PARAGRAPH 15-COAL-TAR DYES.

years have advanced from 15 to 50 per cent, although the cost of production has not risen.

In conclusion we beg to state that the figures and tables contained in this document are taken from our books and represent actual conditions, and if desired, we are prepared to prove the correctness of same in every particular.

On a separate sheet annexed hereto, marked "Table E," we suggest the wording of the sections in the tariff which we desire to have changed. Respectfully submitted.

SCHOELLKOPF, HARTFORD & HANNA Co.
THE HELLER & MERZ Co.

TABLE A.-Table showing cost of coal-tar dye plant designed for a yearly output of 3,000,000 pounds; also showing the cost of depreciation of buildings and wear and tear on machinery, etc.

TABLE B.-Table showing employees needed for a coal-tar dye plant with a yearly capacity of 3,000,000 pounds.

PARAGRAPH 15-COAL-TAR DYES.

TABLE C.-Material required for 3,000,000 pounds of coal-tar dyes and cost of same.

TABLE D.-Cost of producing 3,000,000 pounds of coal tar dyes.

SEC. 469. Alizarin, natural or artificial, and dyes derived from alizarin or from anthracin.

SEC. 524. Coal tar, crude, pitch of coal tar, and products of coal tar known as dead or creosote oil, benzol, toluol, naphthalin, xylol, phenol, cresol, xylidin, toluidine, cumidin, binitrotoluol, binitrobenzol, benzidin, tolidin, dianisidine, naphthol, naphthylamin, diphenylamin, benzaldehyde, benzyl chloride, resorcin, nitrobenzol, and nitrotoluol; all the foregoing not medicinal and not colors or dyes. SEC. 580. Indigo.

No change suggested.

Coal tar, crude, and all products or preparations of coal tar, not colors or dyes and not medicinal, not specially provided for in this act.

No change suggested.

The CHAIRMAN. Now, if you are through with your brief, let me ask you a question. The manufacturer of coal-tar dye in this country is really assembling a partly finished product and it is only the question of assembling what has already been manufactured after it gets into this country?

Mr. SCHOELLKOPF. Oh, no.

The CHAIRMAN. I wish you would describe that to the committee. In the first place tell us what raw material you import.

Mr. SCHOELLKOPF. We import coal-tar products, nitrate of soda, and we use very many domestic chemicals, sulphuric and muriatic acid, caustic soda, and soda ash, common salt, coal, etc.

The CHAIRMAN. What do you do after you get those acids, sodas, or manufactured products when they come in here? When you get them here, what do you do to make your product?

Mr. SCHOELLKOPF. We put them through the regular process of manufacture, combining certain chemicals under certain conditions. The CHAIRMAN. That is merely the process of mixing them together? Mr. SCHOELLKOPF. Much more. Chemical changes take place there very radical chemical changes.

The CHAIRMAN. Of course, chemical changes take place, but I am talking about a mechanical proposition, as far as labor and time are concerned. It is a question of mixing them together?

Mr. SCHOELLKOPF. Oh, no, Mr. Chairman; you are entirely misinformed there. It takes us about four weeks to complete the manufacture of our color. The process takes us four weeks. You can hardly say that it is simply stirring them together. There are quite a few manufacturers on the other side that do the same thing we do. They buy the intermediate products or raw materials and manufacture the color from those.

The CHAIRMAN. I am trying to get this proposition: The four weeks that it takes, is that in the process of manufacture all of that time, or do you mix them together and wait for four weeks?

Mr. SCHOELLKOPF. Oh, no.

PARAGRAPH 15-COAL-TAR DYES.

The CHAIRMAN. Describe to the committee what you do. After you get this manufactured product that you use for your manufactured product, what do you do?

Mr. SCHOELLKOPF. Well, we will take one color; for instance, magenta; we would mix nitrobenzol with aniline oil and apply heat. That would probably be agitated for four days. Then the surplus aniline oil is removed by distillation. The resulting crude smelt is then dissolved in large tanks, and then drawn off in large vats. Here about 30 per cent of the color crystallizes. The remaining liquor is again boiled down and recrystallized. This process is repeated until all of the color is exhausted, the whole process taking about two months.

The CHAIRMAN. What is the total cost of manufacture in your plant, including labor and raw material?

Mr. SCHOELLKOPF. The labor is about 20 per cent and the crude material is about 60 per cent.

