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Mr. NICHOLS. Absolutely; and I make no argument against it. But here is an opportunity for us to get additional revenue without charging the ultimate consumer more. I would like to add just a word or two about things in which we are only very slightly interested. You have, and wisely, I believe, decided to place a duty on aniline oil and salt. We are interested in a company producing aniline oil and salt in this country.
Mr. HARRISON. What is the amount of production of those things ?
Mr. NICHOLS. I think our maximum production in this country would be 1,000 tons. I think that is one-half of the consumption in this country. You have, I believe, placed that on the dutiable list at 10 per cent. Whether that is going to protect a very young infant which is starting, is something I do not
know. I believe a larger duty than that would be reasonable-15 or 20 per cent. The industry was started in a time when there was no protection.
Mr. James. Which would produce the most, 15 or 20 per cent ?
Mr. Nichols. I believe you would get all the revenue you charged, because the production is not sufficient to meet the demand.
Mr. Hill. Why did you start that industry without any duty ? Did you think you could make it pay?
Mr. Nichols. There are a great many experiments that we try
Mr. Hill. Mr. Emory was speaking of the manufacture of oxalic acid running 6 years under free trade. You say you started this industry without any duty on it at all ?
Mr. NICHOLS. Yes, sir.
Mr. HILL. And you think it ought to have more duty than the committee has given it?
Mr. NICHOLS. We agree with the Congress which has already decided that the duty on that for revenue purposes, I believe, was wise.
Mr. Hill. Did you start it for the purpose of using the by-product, or with the idea of making a successful business investment ?
Mr. Nichols. That is one of the things in which we use sulphuric and nitric acid, a thing which I believe we must encourage in this country, the use of the growing production of what might be called basic chemicals.
Mr. Hill. You did not start it as an altruistic proposition ?
Mr. NICHOLS. We have no business in this country in fine chemicals that can compare with the chemical industry abroad. It is simply a question of whether it is not wise to foster the growth of the chemical industry or at least give us a source of revenue.
I believe that our business is going to grow over here, whether we have free trade or whether we do not. I believe that we are going ahead in this country, but I think there are certain things that should be protected and that certain duties should be levied. It seems to me to be a question so important that one man's wisdom is not sufficient to cover the ground.
The CHAIRMAN. There are several other witnesses, and we must adjourn early this afternoon.
Mr. NICHOLS. I am entirely at your disposal.
The CHAIRMAN. Have you covered the ground that you wish to cover ?
Mr. NICHOLS. I have, sir, unless you would like to ask me to submit a brief later on.
The CHAIRMAN. We would be very glad to have you submit a brief.
Mr. NICHOLS. I intended to have the chairman of our research department to do that, but that has been impossible on account of his illness.
The CHAIRMAN. If you will submit your brief and get it in to-day, it will be printed in the hearings on the chemical schedule; if not, it would go back in another schedule, where it would not be so much in evidence.
Mr. NICHOLS. Any brief that I would submit to-day would be of no very great aid to your committee.
The CHAIRMAN. You can file a brief at any time before the hearings are over, at the end of the month. Mr. LONGWORTH. Where are your plants ? Mr. NICHOLS. We have them all over the country. Mr. LONGWORTH. You have a number of them ? Mr. NICHOLS. Yes, sir; we have about 25 of them.
At a later date the witness filed the following statement of General Chemical Co. regarding the Underwood bill to amend the Chemical Schedule of the tariff act.
New YORK, JANUARY 27, 1913. Hon. Oscar W. UNDERWOOD, Chairman, Ways and Means Committee, House of Representatives,
Washington, D. C. Sır: In accordance with your request to our vice president, Mr. W. H. Nichols, jr., at the hearing of 7th January 1913, we submit a few criticisms of the Underwood bill. We are of the opinion that no great injury would result by the adoption of the amendments to the duties in that portion of Schedule A with which we are familiar, and we would be willing to accept the proposed amendments with the exception of four articles, namely:
“1. Magnesium sulphate: Epsom salt and kieserite.—Pagej 11, line 22, onetenth” and in lieu thereof insert “one-fifth.” Page 22, between lines 19 and 20 insert "88a kieserite."
Kieserite contains about 60 per cent sulphate of magnesia in an impure state, which has always been on the free list (paragraph 602 of present tariff act); its only use is as a raw material for Epsom salt and for which it is the only commercial raw material; it must all be imported since this country has no deposits thereof. If the understanding be correct that, in general, raw materials are to be duty free, then kieserite should be definitely placed on the free list in some such manner as that proposed; the bill, as at present framed, leaves open to serious discussion whether or not kieserite is dutiable under paragraph No. 45 of H. R. 20182.
