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Because of the fact that few houses control the manufacture of citric acid in this country protection of the interests of consumers suggests the advisability of a reduction from the present prohibitive rate to one affording better guaranties against monopoly.
Lemon juice.-In line with the arguments for free citrate of lime are those for free lemon juice, an article not produced in this country, used in the preparation of medicinal compounds and of cooling drinks, the consumption of which should be encouraged in the interest of public health, against that of poor and often noxious substitutes.
With a high protective tariff on lemons, depriving the consumer of small means of this healthful commodity, some avenue should be left open to him for getting, during the hot days of summer, the refreshing, thirst-quenching benefits of its juice, while by encouraging the utilization of culls in the manufacture of juice and eliminating them from the fruit market the latter is benefited also to the advantag domestic production.
Boracic acid and borax.—The maintaining on boracic acid of a duty other than for revenue purposes is hardly understandable, considering the natural advantages possessed by this country for its production, averaging yearly about 3,000 tons against a little over 155 tons imported during the fiscal year 1911).
The markedly declining tendency in the importations of this article, used chiefly in the manufacture of glass and as an antiseptic, and at present protected with a duty of 3 cents per pound, equivalent to a protection of about 80 per cent, shows that the reduction of the duty to a more reasonable rate is advisable, and this chamber indorses the proposed rate of three-fourths of 1 cent per pound contained in H. R. 20182, as well as the reduction of the present rate of 2 cents per pound to one-eighth of 1 cent per pound on refined borax.
The production of borax in the United States is almost entirely controlled by one firm, and amounts annually to about 20,000 tons. It is largely used for cleansing purposes, in the manufacture of soap, and in that of glass and earthenware.
Crude borate, of which this country produced 41,434 tons in 1909, should be placed on the free list.
Licorice root and extract.—Licorice root, a raw material not produced in this country and imported chiefly from southern Europe and Asia Minor to the amount of $2,060,561 in fiscal year 1911, is used in the preparation of licorice extract, and the latter is utilized in flavoring tobacco and for medicinal purposes. It should be maintained on the free list as a necessary material to industrial use, identified with the prosperity of an important American industry, and in the interest of consumption of American tobacco.
A specific duty equivalent to 15 per cent on licorice extract would be preferable to one ad valorem, owing to the difficulty of ascertaining the market price of said commodity in the countries of origin.
Sumac and tannic extracts.—The removal of duties on hides and undressed skins, accomplished by the tariff act of 1909, aimed at counterbalancing the increase in the cost of raw materials, due to the fact that production does not keep apace with consumption and the consequent reaction on the cost of leather manufacturers, which has to be paid by the ultimate consumer.
Tanning materials being an important factor in determining the cost of leather, it is evident that they should be relieved as much as possible from fiscal burdens.
The scarcity in the domestic supply of tanning materials will make itself felt in the near future, as the deforestation of the hemlock, oak, and chestnut forests, from which are derived most of the materials now employed in the tannery, proceeds with alarming rapidity.
The importation of tanning materials should therefore be encouraged in the interest of the American tanning industry, and among these is ground sumac, used in the tanning of upper leather.
The duty on ground sumac should be lowered from the present rate of three-tenths of 1 cent per pound, equivalent to about 16 per cent ad valorem, to one-fifth of 1 cent per pound, equivalent to about 10 per cent ad valorem; and the importation of tannic extracts should be encouraged by reason of economy in freight, labor, and waste material in comparison to the raw materials, with tangible reductions in the duties. On sumac extract, instead of the present rate of five-eighths of 1 cent per pound, the duty should be fixed at three-eighths of 1 cent, and on chestnut extract reduced from the present rate of 15 per cent to three-eighths of 1 cent per pound.
Although some sumac and sumac extract are produced in the United States, namely, in Virginia, Sicily supplies most of this commodity, Sicilian sumac yielding the lightest and most esteemed extract, used not only in the tanning of leather but also in the textile industry.
Oils of lemon, orange, and bergamot.—These essential oils are not produced in the United States, are supplied almost entirely by Sicily (in fiscal year 1911, lemon, pounds, 430,768, valued $323,552; orange, pounds, 73,804, valued $100,115; and bergamot, pounds, 65,199, valued $222,225), are used chiefly in perfumery and, save bergamot, as flavorings in beverages, confectionery, and pharmaceutical preparations.
