quoted from a brief prepared by Mr. F. A. Reichard and published in tariff hearings, House of Representatives, Sixtieth Congress (1909), page 459:

The bulk of what is sold here is made in the United States and is sold from 3 to 10 cents per pound. There are better grades used for artists' colors, for printing purposes, coach and car colors, and in the manufacture of sugar, etc. These are the only grades that can be imported. *

* *

Referring to page 9, it will be noted that the value per unit of quantity of the imports of ultramarine has rarely exceeded 10 cents per pound and has generally been only a little less.

We do not import ultramarine blue for the reason that our trade is principally with paint manufacturers who use mostly cheap or medium grades, selling from 3 to 10 cents per pound, and with a duty of 34 cents per pound (more than the actual selling price of the lower grades) it does not require much acumen to see that the present duty is prohibitive.

PRICES.

There is a considerable spread between the high and the low prices of ultramarine, due to the great difference in quality of the various grades. The prewar price (1914) ranged from 3 to 13 cents per pound for the dry pigment and 13 to 16 cents per pound in oil. The outbreak of the war had little immediate effect, as it was not until late in 1915 that the quotations for this pigment showed any marked increase; but during 1916 the price rose rapidly, due to the greatly increased cost of raw materials, especially soda ash. The increase was greatest in the case of the lower grades, which were quoted in January, 1917, at 20 cents. After the signing of the armistice there was only a slight recession. Quotations in January, 1919, were 14 to 40 cents for dry and 50 to 65 for ultramarine in oil, while in June the quotations were 12 to 40 and 40 to 50, respectively.

TARIFF HISTORY.

The rate of duty on ultramarine blue has been gradually reduced from 5 cents per pound (about 50 per cent ad valorem) in 1883 to 15 per cent (roughly 1.5 cents per pound on the type of material imported) ad valorem in the act of 1913. The only upward movement

1 Department of Commerce, Miscellaneous Series No. 82.

was in the act of 1897, when the duty which had been reduced from 4 to 3 cents per pound in the act of 1894, was increased to 34 cents. But in 1909 it was scaled back to 3 cents and in the act of 1913 it was practically cut in half.

The 1913 act also introduced a radical change in the form of an ad valorem instead of the specific duties that had hitherto been adopted.

SPECIFIC VERSUS AD VALOREM DUTIES.

1

In the various briefs presented in tariff hearings in 1909 and 1913, both manufacturers and importers devoted considerable space to an insistence upon specific duties on this article. It was alleged that the proper appraisal of imports of ultramarine was peculiarly difficult, because of the great number of different grades which can not be distinguished except by an expert. It is claimed that the more expensive varieties do not differ materially in general appearance or chemical composition from the cheaper grades.

The general sentiment is expressed in the following petition, which was presented by Badische Co. and others in tariff hearings (H. R., 63d Cong., 1913, pp. 144–145):

The characteristics which give ultramarine blue its value are the results of its mechanical preparation and are quite independent of its chemical composition. Its value is not readily established by a laboratory investigation; a practical application to the purpose for which it is sold alone determines its value.

Prior to the year 1870 there was an ad valorem duty on ultramarine blue, but the appraisal of the imports caused so much confusion and acrimonious discussion that the rate, at the request of all concerned, was changed to a specific one and has remained so ever since.

We, the undersigned, importers, respectfully petition, therefore, that the duty on ultramarine blue be made specific and not ad valorem.

COMPETITIVE CONDITIONS.

The manufacture of ultramarine in the United States is not handicapped in any way as regards its supply of raw material. Soda salts and sulphur are at least as cheap in this country as anywhere else in the world and are in ample supply. Since it is a furnace operation, the domestic industry also has certain advantages as regards fuel supply. The one handicap, apparently, is the greater cost of labor in this country, and the item of labor forms a larger fraction of the total cost of the finished product in the case of ultramarine than it does in the case of most of the products of the pigment trade.

In this connection the following statements in tariff hearings should receive attention:

TARIFF HEARINGS.

A canvass of paint grinders (consumers) made prior to the tariff act of 1909, elicited 48 replies; 7 favored free entry, 2 favored a specific duty of 2 cents per pound, 2 favored a duty of 33 cents per pound (existing duty under the act of 1897), 1 favored a specific duty of 1 cent per pound, 1 favored 12 per cent ad valorem, and 34 asked for an ad valorem duty of 20 per cent. The extraordinary agreement is explained by the fact that the 20 per cent rate was suggested by Mr. F. A. Reichard who conducted the canvass. It will be noted

1 But see argument of F. A. Reichard below.

that of those that actually suggested a different duty, only one chose an ad valorem duty.

