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PARAGRAPH 55-SULPHIDE OF ZINC.
importations any further reduction is unnecessary and the Government is now receiving a substantial revenue from the article. It is also proposed to change the specific duty to an ad valorem duty. We earnestly urge that this be not done, but that a specific rate of duty be continued. Under an ad valorem rate, by undervaluation, the Government is often deprived of its legitimate revenue, which can not occur under a specific rate of duty. At best, the operation of an ad valorem rate is very unsatisfactory and often leads to endless disputes. Also under the specific duty all parties concerned know always what rate of duty must be paid, whereas under the ad valorem duty the rate must constantly fluctuate with the ruling selling prices.
Paragraph 67. Chloride of zinc.—The principal crude material of this article is zinc. A review of the market prices of spelter (which can be obtained from the mineral industry) shows a constantly rising price for spelter. The value of spelter governs the price of the zinc required for the manufacture of this article. On this account the American producer has paid more for his crude material during the past few years than ever before. The present duty is not prohibitive and permits the foreign manufacturer to compete with the American market, and he is, as a matter of fact, a very strong and active competitor, importing during 1910, 1,200,000 pounds, and in 1911, 1,300,000 pounds.
Paragraph 71. Hyposulphite of soda. Statistics show that large quantities of this article have been imported during the past years. During recent years there has been a falling off of importations, due to severe domestic competition, which has reduced the average selling price to practically cost, the domestic consumer naturally having the benefit of these low prices. Nevertheless, under these extremely low prices during 1911, 29,000 pounds were imported. The duty has enabled the American manufacturer to successfully compete with the foreign manufacturer, and any reduction would seriously interfere with the domestic production of this article.
Paragraph 67. Sulphide of soda.—The present tariff provides a rate of three-eighths cent per pound for the article containing less than 35 per cent of sulphide of soda, and three-fourths cent per pound for all containing over 35 per cent of sulphide of soda (otherwise known as concentrated). The reason for that action was because the foreign manufacturer had perfected the process of fusing and concentrating the product, so that it contained from 60 to 62 per cent of sulphide of soda, as against 30 to 35 per cent of the then commercial article, and was importing the concentrated under the old rate of duty, which netted the Government only one-half what it shoi. I have received, for there was practically being imported 2 pounds instead of 1. The imports show in 1910, 596,000 pounds, and in 1911, 456,000 pounds. The duty is now being paid according to the strength, and if the two qualities are not differentiated the revenue, instead of being greater than it now is, will be considerably less, for the foreign manufactuer will export all his product in the concentrated form, and it would also work a serious hardship on the domestic producers if this were permitted, and we strongly urge the differential be maintained as it now is. Government statistics have been computed during the last two years on the two grades, and if
PARAGRAPH 55-SULPHIDE OF ZINC.
only one duty, regardless of strength, is adopted it can readily be seen that the revenue would be materially decreased.
Paragraph 71. Silicate of soda.-Under the present tariff there was imported during the past year 1,200,000 pounds, which will show that the present duty is not prohibitive, and the lowering of this duty, it seems to us, is unnecessary, and will not give increased revenue to the Government. Respectfully submitted.
THE GRASSELLI CHEMICAL Co.,
BRIEF OF BECKTON CHEMICAL CO., NEWARK, N. J.
WASHINGTON, D. C., February 6, 1913. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee,
House of Representatives, Washington, D. C. SIR: Referring to our recent conversation in regard to an article known as lithopone, I beg to state that lithopone is a compound of the chemical products in which are used barytes and sulphid of zinc. It is not known eo nomine in the tariff act, but is a well known article of commerce both in this country and abroad, and when imported into this country it is classified as sulphid or sulphide of zinc under paragraph 55 of the present tariff act and pays duty of 14 cents per pound. The barium sulphate in the form of barytes, when properly mixed with zinc sulphide produces this pigment which is commonly sold under the name of lithopone, and it is extensively used in the manufacture of flat coat paints, linoleum, oil cloth, and the rubber industries. The importation of this article into this country is in increasing quantities, and for the year ending June, 1911, 5,409,520 pounds of lithopone were imported into the United States, paying a duty of 14 cents per pound. This, I am told, is about one-eighth of the total amount of lithopone produced per annum in the United States. The rate of 14 cents per pound was equivalent to an ad valorem rate in 1890 of 43 per cent, in 1905 of 48 per cent, in 1910 of 41.85 per cent, and while. I have not the figures for the last year, I presume the ad valorem equivalent would be about 40 per cent. The barytes entering into the manufacture of lithopone pays a duty of $1.50 per ton under paragraph 42 of the present act, and sulphid of zinc, or white sulphide of zinc, pays 14 cents per pound as stated above, under paragraph 55 of the present act, and as I have already stated, lithopone, when imported, is classified under paragraph 55 by similitude.
