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PARAGRAPH 38–OLIVE OIL.
olives and olive oil, and it was. Note the result in four years: With the
very small protection we have had we added 6,000 acres more olives, and of the 12,000 acres then growing and 50 per cent bearing3,000 acres of these have come into bearing--and we have planted 6,000 acres more, making at the present time a total acreage in the State of 18,000 acres, from which we are securing at the present time 8,000 tons for oil and 4,000 tons for pickles, a total of 12,000 tons. Four years ago the average net income was only $17 an acre. This year the average net income is $36.88 an acre-not a very large income, but still it shows what we can do with protection to this industry, and all of this would be lost if the duty on olive oil were removed. In 1908 the olive industry of California represented $4,500,000. To-day it represents over $7,500,000. There is in California to-day 375,000 acres available for olive trees, and, with proper protection, the time will come when we can nearly supply our own country with oil and olives.
The total cost of harvesting and delivering olives in Europe to the factories rarely exceeds $7 per ton, while our cost is seldom under $20
The average cost of California olive oil in the tanks is $1.85 per gallon, and the average selling price is $2 per gallon, giving the manufacturer a profit of 15 cents a gallon.
We use only the best sanitary mechanical methods for extracting oil, while in Europe a large percentage of the oil is extracted in the most crude and filthy manner imaginable, a large portion of it being done by the orchardist himself, and in many instances with only the use of the feet and hands.
Labor is a matter which enters largely into the California product. The entire labor pertaining to all the olive industry in Europe, including field laborers, manufacturing laborers, office help, etc., is $1.04 per day. In California, including the same help as mentioned above, it is $2.47 per day:
Heretofore the by-products have been more or less wasted. Now we have started to extract from the pomace the foots oil. This oil is what is termed mechanical oil, used to a large extent by soap factories and silk manufacturers, and its extraction heretofore has been done only in foreign countries.
Another serious handicap that we have is the matter of freight. Olive oil can be laid down in New York or Chicago from Europe for 7} cents a gallon. It costs us 15 cents a gallon to deliver it to any point from Denver east, and 18 cents to 20 cents a gallon to deliver it from California to what is known as the Northwest; that is, through Montana and Idaho.
I have a detailed schedule here, which I will ask to have made a part of my statement.
The schedule referred to by Dr. Huff is as follows: Average land value per acre, 9,000 acres of bearing olive trees all varieties, $250. Low value here caused by mountain and low land with orchards not cultivated or properly taken care of.
Average land value per acre, 9,000 acres growing but not bearing, $325. Higher value of land caused by quality of soil, higher state of cultivation with water facilities.
Average yield of olives per acre in California, 17 tons. Low average yield is brought about by approximately 3,000 acres bearing, but not yet under full state of cultivation.
PARAGRAPH 38–OLIVE OIL.
Average price received by grower for three years, 1909–1912, 9,000 acres, oil olives on trees, $22 per ton.
Average cost irrigation, cultivation, fertilization, and pruning, 18,000 acres bearing and not bearing, $8.50 per acre. Low average caused by large amount of early planted acreage not being cultivated or irrigated.
Net average receipts to grower per ton for oil olives, $13.50.
Average price received by grower, 1909 to 1912, for pickling olives on trees, $62 per ton. Forty per cent of all olives produced in State are pickling olives, balance oil olives.
Net average receipts by grower for pickling olives, $53.50 per ton. Net average receipts by grower for both oil and pickles per acre, $36.88. Average cost of picking, 9,000 acres, $17.50 per ton. Average cost shipping expense per ton, $3.50. Net amount paid to grower for approximately 12,000 tons produced in 1911, $442,560. Of this tonnage, 4,000 tons were pickles representing 1,200,000 gallons and 8,000 tons of oil olives representing 280,000 gallons of oil.
Average cost of manufacturing olive oil for past three seasons including cost of fruit, manufacturing (not including selling expense or other expense pertaining thereto), $1.85 per gallon. Based on annual output of five largest factories, 90,000 gallons per year.
Average cost of curing and canning ripe olives including cost of fruit (not including selling expense or other expense pertaining thereto), $0.617 per gallon. Based on annual output of five largest factories, 409,998 gallons.
Average paid for labor field work including farm help and olive pickers, $2.17 per day.
Average paid for manufacturing including packing, shipping, selling, operating and office help, $2.76 per day;
Average paid for European labor, including field labor, where any paid, manufacturing plants and shipping stations, $1.04 per day. Covers, Italy, France, and Spain, approximately 400 orchards and 30 mills. Average labor in Greece is 84 cents per day.
Average cost of manufacturing California olive oil for past three seasons (1909, 1910, 1911).
PARAGRAPH 38-OLIVE OIL.
Average cost of pickling and canning California ripe olives for past three seasons (1909,
1910, and 1911).
Mr. HARRISON. It has been frequently stated before this committee that California produces about 5 per cent of the olive oil consumed in the United States. If that is so, you want a tax on the other nineteen-twentieths of the olive oil to protect that 5 per cent ?
Dr. HUFF. We claim that if the tax which is now upon olive oil were removed that it would not affect the consumer at all.
Mr. HARRISON. Is not this an endeavor on the part of these small producers in California to make the people in the East pay their freight rates, through the tariff ?
Dr. HUFF. I do not think it is. I think it is an endeavor on the part of the people of California to build up a business that is young and has shown that it can be built up.
Mr. HARRISON. At the expense of the rest of the United States ?
