PARAGRAPH 40-FISH OILS. EXHIBIT C. [Newark Chamols Co., manufacturers of oil-tanned washable chamols leathers.] NEWARK, N. J., January 2, 1913. Messrs. DOONER & SMITH Co., Newark, N. J. GENTLEMEN: We understand there is to be a hearing before Congress relative to a change in the duty on leather manufacturers' products, and would respectfully ask that you use your best endeavors to have the duty on Newfoundland cod oil removed entirely or reduced materially, as we firmly believe that we should have our cod oil free from duty. It is our sole tanning material in the manufacture of chamois skins. This business has met with very little success in the United States on account of the great competition we are obliged to meet from abroad. The cost of labor here has been fully three times what it is in England, France, and Germany. Thanking you for any interest you might take in this matter in our behalf, we remain, Yours, truly, NEWARK CHAMOIS CO., EXHIBIT D. BOWRING & Co., New York, N. Y. MILWAUKEE, Wis., January 3, 1913. GENTLEMEN: Your letter of December 28 at hand inquiring why we use Newfoundland oil. We find this oil to be more pure and that it does not oxidize as readily as the domestic product. It penetrates the leather better and does not spew. Yours, truly, PFISTER & VOGEL LEATHER Co., EXHIBIT E. CLEVELAND, OHIO, January 4, 1918. BOWRING & Co., New York, N. Y. GENTLEMEN: Replying to yours of the 28th relative to cod oil, we wish to state that it is impossible for us to use the domestic oil, owing to its impurities. In the manufacture of patent leather it is necessary to have an oil that has a low cold test, otherwise the leather will bloom. The Payne-Aldrich tariff bill removed practically all of the duty on leather. This was done with the supposed understanding that duties would be lowered on everything that went into the manufacture of leather. This, however, was not done, as on some articles, namely, quebracho extract, the duty was raised. We do not believe, however, the foregoing is any argument, the only thing being that it is impossible for us to use any but Newfoundland cod oil in our business. Very truly, yours, THE CLEVELAND TANNING CO., STATEMENT OF CAPT. N. HIBBERD, SAN FRANCISCO, CAL. Mr. HIBBERD. Mr. Chairman and gentlemen of the committee, I am here as the representative and part owner of the Tyee Co., of San Francisco. This company is owned entirely by a number of merchants in that city, and is the pioneer concern in America to engage in catching three species of whales commonly called sulphur bottoms, finbacks, and humpbacks, which, until we commenced operations in 1908, had never been taken by the people of this country. Therefore, the establishment of our plant represented an entirely new American industry. PARAGRAPH 40-FISH OILS. The oil which we get from these whales is not the whale oil of commerce, because it has no lubricating value, and therefore has to be used for a different purpose. The English and Norwegians have been engaged in this business for many years, and knowing these whales were very numerous along the Alaskan coast, after mature deliberation our company was organized and $450,000 invested in our shore station and floating plant. We were aware that our equipment would cost us more than double what our foreign competitor had to pay for his. As an illustration, our first whaler cost $60,000, while our competitors on Vancouver Ísland, about 200 miles away, only have to pay $22,000 for their steamers, which they have built for them in Norway; and in addition to the first cost,. the wages paid to our employees, including their maintenance will average $100 per month each as against $40 without maintenance by the owners of the foreign plant. But we felt confident that the duty, which amounts to practically $3 a barrel, would enable us to compete with them. Unfortunately, we found there was no sale for our product in this country, for, as stated above, it has no lubricating value and the soap makers and tanners were afraid of it because of the odor, and we were therefore compelled to sell our oil the first year in Glasgow, Scotland, in competition with the English and Norwegian whaling companies, at a price which meant a loss to us of $100,000 for the season's operation. All this loss was not due to the price which we could have obtained for the oil had we sold it in America at the English price plus the greater part of the duty. Some of it was caused by the fact that we were new at the business and had much to learn before we could compete successfully with our foreign competitors, who had had many years' experience; but we did realize that even after we had mastered the details of the business we could not hope for success until we could sell our products at home, and before we could do this it was necessary for us to educate our possible customers. We therefore started in on a campaign of education, which cost us about $50,000 in money and took a great deal of care and trouble. But we finally succeeded in convincing the soap manufacturers and tanners they could use our oil as a substitute for tallow. The second year we succeeded in selling about one-half