PARAGRAPH 67—PERFUMERY.

Mr. RICKSECKER. I secured from the Bureau of Statistics figures on the exports of perfumery, cosmetics, and similar toilet articles from the United States in the fiscal year ended June 30, 1912, which were $1,147,000.

Mr. KITCHIN. That is a great deal more than the imports?

Mr. RICKSECKER. The imports

Mr. KITCHIN. All these materials have alcohol in them?

Mr. RICKSECKER. No; the imports are about the same.
Mr. KITCHIN. They are a little less, are they not?

Mr. RICKSECKER. $1,064,000.

Mr. KITCHIN. That is for all kinds?

Mr. RICKSECKER. That is all kinds, too.

Mr. KITCHIN. Are you exporting this perfumery?
Mr. RICKSECKER. Somewhat so; yes.

Mr. KITCHIN. Are you selling it cheaper to the foreigners than you are to your own home people?

Mr. RICKSECKER. No, sir; not generally.

Mr. KITCHIN. Then why do you fear competition, if you can ship perfumery across the water and pay the freight on it and then sell it to the foreigners at just the same price you are selling it to the Americans? Why do you fear competition, then?

Mr. RICKSECKER. One reason is that we can now get a drawback. Mr. KITCHIN. It must pay freight?

Mr. RICKSECKER. One reason is that we can now get a drawback on our alcohol shipped for export.

Mr. KITCHIN. But your raw material is on the free list now. You do not get any drawback now?

Mr. RICKSECKER. But the alcohol drawback is considerable.

Mr. KITCHIN. Well, you have the same; you do not lose anything by that.

Mr. RICKSECKER. We did not have an alcohol drawback previously. Mr. KITCHIN. You had that all the time, had you not?

Mr. RICKSECKER. No, sir; we had to buy alcohol under the old law in Europe.

Mr. KITCHIN. And then you could compete with the foreigner. The CHAIRMAN. He has not had a drawback on alcohol since the Dingley bill.

Mr. RICKSECKER. Excuse me, Mr. Chairman. May I say that I was partly instrumental in bringing about this present drawback in

1909.

Mr. KITCHIN. This Congress or the next Congress or any other Congress would have the same drawback.

Mr. RICKSECKER. We did not have it until this last bill.

Mr. KITCHIN. But you will have it; I think we can assure you of that.

Mr. RICKSECKER. We are satisfied, as manufacturers, for the sake of the prestige it gives us to accept a less profit on exporting goods. It is an advantage to our salesmen to be able to say that we have sold these goods in London, in St. Petersburg, and in Berlin. We sold a bill of goods in Berlin amounting to $300. A member of the Reichstag passed that store and noticed it, and within a few days they voted to increase the duty on American perfumery. I was interviewed by the New York papers on the subject, because the German

PARAGRAPH 67-PERFUMERY.

consul told them that I was the man who shipped the goods. It was only $300 worth, and yet they voted to change our duty.

Mr. KITCHIN. If you had this tariff, could you continue to ship

in there?

Mr. RICKSECKER. No; the German duty intervenes.

Mr. KITCHIN. But you have already shipped goods under the same tariff?

Mr. RICKSECKER. We had sold that one bill of $300.

The alcohol tax on our industry is severe, and we have been told that the alcohol people could make it more so, if they chose. The CHAIRMAN. Is that all, Mr. Ricksecker?

Mr. RICKSECKER. Yes, sir.

STATEMENT OF MAURICE LÉON, REPRESENTING ROGER & GALLETT, NEW YORK.

We believe that an ad valorem duty of 25 per cent on toilet and medicinal soaps and of 40 per cent on alcoholic and nonalcoholic perfumery should be adopted as part of the present revision.

We are in the business of importing and selling perfumery, alcoholic and nonalcoholic, and soaps. Under the present rates it has been our experience that it is difficult, if not impossible, for us to compete on our market for the class of goods which goes into the homes of people in medium circumstances. The existing tariff compels us to restrict our activities to the kind of goods which only well-to-do people can afford for the reason that the existing tariff rates make it impossible for us to import and sell merchandise of average good quality at prices low enough to be within the means of the average citizen.