The CHAIRMAN. And the overhead charges are about how much? Mr. SCHOELLKOPF. They make up the balance of about 20 per

cent.

The CHAIRMAN. Sixty per cent for raw material; is that your raw material?

Mr. SCHOELLKOPF. Yes.

The CHAIRMAN. Twenty per cent for labor and 20 per cent for overhead charges?

Mr. SCHOELLKOPF. Yes.

The CHAIRMAN. Are there any further questions to ask the witness?

Mr. SCHOELLKOPF. There are a few more remarks I would like to make, Mr. Chairman.

Mr. HILL. This is what strikes me as a typical case with reference to this schedule, and I want to ask you a question or two. Three years ago you came before this committee and submitted your books as to the results of your business.

Mr. SCHOELLKOPF. Yes, sir.

Mr. HILL. I have before me the statement that you made at that time, showing the cost of coal-tar dyes made from the intermediate products of coal tar, showing a difference of 44 per cent between this country and Germany.

Mr. SCHOELLKOPF. Yes.

Mr. HILL. Those books were examined by the chairman of the committee, and as a result a duty of 35 per cent instead of 44 per cent was recommended.

Mr. SCHOELLKOPF. Yes, sir.

Mr. HILL. The Senate cut that down to 30 per cent?

Mr. SCHOELLKOPF. Yes, sir.

Mr. HILL. You have been going on with that duty since, have you not?

Mr. SCHOELLKOPF. Yes.

Mr. HILL. Have there been any excessive profits under that duty, from that time to this?

Mr. SCHOELLKOPF. No, sir; in fact, our profits are less.

PARAGRAPH 15-COAL-TAR DYES.

Mr. HILL. I suppose you are perfectly willing to submit your books to the chairman of the committee, are you not, just as you did three years ago?

Mr. SCHOELLKOPF. Yes, sir.

Mr. HILL. This proposed bill-I will not say that; I have no authority to say that-but the bill that was proposed by the Democratic House last session provided for cutting down that duty 5 per cent?

Mr. SCHOELLKOPF. Yes; from 30 to 25

per cent.

Mr. HILL. And for increasing the duty on raw material 10 per cent?

Mr. SCHOELLKOPF. Yes.

Mr. HILL. I see by your statement here, which I assume you still continue as correct, notwithstanding the lapse of three years' timeMr. SCHOELLKOPF (interposing). I do.

Mr. HILL. That the materials constitute about two-thirds of the cost of the product.

Mr. SCHOELLKOPF. About that.

Mr. HILL. So that the duty on the materials would be 6.6 per cent of the entire product, making a reduction of 11.6 per cent.

Mr. SCHOELLKOPF. Yes.

Mr. HILL. On that duty of 30 per cent.

Mr. SCHOELLKOPF. Yes.

Mr. HILL. Can you carry on that industry at 18.6 per cent duty without a reduction of labor?

Mr. SCHOELLKOPF. We can not carry it on and make any money out of it.

Mr. HILL. Can you carry it on without a reduction in the cost of labor, at a duty of 18.6 per cent?

Mr. SCHOELLKOPF. If that bill was passed as it is now, and leaving the labor as it is, we could make absolutely no profit.

Mr. HILL. How much of a reduction, in your judgment, in the cost of labor, would be necessary, with a duty of 18.6 per cent on coal-tar dyes and colors?

Mr. SCHOELLKOPF. We would have to cut down our labor one-half. Mr. HILL. About one-half?

Mr. SCHOELLKOPF. Yes.

Mr. HILL. Could you do it; would it be possible to do that?

Mr. SCHOELLKOPF. No; we could not do it.

Mr. HILL. It is proposed, as to coal-tar dyes and colors, to put a 10 per cent duty on the raw materials and cut the finished product 5 per cent, and that would absolutely compel you to stop the industry of making coal-tar dyes and colors?

Mr. SCHOELLKOPF. Unless we wanted to carry it on at a loss.

Mr. HILL. To go one step further: Would there be any revenue received whatever on the 10 per cent duty on the intermediate products; would there be any imported under those circumstances? Mr. SCHOELLKOPF. Not so far as we are concerned.

Mr. HILL. And you are typical of the industry, are you not; you are about as large as anybody in it?

Mr. SCHOELLKOPF. Yes, sir.