They are at present on the free list, where they have been for many years, with the exception of orange oil, upon which at the last tariff revision a duty at first of $1 per pound, and then, upon protest, of 25 per cent was assessed. The imposition of a duty caused a decrease in the importations of orange oil from 92,077 pounds in fiscal year 1905 to 73,804 pounds in fiscal year 1911.
Bergamot is not grown in the United States and no manufacture either of lemon or orange oil exists or can be established in California on account of the high cost of labor, which does not admit of the extraction of the essential oils by hand, while no efficient machinery has yet been devised that will render the extraction of these oils industrially possible.
Protection can not be a valid argument in regard to these articles, because, as no domestic production exists, there is nothing to protect. Identified as they are with the success of important lines of American industry (perfumery, beverages, confectionery, etc.), lemon and bergamot oil should be continued on the free list and orange oil should be returned to it.
If, however, for revenue purposes, a duty should be deemed unavoidable, which in the end would have to be paid by the consumer,
this chamber recommends that, instead of an ad valorem, as proposed in H. R. 20182, a specific rate, equivalent to the proposed 20 per cent rate ad valorem, be charged, in order to avoid the difficulty of assessment and the consequent fines to importers, through no fault of their own, which are apt to be encountered by an ad valorem rate.
Olive oil.Olive oil, which only a score of years ago was imported in comparatively small amount, has become of late years an important article of food, owing to the demand created by the notable number of immigrants from southern Europe, in whose diet this article is an important item, as well as to the extension of its use among natives.
In fact, while the importations of edible olive oil in 1892 amounted to only 706,486 gallons, they reached in 1911 a total of 4,405,827 gallons.
From the above figures, showing the remarkable progress in its consumption, the classification of olive oil under Schedule A (chemicals, etc.), appears rather out of date. Edible olive oil would be more properly classified under Schedule G (agricultural products), because olive oil destined to industrial use represents now the smaller amount of importations in fiscal year 1911, 578,477 gallons, against 4,405,827 gallons of edible olive oil).
Olive oil, for many of our people, even of small means, who have come from southern Europe, where this food practically takes the place of butter in the diet of the people, is an article of prime necessity, and its beneficial use, either medicinally or as an article of food, is becoming more recognized also among our native population. The importation of olive oil has steadily and notably increased during the last two decades.
The olive-oil industry in California is still in its infancy. It has had a checkered career and passed through periods of inflation, when planting was general in sections where the climate and localities were altogether unsuitable, so that in many places planting had to be stopped and many of the trees previously planted had to be rooted out.
The planting of olive trees in unsuitable conditions, inexperience in the cultural methods and in the best ways of preparing the oil, the fact that the olive tree required many years before bearing full crops, the scarcity of labor existing in that State, while the gathering of the olives is an operation that has to be performed by hand, ai these facts show that the conditions of olive culture in California are not such as to enable it to supply this commodity at a reasonable cost in any quantity adequate to the requirements of consumption.
Although the production of olive oil in California is stated to have been of 920,000 gallons in 1911, or a little more than the increase (703,617 gallons) shown by the consumption of imported olive oil in fiscal year 1911, against 1910, its wholesale cost, which averages about $2.40 per gallon, against $1.90 for the imported, puts it beyond the reach of the consumers who mostly need this commodity.
If the price of olive oil is not reasonable and not easily accessible to consumers of small means, who, with normal crops, can obtain imported olive oil of good quality at $1.75 per gallon, other vegetable oils of less cost and lower value regarding both health and nourishing qualities will replace the use of olive oil among the less fortunate classes.
For a number of years the people of this country have had to pay exorbitant duties on olive oil simply for the protection of a very small number of growers, who, notwithstanding this heavy protection, have not materially increased the output or made a success ,of olive-oil production; and, as judging from the experience of the past and of the conditions relating to this production in California there is not the slightest hope that California will ever be able to supply the demand of this article at a logical cost, it is evident how unwise and unjust would be the continuation of such high rates as are assessed at present on olive oil, especially in view of the increased cost of this commodity experienced during the last few years, owing to shortage of production in the countries from whence it is imported.
In the readjustment of the duty on olive oil, the criterion that this is a necessary article of food for a large number of our population should first of all be borne in mind, and that as such it should not be burdened with a heavy duty.