As to soaps, the present rate is 50 per cent ad valorem and it is proposed to make it 40 per cent ad valorem with a proviso that it shall not amount to less than 20 cents per pound. The average weight of a cake of soap being 4 ounces, the proposed change would make the duty on soap not less than 5 cents a cake. This duty is prohibitive with respect to the kind of soap used by persons in moderate circumstances and also amounts to a discrimination against them as is shown by the obvious fact that a cake of soap worth 20 cents abroad will pay on entering the United States 8 cents, whereas a cake of soap selling abroad for only 3 cents would pay 5 cents.

Altogether, the fairest duty is an ad valorem duty only, because to such duty each one contributes his just share according to his means. As shown by your records, the information gathered for the Finance Committee of the Senate states the value of the domestic soap output to be over $68,888,000, while on the other hand, the value of toilet and medicinal soaps imported in 1907 is given at $520,000, that imported in 1910 at $240,000, and that imported in 1911 at $380,500. These figures tell their own story and establish beyond dispute not only that the industry, which is so largely in the control of the Beef Trust and its friends, is not in need of protection, but that the public on the other hand does not get the benefit of competition in the matter of prices and quality.

PARAGRAPH 67-PERFUMERY.

We are satisfied that our competitors who sell goods manufactured in this country make upon some of their most popular grades at least 300 per cent profit, yet find ourselves unable to compete against them for those grades on account of the protection they now receive.

We submit therefore that the proposed change in the tariff should be restricted to fixing the ad valorem duty at 25 per cent only, without any fixed minimum valuation such as has been proposed.

In

As to alcoholic perfumery, the present rate is 50 per cent ad valorem plus 60 cents per pound. This often involves, in practice, a quadruple tax, namely, 50 per cent on the value of the merchandise at the United States customhouse, 50 per cent for domestic alcoholic tax in the country of manufacture, 60 cents per pound on the liquid contents whether their alcoholic strength is 10 per cent or 90 per cent, and, finally, 10 per cent ad valorem on the bottles and stopper. many cases this quadruple duty has been found to amount to about 140 per cent ad valorem, thus closing the American market to any but the very expensive grades which the rich use and giving to domestic manufacturers a protection amounting to virtual prohibition in the case of the grades of goods used by the enormous majority of consumers. This enables the domestic manufacturers to sell to the American consumer inferior goods at the prices for which high-grade goods sell abroad. This is not a competitive tariff; it amounts practically to a prohibitive tariff.

The specific duty has been said to be an excise duty on the alcohol, but the fact is that the domestic excise duty on alcohol is equivalent to 28 cents per pound, while imported alcoholic perfumery pays 60 per cent per pound, no matter how low the percentage of alcohol.

It would seem, therefore, that the interests of the Treasury and those of the average consumer will be equally promoted by having only an ad valorem tax not exceeding 40 per cent.

Likewise that duty should be reckoned on the liquid and the bottle or other container altogether, which should be treated for the purposes of duty as one thing, which they in fact are, being sold as one thing and not otherwise. It is this piling up of duties, each one seemingly small, that destroys general competition.

Nonalcoholic perfumery. The present rate is 60 per cent ad valorem. It is believed that a reduction of it to 40 per cent would lead to a substantial increase of revenue.

The American industry is very large and flourishing and, as shown for instance by the enormous development of talcum powder manufacture, is plainly not in need of any protection. A reduction in the rate of duty herein asked will not only serve to increase the revenue, but will also serve to protect the consumer from poor quality and high prices.

Respectfully submitted.

MAURICE LÉON, Representing Roger & Gallet.

PARAGRAPH 67-PERFUMERY.

STATEMENT OF FRANCIS R. ARNOLD, ON BEHALF OF F. R. ARNOLD & CO., IMPORTERS, NEW YORK.

Mr. ARNOLD. Mr. Chairman and gentlemen of the committee, I wish to refer to what I call fancy toilet soaps.

There is a wide distinction in certain classes of soaps. Soaps like castile soap, which are traded in by the pound, are made by numerous manufacturers where there is a market. There is a vast difference between soaps of that kind and toilet soaps. Each manufacturer owns his own soap, which is usually wrapped, sometimes inclosed in an expensive outer wrapper and packed either in cartons or in small quantities, and it is difficult to obtain the correct weights. There is always a variation in weight of a number of single pieces; therefore, I think that soaps of this class should be subjected only to an ad valorem duty.

A specific duty weighs more heavily on the lower priced articles than on the higher priced articles. Therefore the imposition of a specific duty on such articles places the pyramid on its apex; it puts the lower articles at a higher rate and the articles that really ought not to have reduction pay a lower rate. In that respect the Payne tariff was in the right direction. The pyramid was placed on its base, although the base was a very heavy one-a 50 per cent taxation.