of our catch, which amounts to about 9,000 barrels per year, in this country. We did a little better the next year, and last year we succeeded in selling our entire output here in this country, and have therefore developed an entirely new business. The past year is the first time we have made any profit, and this profit, even with the protection afforded us by the duty of 8 cents per gallon, amounted to but $9,000. Surely not an excessive return on an investment of $450,000, especially when you consider that there was nothing written off for depreciation and there was an operating loss in the first three years of $150,000 in addition to our original investment. But we have been gradually working ahead, and two other American concerns who have watched our progress, and who, perhaps, have not been fully posted as to the financial returns of the venture, have put in similar plants, one of which has been in operation two PARAGRAPH 40-FISH OILS. One years and the other one expects to commence work next year. of these concerns has four steamers, which were built in Seattle at a cost of $60,000 each, while their competitor, 200 miles away on the coast of Vancouver Island, is using 12 steamers built in Norway at a cost of $22,000 each; and in addition all the American concerns are importing lines and other fishing gear from Norway, paying a heavy duty thereon (which the customs regulations of this country provide for) because these articles are not manufactured and can not be bought in this country, although some of the rope manufacturers are now endeavoring to make lines which we can use and thus avoid the necessity for this outlay; and if we can continue in business there is no doubt but that the American rope manufacturers will finally succeed in producing an article which will be satisfactory for our purposes, and thus we are indirectly helping another American industry. Now, does it seem fair or right when we have invested our money in these plants, feeling safe in doing so because the duty gave us this protection, and then had energy and pride enough to develop an entirely new industry, that you gentlemen should take it away from us? Because if you reduce the duty on these oils you will absolutely destroy our investment, for we could not possibly hope to operate in competition with our foreign competitor just across the border who has such advantages in the cost of his plant and the wages paid his workmen, and thus the $60,000 a year which we are paying out for wages and provisions to Americans would be entirely lost to this country and would go to the foreign workmen in their home countries. We have just about developed markets enough for our own output, and if other American concerns come into the field we will all have to continue our campaign of education so as to have a market for our goods at home, for none of us can hope to compete with our foreign competitors while they have such an advantage in the cost of their plants and wages to their employees, and we respectfully urge you not to make it impossible for us to continue but to give us the help necessary for us to go on and build up this trade, especially in view of the fact that in doing so you are helping several American industries, while on the other hand a reduction in the duty would be a benefit to the foreigner only and a handicap which would put your own countrymen out of business and mean a direct loss to American labor of $60,000 a year from this one plant. And I am convinced that the other two plants, one of which is now in operation, are in exactly the same situation, and their figures can safely be added to ours as showing the loss which must come to this country if this industry is to be wiped out, while at the same time there is no one to be helped but the foreigner, in whom I presume you are not especially interested, and whose interests you are not anxious to protect, particularly when in so doing you are working such a great hardship on a struggling industry which is trying to develop a new trade in this country. I trust that when you come to consider this question you will bear these facts in mind and give us the protection we ask for, to which I feel sure you will decide we are entitled. Thank you, gentlemen. Mr. HULL. What is the average cost of one of those plants? Mr. HIBBERD. I know exactly what ours cost us $100,000. Mr. HULL. What proportion of that is embraced in the machinery? PARAGRAPH 40-FISH OILS. Mr. HIBBERD. That would be a very difficult question to answer. For instance, we have a very large factory or plant for reducing the blubber after it is taken off the whale and converting it into oil and converting the flesh into fertilizer and grinding the bones, and we have our whaler and a tug to go out and tow the whales into the station. I do not think I could tell you exactly the different proportions. Mr. HULL. Where are your materials manufactured? Mr. HIBBERD. In this country, all except some particular parts, for instance the gun, which we use on the bow of the whaler, and our harpoons and our lines and bombs, and some other specialties which the Norwegians have developed. Mr. HULL. Is the