Another important condition is that the duty should be so framed as to encourage the use of olive oil in the original package in which it is shipped to this country, so that the consumer may have a better guaranty than is now possible, even taking into account the beneficial effects of the enactment of the pure-food law, which certainly prevents the importation and interstate commerce of adulterated oil, but even in those States where pure-food regulations exist does not prevent the reduction of an olive oil of high quality with one of low quality, or the mixture of olive oil with other vegetable oils, pro ided they are sold as compounds, while often (for instance, in the restaurants, where the oil is not supplied to the consumer in an original package) the supply of a mixed oil
, ostensibly as olive or salad oil, but without any statement as to the nature of the product, is not prevented by any law.
This chamber, in order to submit to this honorable committee an unbiased report on the subject of the revision of the duties on olive oil, heard, through its tariff committee, at a special hearing, many of the most important distributors of olive oil in this country, who answered a set of specific questions. From the replies received the following conclusions have been arrived at:
(a) That the present duties on olive oil are exorbitant and ought to be reduced.
(6) That a reduction of them will not affect unfavorably any American industry.
(c) That no ad valorem rates should be assessed on olive oil.
(d) That the majority of distributors are in favor of a uniform rate of specific duty on olive oil, irrespective of the kind or size of package in which it is imported; i. e., a uniform rate per gallon for both oil imported in bulk and oil imported in bottles, jars, tins, etc.
(e) That the majority are in favor of a uniform rate of 25 cents
Sufficient has already been stated on paragraphs a and b to render superfluous further argument on the issues implied in said paragraphs.
Unanimous is the consensus of opinion among the distributors heard against the assessment of any ad valorem rate as proposed for
oil in bulk in H. R. 20182, because of the difficulty of ascertaining market values in the countries from whence this commodity is derived, the market value differing considerably according to grades and other factors not easily ascertainable in markets which are not always in a high developed condition and often subject to fluctuations, and also because of the objectionable feature of fines, necessarily implied in such form of duty assessment, which often makes the importer the scapegoat of unavoidable discrepancies, through no fault of his.
The reason why a uniform rate both on oil in bulk and in cases is recommended is one of equity and of the necessity of avoiding the unjustifiable discrimination that the present system of duty maintains between oil in bulk and oil in bottles, jars, tins, etc., irrespective of quality and to the disadvantage of the oil imported in the smaller packages.
Olive oil in bottles or other small packages is already in the matter of cost per gallon, owing to the higher cost of its packing, higher freight, and of the duty of 40 per cent on the containers in the case of oil in bottles, at a disadvantage in comparison with oil in bulk, and should not be made to bear, as at present, the addition of a higher fiscal burden.
The difference of cost of olive oil, of identical quality and brand, by reason of the different package in which it is put up, reaches in some cases as much as 43 cents, and is never below 15 cents per gallon, to the disadvantage of the oil imported in tins. To be more exact, this difference is: For cases containing 2 tins of 6 gallons each, equal to 15 cents per gallon; for cases containing 12 one-gallon tins, equal to 18 cents per gallon; for cases containing 24 one-half gallon tins, equal to 23 cents per gallon; for cases containing 48 quart tins, equal to 28 cents; and for cases containing 96 pint tins, equal to 43 cents per gallon.
In the case of bottles, which are subject to a duty of 40 per cent ad valorem, this difference in cost is even more striking, and both encourage unfair competition to the advantage of the oil in bulk, and also a loss to the revenue.
The discrimination against cased oil by the present tariff is not, however, the only argument for which a uniform rate is recommended on olive oil, irrespective of how it is packed.
A still more valid argument is that olive oil imported in tins or bottles gives a better guarantee, practically a Government guarantee, to the consumer not only of the purity, but also of the quality, of the oil imported, such as only the original imported package can assure, encouraging the consumption of oil of better quality, which is essential to the promotion of the use of this healthful commodity.
The present tariff indirectly favors the illegitimate competition of adulterated or mixed oils, in the preparation of which is used the largest part of the olive oil imported in bulk, chiefly represented by oil of strong flavor and odor, fit only for blending.
A uniform rate is therefore respectfully recommended by this chamber in the interest of the consumer, of revenue, of equity, and of hygiene, and this chamber recommends, further, that the rate be fixed at 25 cents per gallon, which is ample protection to domestic