In any event, we believe that sulphate of magnesia or Epsom salt should be taxed as heretofore, namely, one-fifth of 1 cent per pound, plus any tax that may be assessed against kieserite, and we so request, the reason being that 1 pound of kieserite produces about 1 pound of Epsom salt.
In this connection it is only just to you and to us to point out that on page 229 of report No. 326 on Schedule A, kieserite is not mentioned as a raw material for Epsom salt; the statement there made that Epsom salt is obtained from a by-product in the making of liquid carbonic acid was true some years ago, but no longer represents the actual state of affairs. It may very well be that this incorrect statement led to the omission of kieserite from the free list of H. R. 20182.
2. Sodium sulphid.—Page 19, line 25, erase "sulphid of, and.” Page 20, line 1, before "cyanide” insert sulphid of, containing not more than 35 per cent of true anhydrous sodium sulphid, one-fourth of one cent per pound; containing more than 35 per cent of true anhydrous sodium sulphid, one-half of one cent per pound.”
In the manufacture of sulphid of soda two distinct and clearly differentiated commercial qualities exist and are so recognized and so treated in the trade. They are known as “crystal” and “concentrated” respectively. “Concentrated” contains rougly twice as much actual active material as crystal;” "crystal" seldom, if ever, contains more than 35 per cent true anhydrous sulphid of soda, whereas "concentrated' rarely contains less than 60 per cent true anhydrous sulphid of soda. “Concentrated” can and does therefore, weight for weight, perform twice the work of “crystal;” “concentrated” is in a more advanced stage of manufacture than is "crystal.” These iacts are our reasons for suggesting that concentrated” should bear twice the duty imposed on "crystal.” We are convinced therefore that for purposes of fair taxation ft would be better to define the grades of sulphid of soda by their actual content in anhydrous sulphid, and suggest that the two classes be distinguished by drawing a line between sulphids containing more than 35 per cent and those containing less than 35 per cent. It would seem that such a classification would be better than “crystal" and “concentrated."
We agree to the 50 per cent cut in duty on "crystal" as proposed in H. R. 20182.
3. Acetic acid.- Page 21, line 4, after pyroligenous” insert "containing not more than 65 per cent of true acetic acid.” Page 2, line 7, before “benzoic” insert “acetic acid containing 65 per cent or more of true acetic acid, 2 cents per pound.”
In the chemical manufacture of acetic acid there are at present several processes in use, and the average resulting product contains about 65 per cent of true acetic acid. In order to produce acids of higher strength, it is necessary to add another step in the manufacture. Since it is a fair general statement that acetic acid of more than 65 per cent strength is a different article of manufacture from acid below 65 per cent, and is in a more advanced stage, and since the actual value of acetic acid is greater the greater its strength, we accept the placing of the weaker acid on the free list and ask for the retention of the present duty rate of 2 cents per pound on acid of a strength above 65
4. Nitrate of soda.–Page 23, between lines 9 and 10, insert “95a soda, nitrate of, or cubic nitrate."
Nitrate of soda is now on the free list (paragraph 677). It is omitted from the free list in H. R. 20182 and would therefore presumably be assessed at 10 or 25 per cent duty according to the classification finally adopted for it; at any rate its position now is ambiguous. Nitrate of soda comes exclusively from South America, the United States importing between 400,000 and 500,000 tons annually; none is produced in this country. About 40 per cent is used in agriculture as fertilizer; about 40 per cent is used in explosives; about 15 per cent is used in chemicals; about 5 per cent is used in miscellaneous.
It is essentially a raw material and its omission from the free list must be an oversight.
The duty on many items in the chemical schedule might, however, we believe, be advantageously retained as in the present act, or even raised, without reducing importations or affecting prices.
In the United States the chemical industry as a whole is not evenly developed. The manufacture of fertilizers is its largest branch and is absolutely unprotected by any tariff. In the manufacture of heavy chemicals, sulphuric acid, muriatic acid, and nitric acid, there is either no duty at all or it is a noneffective duty. The large number of mineral salts made from these acids are dutiable and furnish some revenue. They are subject to attack from Europe, and the tariff placed upon them is simply a means of collecting revenue rather than in any sense a protective measure.
