PARAGRAPH 1-ACIDS. ruined by any lowering of the present duties on the articles in which we are interested nearly all this could not be sold or utilized for any other purpose, but would be scrapped at a total loss. For the reasons above set forth we would respectfully ask for a continuance of the present duty of 25 per cent ad valorem on pyrogallic acid and of 8 cents a pound on gallic acid, which, all things considered, are not too high and would not create a monopoly on this side. We shall then in this country be enabled to fight the German monopoly and to gradually build up an independent industry. We may sum up the consequence of any lowering of the tariff on pyrogallic acid and gallic acid thus: First. Smaller revenue for the United States Treasury. Second. Higher prices to the consumer. Third. Strengthening of the grip of the German monopoly. Fourth. Ruin of a young industry which now promises to create competition and ultimately reduce the price to the consumer. Mr. KITCHIN. How long do you think it would take, with this present tariff, for that industry to become an old industry-that is, not an infant industry-one that would not need this protection? Mr. WHITE. It is somewhat difficult to say, but if we should be able to get hold of the market firmly in five years we should accomplish a great deal, I think. Mr. KITCHIN. You would not need much protection, then? Mr. WHITE. I do not think we would. I think as soon as we have become known to the trade and have a chance to refine our methods so as to reduce the labor element as far as possible, we shall not object to a reasonable lowering of the tariff; but we shall always have the element of low wages paid to foreign labor to contend with. In Germany, in a continuous process, the laborers work 12 hours a day. They have two shifts which work the entire 24 hours. Our laborers work 9 hours. If we put on continuous process we must have three shifts of 8 hours. We could not get laborers to work 12 hours here. Not only that, but we pay our laborers $12 to $15 a week. Over there they pay not over half of that. Mr. HILL. Gallic acid is made from nutgalls, which are on the free list? Mr. WHITE. Yes, sir. Mr. HILL. Pyrogallic acid is made from gallic acid? Mr. WHITE. Yes, sir. Mr. HILL. This bill of last session cuts the duties on both of them about 60 per cent, from 25 to 10. The question I want to ask is, Can you continue to manufacture the gallic and pyrogallic acid if nutgalls remain on the free list, as they are now, with a reduction of 60 per cent of the present duty without cutting your wages? Mr. WHITE. We can not do it under any conditions. Mr. HILL. Then, you can not continue the manufacture at all? Mr. WHITE. No, sir. Mr. HARRISON. What is the process of making pyrogallic acid out of gallic acid? Mr. WHITE. It is a secret process. I can tell you in a general way. Mr. HARRISON. Is it an expensive process? Is it a high grade of manufacture? Mr. WHITE. It is not a high grade of manufacturing, as classed with watchmaking, perhaps, or something of that character, but it requires a class of labor that we pay from two to two and a half dollars a day. 78959°- PARAGRAPH 1-ACIDS. Mr. HARRISON. You make it out of gallic acid? Mr. WHITE. Yes. We are now trying to make our own gallic acid. We expect to make our own gallic acid. We have large quantities of nutgalls now on the way from China, and while we have not yet made our gallic acid so as to be able to compete with the gallic acid we can buy abroad, we fully expect to do it, and we can say it is an assured thing. Mr. KITCHIN. About how much of this acid is consumed in the United States? Mr. WHITE. I do not know. Mr. KITCHIN. We imported only about $9,000 worth of it last year, and I believe your figures there gave a production of about $22,000, so that would indicate we did not consume over $32,000 all over the United States. Mr. WHITE. The Treasury figures, or the import figures, are very misleading. Mr. KITCHIN. There must have been some smuggling going on. Mr. WHITE. Oh, no, sir. I beg your pardon. The acid comes in under "Other articles not specifically mentioned." Mr. KITCHIN. No, it comes in under "gallic acid." Mr. KITCHIN. What I wanted to get at is this: Is it a big industry? Do we make as much as $1,000,000 worth in the United States? Is there much of it consumed? Mr. WHITE. No, sir. At present it is impossible to ascertain the exact amount of pyrogallic acid imported. It is well known to the trade that the actual amount imported is much larger than the Treasury reports show. We have been told by Mr. O. P. Austin, of the Bureau of Statistics, that this is on account of pyrogallic acid not being specially mentioned in the tariff act of