Dr. HUFF. I do not see how the expense would figure, because I do not think the consumer could get his oil for any less.
Mr. NEEDHAM. California produces about 10 per cent of the consumption in this country, instead of 5 per cent.
Dr. HUFF. Yes, sir.
Mr. NEEDHAM. How much has your investment in the olive business increased since the Payne law was enacted ?
Dr. HUFF. From four and a half to seven and a half million dollars.
Mr. NEEDHAM. Is there enough land in the States of California and Arizona to produce ultimately enough olives and olive oil to meet the home demand ?
Dr. HUFF. I think there is.
Mr. NEEDHAM. Has the price of olives gone up in recent years, or the price of olive oil ?
PARAGRAPH 38-OLIVE OIL.
Dr. HUFF. The price of olive oil ?
Dr. HUFF. No; the price of olive oil remains about the same, but the prices of the manufactures of olives has gone up, and thereby benefited the grower.
Mr. Harrison. What is the market price of olive oil in bottles Dr. HUFF. On the 20-ounce basis, about 80 cents.
Mr. HARRISON. What is the market price per gallon of the other olive oil ?
Dr. HUFF. Which do you mean?
Mr. HARRISON. The tariff divides the importations into two different classes. How is it imported otherwise than in bottles?
Dr. HUFF. Well, in packages of 5 gallons or under, and also over that in casks and barrels.
Mr. HARRISON. What is the market price per gallon of that oil ?
Dr. HUFF. I presume it is the same as the other. It is the oil that is brought in here to be bottled.
Mr. HARRISON. There is a great difference between the unit of value of the two in the Treasury report.
Dr. HUFF. From $1.01 to $1.42 per gallon—a difference in the duty.
Mr. Hill. Dr. Huff, do you know any reason why cottonseed oil should be on the free list and olive oil not on the free list? They are both a food product.
Dr. HUFF. No; I do not.
Mr. Hill. Would you approve a general policy which would make the duty large enough to pay transportation and prevent competition in any part of the United States?
Dr. HUFF. No.
Mr. Hill. Then why do you ask a duty here that will enable you to control the market on the Atlantic coast in olive oil ?
Dr. HUFF. We do not ask a duty to enable us to control the market. We ask a duty to protect a young industry.
Mr. Hill. Will it ever get to be old?
Mr. Hill. Do you not think it would be a wise policy to have food products free in this country? Would you justify a duty of 25 cents a bushel on wheat and 10 cents on corn, and things of that kind that enter into the daily living of the American people?
Dr. HUFF. I do not think olive oil enters into the daily living of the American people.
Mr. Hill. I think it enters into a very large proportion of the daily living of the people of the Atlantic coast. The foreign population there is very large. Would you be in favor of putting a corresponding duty on meat ?
Dr. HUFF. No; I would not.
PARAGRAPH 38-OLIVE OIL.
Mr. HILL. Would you on any food product other than things which are produced in California ? Would you favor, for example, the application which was made here three years ago to increase the duty on peanuts 15 cents a bushel or from a half of a cent a pound to two cents a pound in order to give the peanut growers of the Atlantic coast a virtual control over the San Francisco market ? Would you think that a wise policy?
Dr. HUFF. No; I would not.
Mr. Hill. I do not believe you would, and I do not approve of it with regard to olive oil.
STATEMENT OF F. S. BRIGHT, ON BEHALF OF THE POMPEIAN
CO., OF WASHINGTON, D. C.
Mr. BRIGHT. Mr. Chairman and gentlemen of the committee, I represent the Pompeian Co., whose sole business is the importation of olive oil in bulk for redistribution in packages.
The Pompeian Co.'s plant is located in the city of Washington, and this is probably the only subject that will come before your committee which can be seen right here. It is situated on Thirteenth Street SW., next to the Bureau of Chemistry, and my clients chose that location in order that they might be subject to the most searching supervision as to the quality of their product.
I shall address myself only to the subject of olive oil, section 38 of the Payne bill, and the latter part of section 50 of H. R. 20182. In the Payne bill“ olive oil not specially provided for in this section” pays 40 cents per gallon; "in bottles, jars, kegs, tins, or other packages containing less than 5 gallons each, 50 cents per gallon."
In H. R. 20182 it is providedOlive oil, not specially provided for in this act or in the act cited for amendment, twenty per centum ad valorem; olive oil, in bottles, jars, kegs or other packages containing less than five gallons each, thirty cents per gallon.
My clients are interested in not having the duty on their raw material placed on an ad valorem basis, but think that if an ad valorem duty is to be placed it should be put at 15 per cent ad valorem. The reason for the imposition of the specific duty on the oil in bulk, rather than the ad valorem duty, is the constant fluctuation in the price of olive oil which is imported at the present time. The price runs well toward $1.30 per gallon on the other side now. It has increased, as I will show you in a few minutes, well on to 80 per cent in the last five years. That is the first reason for a specific duty, because you can better estimate, with a specific duty, what the revenue will be and you can further induce the importer to bring in the highest grade of olive oil, if you pay the specific duty, rather than an ad valorem duty. You further protect your revenue by the fact that the oil, when it bears a specific duty, needs only to be measured; it requires no appraisement, and with the variations in the prices abroad, an ad valorem duty may lead to difficulty in appraisement.
We are in no way interested in the importation of olives as a food, but only in the olive oil itself. The existing difference of 10 cents per gallon between oil in bulk and oil in jars and bottles is changed