The manufacture of lithopone in this country is a comparatively new industry, and has been established within the last fifteen or twenty years, and it is substantially upon a competitive basis with the European article, as is shown by the increasing importations into this country, and it would seem that the industry would not bear a much lower rate of duty. We would, however, suggest that sulphid of zinc, or white sulphide of zinc, pay a duty of 1 cent per pound, and in as much as you and your committee are in favor of ad valorem rates, may I suggest that the rate be made 30 per PARAGRAPH 56_PAINTS, COLORS, ETC. cent ad valorem, but not less than 1 cent per pound. This, as you will notice, will be a reduction of 20 per cent ad valorem from the present duty.
In this connection I desire to draw your attention to the briefs which have already been filed and have become a part of tho printed record of the hearings upon the chemical schedule. Believe me to be, with very great respect,
CHARLES P. SEARLE, Counsel for Beckton Chemical Co., Newark, N. J.
All paints, colors, pigments, stains, lakes, crayons, including charcoal crains or fusains, smalts and frostings, whether crude or dry or mixed, cr ground with water or oil or with solutions other than oil, not otherwise specially provided for in this section, thirty per centum ad valorem; all glazes, fluxes, enamels, and colors used only in the manufacture of ceramic, enameled, and glass articles, thirty per centum ad valorem; all paints, colors, and pigments, commonly known as artists' paints or colors, whether in
tubes, pans, cakes, or other forms, thirty per centum ad valorem. For ceramic colors, see H. J. Krebs, page 300; O.K. Williams & Co., page 307; and F. A. Reichard, page 308.
PAINTS, COLORS, ETC.
STATEMENT OF MR. ARTHUR S. SOMERS, NEW YORK.
Mr. SOMERS. Mr. Chairman and gentlemen, I am here on behalf of the manufacturers of dry colors of the United States, and I want to say at the outset that, in order that the committee may understand it from our point of view, we consider the manufacture of dry colors as the last step in the chemistry of the manufacture of paint and printing ink. The dry color manufacturer assembles the various ingredients, the chemicals and aniline dyes, and pigments of various kinds, and, by a chemical process, combines them and turns out the finished product, which, from his point, requires just the skill of the manipulator to mix them in certain vehicles for the purpose of making paint, printing ink, or wall-paper color. So that we represent the last step in the chemistry of paint and ink making, and we believe that, because of this unique position, any consideration tending toward a revision of the tariff on dry colors should take into consideration at the same time a revision of the various items leading up to and through these channels, the acids, the coal-tar dyes, and other pigments; and that when the committee desires to reduce the tariff on dry colors, if that be the principle and policy of the Congress-and I assume it is——that they take into consideration the effect that the duty levied upon acids, coal-tar dyes, and other pigments entering into the manufacture of dry colors will have upon the dry color industry of this country.
Mr. HARRISON. All of those have been reduced in the bill, have they not?
Mr. SOMERS. No.
PARAGRAPH 56—PAINTS, COLORS, ETC. Mr. HARRISON. Ninety-nine per cent of all the materials you see in the manufacture of colors have been substantially reduced by the bill, have they not?
Mr. SOMERS. They have been reduced, but not altogether substantially. I will try to point that out briefly. I have prepared a brief, which I will not read, but will file it with the committee, and just direct your attention to some of the important features of it.
Answering Mr. Harrison's question: In section 56 of the proposed tariff—and I assume you have under consideration H. R. 20182, and, in the absence of any more definite information to the contrary, Í will proceed on the assumption that that is the bill that is in the minds of the majority of the committee, and probably may form the basis of your conclusion when you present your bill for consideration in the flouse and in the Senate---in section 56 of the present tariff law, that is, the Payne law, the law of 1909, is imposed a duty of 30 per cent ad valorem on all paints, colors, pigments, etc., not otherwise specified.