machinery complicated in the main, or is it more or less simple? Mr. HIBBERD. There is nothing about it different from other machinery. There are many plants which have been installed which have much more complicated machinery. Mr. HULL. You do not know about what proportion the cost of the machinery would comprise? Mr. HIBBERD. No, I do not know; but I could give you the detailed cost of everything. I happened to be in the East, and when these hearings were announced my partners telegraphed me and asked me to come here and state our views on the matter; so I am not very well posted as to the details. Mr. PETERS. What is the total production of your firm and of the other firms that you have referred to? Mr. HIBBERD. Our output is 9,000 barrels, and I am under the impression that theirs is about the same. Mr. PETERS. Barrels ? Mr. HIBBERD. Barrels. Mr. PETERS. How much does that amount to in gallons? Mr. HIBBERD. There are about 50 gallons to a barrel, and that would make 450,000 gallons. Mr. PETERS. What proportion of the total consumption do you produce? Mr. HIBBERD. At first we produced all that was used in this country. When we commenced, we could not sell a barrel here. It was all shipped abroad. There may have been some shipments that I do not know anything about, but I do know that we went to all the principal users of that sort of product, and they would not touch it. There may have been some of it used in a way that I have no knowledge of, but, so far as I know, there was not any of it used. Mr. DIXON. What is the proportion of your labor cost to the total value of your output? Mr. HIBBERD. Just about 60 per cent. The CHAIRMAN. That is all. Mr. HIBBERD. Thank you. BRIEF IN BEHALF OF THE BLACK HORN LEATHER CO. (CHAMOIS MANUFACTURERS), OF GREAT BEND, PA. The Black Horn Leather Co. is interested in the maintenance of the existing duty on these oils. It is a purchaser and consumer of fish PARAGRAPH 40-FISH OILS. and cod oils which are required in the production of chamois leather; and is a producer of sod oil, moellon, and degras, as a necessary sequence in the oil tannage of chamois. All these oils under the existing tariff carry a duty of 8 cents per gallon. Chamois leather tannage requires fish or cod oil. Cod oil oxidizes a little more slowly than other fish oils, and hence is less likely to burn skins in tanning, and for that reason it is extensively used in all oil tannage. Newfoundland cod oil, which is the chief competitor of the domestic cod oil, is controlled almost exclusively by London importing houses whose American representative has appeared before your committee in advocacy of placing Newfoundland cod oil on the free list. It is admitted that Newfoundland cod oil has maintained a more uniform standard of quality than has the domestic oil, but there has been a marked improvement in domestic oil in the last few years, with result that the Newfoundland cod oil has fallen off in importation.1 It was urged before the committee by the representative of the English importing houses that Newfoundland cod oil, because of its acknowledged superiority, did not come in competition with domestic productions. This statement is in error. The improvement in the quality of the domestic cod oil in the last few years has been marked. Mr. Orth, of Marden, Orth & Hastings, of Boston, large distributors of domestic cod and fish oil, is now offering domestic cod oil which he guarantees to be equal to any Newfoundland cod oil on the market, and the experience of the Black Horn Leather Co. in the use of domestic cod oil has been exceedingly satisfactory. The reason the Black Horn Leather Co. as purchasers and consumers oppose the removal or lowering the present duty on cod and fish oil rests in the belief that such removal would diminish, if not eliminate, the domestic production, and then with no competition from the domestic article the control of prices of Newfoundland cod oil would be lodged with the English importers. If their suggestion should be adopted to remove all duty from Newfoundland cod oil and retain it on any other fish oils the importers' control would be complete The National Association of Tanners, who appeared before this committee through Mr. Vogel, made no request whatever to have the duty on cod oil removed. On the contrary, the firm of Drueding Bros. & Co. and the Black Horn Leather Co., manufacturing substantially all of the chamois made in the United States, do not favor the lowering of the existing duty on fish and cod oils. Inasmuch as sod oil, moellon, and degras are necessary products of oil tannage, and enter so largely into the financial side of the sale of oil-tannage products, it is necessary to ask for them the same protection that is accorded to cod and fish oils. Chamois production in the United States has not as yet been developed to any great extent, and only the two concerns mentioned have thus far engaged in the manufacture of chamois leather, and they require, in order that they may continue in business, that their products be protected against the well-established foreign producers. I See brief of Mr. Badcock in behalf of W. & S. Job Co., London. |