Coal-tar dyes and medicines are other branches of great importance, but they can hardly be said to exist in the United States. A moderately high duty on these products would, we believe, neither restrict the importation thereof nor seriously affect the selling price of the finished products consuming them. Paragraphs 487 and 592 of the present free list might safely be put on the dutiable list at a duty of 30 per cent ad valorem or even higher, and paragraphs 536, 639, and 491 might be raised to 15 or 20 per cent.
The cengus bulletins show the total revenue under Schedule A in 1911 to have been 4.06 per cent of the entire revenue collected under the existing act, while for the previous 10 years the average tariff collected from Schedule A was only 3.42 per cent. The average rate of duty on all of the schedules is 41 per cent and the average rate of duty on Schedule A is 23 per cent.
A study of the appended table will make it obvious that Schedule A has never been treated as a source of revenue. Consideration from this point of view may well result in the Government's pursuing a diffenert policy.
The chemicals manufactured by this company on which a duty is assessed, are as follows: Sodium hyposulphite, sodium sulphid (crystal and concentrated), sodium phosphate, trisodium phosphate, sodium sulphite (crystal and anhydrous), sodium silicate, bichloride of tin, tin crystals, alum products.
These are all dependent upon cheap sulphuric acid, and when Europe is permitted to dump its biproduct acid in this country in the form of such salts, it simply deprives the United States of an outlet for its own acids. If these importations are to be allowed then we strongly recommend the Government's collecting a revenue thereon, which it can do without the least risk of increasing the cost of the articles to the consumer. Respectfully submitted,
GENERAL CHEMICAL COMPANY,
Rough analysis of Schedule A yielding 4 per cent of total tariff revenue.
STATEMENT OF THE COCHRANE CHEMICAL CO., BOSTON,
Boston, Mass., January 2, 1913. Hon. OSCAR W. UNDERWOOD,
Chairman Committee on Ways and Means, Washington, D. C. DEAR SIR: We, the Cochrane Chemical Co., of Boston, a Massachusetts corporation, beg to present our views on the proposed tariff reductions in Schedule A.
Our principal product is sulphuric acid, on which there is now a duty of one-fourth cent per pound. We admit that the full amount of this duty may not be necessary in the case of competition with the European nations, where freight rates form a natural barrier. In the case of Canadian competition, however, the situation would be dangerous to the American sulphuric-acid producer.
Canada is rich in raw material, viz, pyrites, and with cheaper labor can, if the duty is removed, flood our markets, while we would be unable to retaliate so long as she retains her present tariff, fortified by a "dumping clause.” Under these circumstances disadvantage is obvious.
We believe it would be only fair to our interests to have a similar dumping clause, especially if the duty should be entirely removed.
We further believe that it is not only unwise but impossible to intelligently draw up the chemical schedule until the various mineral schedules-- which deal with our raw materials, such as lead, zinc, bauxite, etc.-have been settled. As the manufacture of chemicals is by far the most complicated and technical of any of the industries of the countries, it is a schedule not to be drawn up hurriedly.
In closing, we think that the most practical policy and fairest to all concerned would be somewhat as follows:
First. Eliminate the tariff peaks by reducing excessive rates, so that the advantages of protection may be more equitably distributed among its beneficiaries.
Second. Abolish tariffon raw materials essential to American industries in order to compensate for lower rates upon the manufactured products.
Third. Reduce duties upon manufactured articles gradually by enforcing as far as possible a moderate percentage of reduction each year for a period of years. Yours, very truly,
COCHRANE CHEMICAL Co.,
STATEMENT OF POWERS-WEIGHTMAN-ROSENGARTEN CO.,
MANUFACTURING CHEMISTS, PHILADELPHIA, PA.
PHILADELPHIA, January 6, 1918. The Hon. OSCAR W. UNDERWOOD, Committee on Ways and Means, House of Representatives,
Washington, D. C.: Citric acid is now assessed at a duty of 7 cents per pound. This duty, which is a trifle less than 25 per cent ad valorem, should be allowed to remain undisturbed, as great advantages are possessed by the foreign makers owing to cheaper labor, cheaper apparatus, and cheaper reagents which enter into its manufacture.
This article is made from citrate of lime, which is imported from Sicily and the West Indies, and also from lime juice obtained from the West Indies.
These raw materials, citrate of lime and lime juice, should remain upon the free list. There is no country in the world which imposes an import duty on either of them. Respectfully submitted.