August 5, 1909. It is optional with the importer to enter it as pyrogallic acid or as acid not specially provided for." (Schedule A, par. 1.) Reliable estimates place the actual importation at between 100,000 and 150,000 pounds annually. an The CHAIRMAN. You have passed over your time considerably. Is that all you desire to say? Mr. WHITE. That is all. Mr. LONGWORTH. Is your labor any more efficient than similar labor in Europe? Mr. WHITE. No, sir; I do not believe it is. Mr. RAINEY. Does Germany get her supply of nutgalls from China also? Mr. WHITE. Yes, sir. Mr. RAINEY. The world's supply comes from China? Mr. WHITE. Practically. Some comes from Persia and some from Turkey, but practically all from China. PARAGRAPH 1-ACIDS. BRIEF OF BAKER & ADAMSON CHEMICAL CO., EASTON, PA. Hon. OSCAR W. UNDERWOOD, EASTON, PA., January 27, 1913. Chairman, Ways and Means Committee, House of Representatives, Washington, D. C. SIR: So far as this company's interests are concerned the changes proposed in the Underwood bill (H. R. 20182) would be injurious only in respect to the following reductions in the duties on five photographic chemicals, all of which are coal-tar products, except pyrogallic acid: 1. Mono-methyl-para-amido-phenol (known as "metol"): Present duty, 20 per cent (par. 15); proposed duty, 15 per cent (H. R. 20182, par. 22). 2. Diphenyl oxide: Present duty, 20 per cent (par. 15); proposed duty, 15 per cent (H. R. 20182, par. 22). 3. Cinnamic acid: Present duty, 25 per cent (par. 1); proposed duty, 15 per cent (H. R. 20182, par. 1). 4. Pyrogallic acid: Present duty, 25 per cent (par. 1); proposed duty, 6 cents per pound (H. R. 20182, par. 1). 5. Hydroquinone (hydrochinon): Present duty, 25 per cent (par. 65) or 20 per cent (par. 15); proposed duty, 15 per cent (H. R. 20182, par. 22). Since our domestic trade in these articles is controlled by Europe, and since European exportations to the United States are sold at prices having no relation to the rate of duty, we think it certain that a moderate increase in the rate of duty would not tend to increase domestic prices. We, therefore, suggest an advance of duty to 30 or 35 per cent ad valorem generally on all coal-tar chemicals covered by paragraph 22 of the bill under consideration, and on cinnamic acid and pyrogallic acid belonging to paragraph 1. Practically the entire domestic consumption of fine chemicals, especially coal-tar products such as the five above specified, is and always has been imported from Europe, where the production and sale are controlled by "convention" embracing substantially all the manufacturers. As a consequence, exportations to the United States are sold at prices generally very much in excess of cost, since very few of the articles are manufactured in this country. On the other hand, the European prices to the United States for those few articles which domestic manufacturers have lately attempted to produce and sell in competition with the foreign "convention" are frequently, if not generally, below cost in accordance with the avowed and determined policy of European manufacturers to stamp out all attempted American competition in this entire field. This is the case with the five articles above specified. Until 1910 none of them was manufactured in this country. Since that time we have manufactured and sold each of them in quantities which are relatively small as compared with the European exportations to this country. The following table of domestic prices for these articles in 1910 and 1913 illustrates both the excessive European prices for fine. chemicals when not produced in this country and the European cutthroat prices for those few which domestic manufacturers attempt to PARAGRAPH 1-ACIDS. produce and sell in competition with the European "convention." Obviously, neither scale of prices bears any relation to the present relatively insignificant duties on these articles: Past experience shows, therefore, that so long as the United States market in these and similar articles is controlled by Europewhich must be for a long time to come-any ordinary rate of duty is not an appreciable factor, either in the determination of the volume of imports or in the determination of domestic prices. Respectfully submitted. BAKER & ADAMSON CHEMICAL CO., SULPHURIC ACID. STATEMENT OF W. H. NICHOLS, JR., VICE PRESIDENT OF THE GENERAL CHEMICAL CO. Mr. NICHOLS. Mr. Chairman and gentlemen of the committee, I represent the General Chemical Co., manufacturers of what is known as heavy, inorganic chemicals almost exclusively, such as sulphuric, muriatic, and nitric acids, some of the soda products, and some of the alums. We have never enjoyed a very serious protective tariff in our particular