Section 68 of H. R. 20182 reduces the duty from 30 to 20 per cent ad valorem. The colors included in section 56 for the most part contain considerable quantities of coal-tar dyes, at present dutiable in paragraph 15 of the law of 1909 at 30 per cent ad valorem. Paragraph 21 of H. R. 20182 proposes a reduction of 5 per cent, making the duty 25 per cent ad valorem. I submit that is not, when considering the reduction in duty on dry colors as comprehended in section 56 of the present law, a substantial reduction in coal-tar dyes, from our viewpoint.
Mr. HARRISON. What do you think the reduction should be in coal-tar dyes?
Mr. SOMERS. I am not arguing for a reduction, but we ask in the brief for an equalization, whatever may be the judgment of the committee. If it is 20 per cent on coal-tar dyes, all right; we will be satisfied with 20 per cent on dry colors. We make no protest against the tendency or policy of this committee toward a revision of the tariff downward, and, personally, I could not take that attitude; I would not be here were I not in sympathy with a sane and equitable revision of the tariff downward, because I expect on next Monday, in my State, to vote for the man as an elector who will be called to sign whatever bill is presented.
That is my position. I want to be perfectly fair, and I want to have it understood that I am not coming here seeking protection for an industry that does not require a prohibitive tariff.
That is our position; so I submit that it is unfair to reduce the tariff on our manufactured product from 30 per cent to 20 per cent, and reduce the tariff on the materials that we are compelled to use, many of which are imported, as indicated from the report here, something like $6,000,000, I think, under the same law during 1911, while it is estimated that it will be something like $7,000,000 under H. R. 20182, to 25 per
cent. Mr. HARRISON. How large a proportion of the materials that you use are made up of these coal-tar dyes and colors, which are reduced in the present bill from 30 to 25 per cent ?
Mr. SOMERS. Probably 50 per cent.
PARAGRAPH 66–PAINTS, COLORS, ETC. Mr. HARRISON. What do the rest of the materials used in your manufacture consist of ?
Mr. SOMERS. Chrome colors, chrome greens and chrome yellows, all of which are reduced in this proposed bill; but we make no protest against that. I call your attention to that in my brief, because the committee have taken into consideration the lead pigments and salts and potashes and other things that we use, and they have correspondingly reduced the tariff on those materials. But we make no complaint whatsoever.
Mr. HARRISON. Most of those reductions haye been more than the reductions in your finished products?
Mr. SOMERS. No, sir.
Mr. HARRISON. I think, if you will read the bill, you will find that some of them are reduced from 60 to 15 per cent.
Mr. SOMERS. I have read the bill and have studied it very carefully and I have in mind now the reduction on pig lead, for instance, which is not at all commensurate with the reduction which has been made on the product into which pig lead enters as a basis,
all of those things which we use as a basis for our chrome colors. We can live under that, because these things are very cheap in price, and we do not fear competition from abroad on the cheap colors we manufacture. It is on the fancy goods and the high-priced goods that we have the most competition. We have competition to-day, and we are not asking you to exclude competition. We invite competition.
Mr. HARRISON. The committee really would like to know what would be, in your opinion, a fair rate upon coal-tar dyes and colors, in view of the proposed reduction from 30 to 20 per cent on dry colors.
Mr. SOMERS. That is so. I shall insist upon asking for a reduction in coal-tar dye from 30 to 20 per cent, if the committee desires to adhere to the appeals made on behalf of the coal-tar dye manufacturers of this country and reduce the duty to 25 per cent from 30 per cent; that is, to treat us just exactly the same. In that event, we shall have no complaint. I think that is a fair attitude for a manufacturer to assume. I do not know of anything that I can state that would be more reasonable than that.
Again, I want to say that you have taken alizarine, paranitraniline and alpha naphthylamine, which enter very largely into the manufacture of these finished products, such as are printed in paragraph 56 of the Payne bill. You propose to take them from the free list and put a 10 per cent duty on them. There you are hitting us again; so we are getting it both coming and going; we are whipsawed both ways. You take the raw material that we use and put it on the dutiable list with a tariff of 10 per cent. You reduce some of the materials that we use from 30 to 25 per cent, but you by reducing others from 30 to 20 per cent. 'I do not know for what reason; but we are not quarreling with the duty of 10 per cent.
Mr. LONGWORTH. Don't you realize that it is a Democratic tariff that you have before you?
Mr. SOMERS. I realize it.
Mr. LONGWORTH. You say you are a Democrat, and still you are objecting to it.
Mr. SOMERS. No. We realize that the committee is not devoid of all reason. Some time ago I made up my mind that when the next