Under that tariff we have been able to recommence the importation of moderate-priced soaps intended for general consumption by people of moderate means who are entitled to moderate luxuries. I have prepared a table, Table A, which is annexed to my brief, giving the exact figures, showing that the imposition of 20 cents per pound would raise the duty on the low-priced soaps set out in my table from 50 to 130 per cent. Under the Payne tariff we have been able to recommence the importation of the low-priced soaps; but if you put a duty of 130 per cent on them they are cut off. In 1912 we imported from one house about $2,700 worth of soap, which paid a duty of 50 per cent. That is bound to increase. It is difficult to introduce new articles under that duty. Under a 40 per cent duty the importations should be still larger, and it would enable us to reduce the retail price 2 cents. Under 20 cents per pound these prices will have to go up 25 per cent to pay the retailer a profit and also pay a moderate profit to the importer. Our profits ought to be 20 per cent at least. The expenses due to the business are 12 per cent, and the expense of distributing the goods in small quantities is very heavy. If we get 7 per cent out of it we are lucky. Our chief opponents, and I think those who favor the tax of 20 cents a pound are those to whom soap is a by-product, are Chicago manufacturers. They have been our heavy competitors. As to alcoholic perfumery

Mr. HARRISON (interposing). Before leaving the subject of soap, will you inform the committee whether the change in the wording of the existing law from "fancy and perfumed toilet soap" to simply "toilet soap" will change the character of soaps imported under that head. In other words, are there any toilet soaps that have not some perfumery in them?

Mr. ARNOLD. I think they would all go under the head of fancy toilet soaps.

PARAGRAPH 67-PERFUMERY.

Mr. HARRISON. In the proposed law, in regard to toilet soaps, we have eliminated the words "fancy or perfumed." Are there any toilet soaps which are not perfumed?

Mr. ARNOLD. There are some few low-priced toilet soaps that have no perfumery to speak of.

Mr. HARRISON. The effect of this change would be to raise the duty on those soaps; is that the idea?

Mr. ARNOLD. To 20 cents per pound?

Mr. HARRISON. To 40 per cent ad valorem.

Mr. ARNOLD. I have prepared a table showing certain soaps which are typical. It would raise the duty from 50 to 130 per cent, which is virtually a crushing tax and which means cutting off a source of revenue.

In regard to alcoholic perfumes, owing to the heavy specific tax, it stands very much on the same basis. The specific duty of 60 cents per pound means an increase over the former rate of $2, or over 100 per cent-it is virtually $4.05 a gallon, or double the amount. The result is that low-priced articles, such as lavenders, colognes, and dentifrices, of which there is large volume, are under an enormous tax. I have left with the clerk of the committee a sample, which, under the 60 cents per pound and 50 per cent ad valorem, paid a tax of 201 per cent. The importation of these articles would be crushed out. There is also a very large demarcation in alcoholic perfumery preparations intended for the hair, teeth, and skin; hair lotions, dentifrices, lavenders, and cologne are not perfumery in the strict sense of the word; not high-priced extracts. I am informed by one of my confreres, who imports chiefly high-priced extracts, that the rate of duty is only 56 per cent ad valorem at present. I have an example of a very interesting article which shows that the tax is 201 per cent under the specific duty.

Up to the time of the Dingley tariff certain of these articles paid only 40 per cent as nonalcoholic perfumery. Thus eau de quinine, which is largely used in this country, paid only 40 per cent until the Dingley tariff. Under 60 cents a pound the importations have entirely ceased. There are not over 12 dozen a year imported, and they are for people who want it at any price. I have prepared a statement of importations from one house, chiefly articles of that kind, cologne, lavender. I have submitted a table, Table C, which shows that the actual cost of perfumery imported from Darrasse & Colmant was $1,073, which paid out $1,478.30, or 137 per cent. With such a duty as that the committee is closing the doors to a source of revenue. If the committee will adopt a line of demarcation and state that those articles which are evidently intended only for outer application should come in as nonalcoholic, as they used to, the importation will be gradually recommenced and gradually reestablished. The pyramid will then stand on its base and not on its apex. I believe a great many of the articles we import are articles of foolish luxury. I do not believe a woman who pays $6 for a bottle of perfumery or two or three dollars for a cake of soap is doing the wise thing, but I do believe in this country that the well-to-do middle class who like a little luxury should have the opportunity to indulge it.