branch of the chemical industry, and it was not with the idea of complaining that the tariff is not sufficient to protect us on the bulk of our manufactures that I appear here. I believe it is true in our line of business that we need no protection based solely on the difference between the cost of manufacture in this country and abroad. We have tried to take the best methods that we can find and adapt them to the conditions in this country, enabling us to pay the same rate of wages to our workmen as in other lines of industry, and making it unnecessary in many cases to ask for protection. There are two or three articles that we are interested in that I believe have been overlooked, or possibly have not been fully understood by the committee having this matter of revision in charge. Out of the 30 or 40 articles that we manufacture there are practically only three on which we would bring up this question of possible error. One is what is known as sodium sulphide. The solution of sodium sulphide has been put on the same basis as the concentrated in the proposed bill, so that an article of twice the strength of the solution comes in at the same rate of duty as the solution. The concentrated should take twice the duty of solution. The CHAIRMAN. Is it an ad valorem rate or a specific rate? PARAGRAPH 1-ACIDS. Mr. NICHOLS. A specific rate. Epsom salts, in which we are interested, and, as has been pointed out in your very complete appendix and glossary to the chemical schedule, is made largely from magnesite. It is also manufactured from kieserite or crude magnesite sulphate which is a production of a German syndicate. I think under the present wording of the proposed bill, the crude material takes the same duty as Epsom salts, which is cut from the old rate of 20 cents to 10 cents per 100 pounds. We are entirely in the hands of our German friends in this matter, as we make our Epsom salts on sufferance. They are getting to-day, as near as I can discover, a little more for the crude kieserite than they are from their Epsom, after they have manufactured it from kieserite, and it is simply a question of what they want to let us make over here. The duty should remain on Epsom salts and kieserite should be free. The third article is acetic acid. This under the old schedule took a moderate duty for the weaker strength and 2 cents a pound for the so-called strong glacial acid. It is now proposed that acetic acid be placed entirely upon the free list. On the other hand, you have put on the dutiable list acetic anhydride, which may be said to be still stronger, at 2 cents a pound. I should urge very much the placing of glacial acid on the dutiable list at something like the old rate of 2 cents a pound, whether the weaker acid is or is not. These materials I believe to be illustrations of chemicals that can come into this country at times irrespective of the rate of tariff that is placed upon them the so-called "dumping" of certain surplus manufactured products from the other side. While we have by-product acid in this country, large volumes of it, it is made at points where the freight to the consuming points is very heavy; but in many directions we are growing faster than our production of by-product materials. On the other hand many of our European manufacturing competitors have surplus sulphuric acid to place. They can not place it directly as sulphuric acid and it must therefore be placed as one of the salts, as glacial acetic acid, or some other product made by the use of sulphuric acid. Seeing the need of protecting themselves from this class of importation Canada instituted what is known as a dumping clause, and I believe it has been successful. Whether or not it is wise to enact such a clause into our law, I am not prepared to say. I do think, however, that inasmuch as we must secure in this country some revenue for the maintenance of the Government, I think the duty should be placed on just such things as these I have mentioned-and of course there are many other things upon which it will be perfectly reasonable and fair to place a duty. It is quite immaterial, on some of these things what the duty is. If the foreign manufacturer wants to place them here, he is going to place them here. We are going to do our best to keep them from taking our business away from us, whether there is a duty or whether there is not a duty. In our experience we have found that irrespective of duty many of the foreign manufacturers will bring in such articles as glacial acetic acid, without any reference whatever to the cost but simply as a surplus material that they desire to rid themselves of. Mr. HILL. You would do the same thing abroad if you had the surplus ? |