In another brief, Mr. Reichard claimed that the manufacture of ultramarine in the United States is in the hands of a trust, submitting as evidence the full transcript of the testimony under T. D. 28294, G. A. 6636. In this case it was shown clearly that the domestic production in 1907 was controlled or largely controlled by three firms, viz: Heller & Merz, the Ultramarine Co., and, the International Ultramarine Works—all of which are related. Mr. Reichard believed that this "trust" was protected to a greater extent than it was entitled to and that "the duty on low and medium grades is prohibitive." He urged a reduction in the duty so as to permit the importation of ultramarine and "break the monopoly enjoyed by the Ultramarine Trust." His final statement is, A specific duty seems impracticable, owing to the great number of different grades of the article."

Messrs. Heller & Merz (Tariff Hearings, 1913) request that no change be made in the specific duty of 3 cents per pound (under the act of 1909) and especially urge that the duty be specific and not ad valorem because of the wide variety of specialties and prices and the attendant difficulty of appraisement. They further cite the fact that the imports of ultramarine increased 250 per cent in a period of 13 years (1898 to 1911). No reference, however, was made to the fact the imports in 1911 (685,933 pounds) was less than the imports in the year 1895 (818,830 pounds) when the duty was 3 cents per pound and not much greater than in 1894 when 646,170 pounds of ultramarine were imported even with a duty of 4 cents per pound. The following data as regards cost, however, are of interest:

"Our unskilled and semiskilled labor is paid from $10 to $15 per week. Skilled labor is paid from $3 to $4 per day, or from $18 to $24 per week.

"German laborers in ultramarine factories are paid but 50 per cent of the American wages. French laborers in ultramarine factories are paid 63 cents per day or 37 per cent of the lowest American wages. Belgian laborers in ultramarine factories are paid 43 cents per day, or 25 per cent of the American wages.

"The duty levied on ultramarine under the German tariff law, though but 15 marks per 100 kilos, is prohibitive * * *. Official statistics show that the German imports are less than 1 per cent of the German production of ultramarine. The French manufacturer has the benefit of a protective duty of 30 francs per 100 kilos, or 24 cents per pound (?)."

The Standard Ultramarine Co. state that the item of labor bears 50 per cent of the cost of manufacture and that "our wage scale" is "at least four times greater than the same class of labor in some foreign plants manufacturing this article." This brief also emphasizes the difficulty of appraisal and the desirability of a specific rather than an ad valorem duty. A duty of not less than 2 cents per pound is advocated as not working a hardship and at the same time placing the domestic manufacturer on a competitive basis with foreign manufacturers.

Ultramarine-Production in United States-"Official source."

[Figures from "Federal Census."]

In years 1899, 1904, and 1909 the production is included with other pigments prior to 1914; in 1914 the production was 2,698,639 pounds, valued at $222,769.

Ultramarine, dry in pulp or mixed with water -Imports for consumption-Revenue.

Wash blue, containing ultramarine-Imports for consumption-Revenue.

Ultramarine-Prices (wholesale) per pound, in barrels, spot, New York.

[Data from Oil, Paint, and Drug Reporter.]

Ultramarine blue and wash blue (containing ultramarine)--Rates of duty.

This pigment is classified as a pigment not otherwise provided for, but as it is a by-product of ultramarine and has caused some difficulty on appraisal (v., p. 13) the following statement of Mr. F. A. Reichard is presented herewith:

Azure gray blue is imported exclusively by us, no other concern bringing it into the United States, so far as we are aware of. The business in it is new and, as yet, very small, indeed. The price at which it is sold here is about 3 cents per pound, and the injustice of assessing it at the same rate of duty as that charged on goods selling as high as 10 cents and over is apparent.

Azure gray blue is not an ultramarine blue, and is not known commercially as such; it is simply a by-product of the manufacture of ultramarine blue and is not used for any of the purposes for which ultramarine is ordinarily used.

The only data as to the imports of this commodity are those published by the Department of Commerce. These cover the imports during the fiscal year 1914 and include the following items:

Ultramarine blue. The merchandise in issue was held not to be ultramarine blue, but a substitute for ultramarine blue sold to the paper and paint trade.-United States v. Riebe, 1 Ct. Cust. Appls.,

19.

In a decision by the court and invoked by the importer, the merchandise was described as a pigment containing ultramarine blue of a pale blue tint, but not possessing the strength of commercial ultramarine blue. This was held not to be the ultramarine blue of commerce, but dutiable as a pigment under the act of 1897.-G. A. 6636 (T. D. 28294).

Ultramarine blue was declared to differ from a lake in that the blue was produced in the furnace and the lake by saturation.-G. A. 3437 (T. D. 17056). This was under the act of 1894.

1 Miscellaneous Series No. 82.