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velopment of this great Portland cement industry was made possible by the laws that have governed the importation of foreign cements. Thus, by the introduction and development of the uses for this new building material, the deforestation of the United States has possibly been postponed for many years.

One of the newer uses of concrete is in road construction. Not only do most engineers recognize concrete as the best known material for foundations, but during the last few years no top surfacing is used, the concrete taking the wear. The first cost is very little greater than macadam, and the fact that little or no repairs are necessary permits money ordinarily expended for repairs to be used in improving more miles of road.

In concluding this branch of the argument, it may be stated that the American cement industry is also finding foreign markets. The table of production, imports, and exports (below), covering the last 11 years, indicates clearly that the industry, so far as the world's markets are concerned, is not being stifled.

The danger of admitting foreign cement at any reduced duty is a danger to prosperity. In times of world panics America is made the dumping ground of Portland cement by European nations, and this is particularly the case in view of the fact that Portland cement forms one of the most important articles of ballast for foreign vessels coming to this country for cargoes of the products of the soil. The points of heaviest imports of foreign cement are Charleston, Savannah, Pensacola, Mobile, New Orleans, and Galveston, where foreign vessels come for outbound cotton cargoes. The same applies to the Pacific coast, where not only Belgian, German, and English cements come in in ballast in vessels coming for grain cargoes, but also Chinese and Japanese cement made by the cheap labor of the Orient; and all this in the face of the fact that within a few miles of San Francisco there are four cement works in actual operation. Two other plants have lately been built in Washington, north of Seattle, and these plants have also felt the inroads of foreign cement.

About two years ago 10 of the largest cement plants in the Dominion of Canada were consolidated under a single management. A lowering of cement duty might enable them to dump cement into the northern border States at prices ruinous to the United States mills now supplying that district. The mills in New York, New Jersey, Pennsylvania, Ohio, Michigan, Indiana, Illinois, and Washington would be seriously affected, and as the mills in these States produce to-day 67 per cent of the output of the whole country, it can be readily seen what a detrimental effect such a reduction would have on the entire industry.

Table showing production, imports, and exports, in barrels.

In conclusion, it is but fair to say to the committee that there is no trust in the Portland cement industry, and the course of prices during the last few years indicates this very clearly. The best reason for this is stated by Mr. Edwin C. Eckel, in his report on the cement industry for 1906, Department of the Interior, United States Geological Survey, where, on page 11, he states:

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Perhaps the most marked feature of American economic history during the last decade has been the manner in which industry after industry has become consolidated in control, so as to approach more or less closely to monopoly. This has been particularly well marked in the iron and steel industries, and it is worth considering how far a similar evolution is likely to affect the cement industry. At present the cement industry is the most individualistic of the larger branches of manufacture. No 'trust,' nor even any approach to a monopoly, is now in existence, newspaper statements to the contrary notwithstanding, and, in the writer's opinion, the nature of the cement industry renders it impossible that any such large degree of consolidation of interest can take place as to result in permanently or unfairly high prices for the product.

"When the history of both successful and unsuccessful 'trusts' is examined, it will be seen that the only way in which a permanent monopoly can be secured and retained by any consolidation is by the control of the supply of raw material, by the absolute control of basic patents, or by the control of transportation. Any trust which disregards this history, and is content with simply consolidating all or most of the existing manufacturing plants, is in line for disaster; for supplies of raw materials being still available for outsiders, the first advance in prices will be the signal for the erection of competitive plants. If, on the other hand, the raw materials can be cornered, or processes can be monopolized, or transportation can be controlled, there is no possibility of competition. This experience, though unobserved or disregarded a decade ago, is now generally borne in mind.

"The bearing of these facts upon the future of the cement industry is obvious enough. If there is any possibility that one large cement corporation can acquire control of most of the available deposits of cement material in the United States, it will be possible to form a real American cement trust,' to defy competition, and to raise prices to an unwarranted level. If, on the other hand, it is impossible to form such a corner in cement rock or in cement-making processes, or permanently to control transportation, it will be impossible for any consolidation to raise prices permanently above the normal.

"On careful consideration of the matter, it will be seen that only one answer is possible. It is safe to say that more than 20 per cent of the entire area of the United States is underlain by raw materials out of which cement could be made if prices were forced high enough. The Standard Oil Co., the United States Steel Corporation, and the United States Government could not, by combining their financial resources, hope to acquire control of any large fraction of this immense reserve of raw material.

"Since the supply of limestone and clay can not be cornered, since no essential parts of the processes of manufacture are covered by exclusive patents, and since transportation companies will seek freight, it is reasonable to believe that no cement combination can succeed in permanently raising prices to unfair rates. As already stated, there is nothing in existence at present even remotely approaching a cement trust. The trouble is rather in the other direction. The prosperity of the last few years, with reports of enormous profits earned by existing companies, has led to the building of many new cement plants. A fair proportion of these are either too small, badly located, faulty in design, or badly managed; and with the first general business depression and the commencement of falling prices such plants will necessarily become a danger to the entire industry. The condition at present is therefore marked by excess rather than lack of competition."

In other words, the impossibility of "trust" ownership, due to the immense amount and wide distribution of the raw material from which cement is made, predicted by Mr. Eckel in 1907, has been borne out by the development of the industry during the last four years.

In conclusion, we respectfully ask the retention of the present rate of duty.

ADDENDA.

In connection with the duty on Portland cement, your petitioner desires to call your attention to a small but important branch of the industry, that being the manufacture of white nonstaining Portland cement.

Cement of this character has been manufactured in this country for about six years. Prior to 1908 the production was very small and was confined to three companies. Two of these companies have since gone out of business, and one has been added, the production of the country at present being by two companies only. The principal reason for the small number of producing factories in this country is the known high cost of production and the steady importation of cements of foreign

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manufacture at prices which make competition without profit. The production figures prior to 1908 are not available, but from that date are as follows:

This product being white in color and nonstaining, by which is meant that when used as a mortar for setting, pointing, and backing fine-textured stones that they are relieved from the staining which occurs when brought into contact with ordinary Portland cement of commerce, is growing in demand but much more costly to produce on account of the scarcity of proper raw material and the more expensive manufacturing process.

Ordinary gray Portland cement is burned with coal, while in the manufacture of white Portland cement the burning process must be accomplished by the use of fuel oil, which is a very substantial factor in the cost of white Portland cement. The advance in the price of this commodity being 33 per cent in 1912 over 1911, and contracts made for the year 1913 are at an advance of 55 per cent over the price at which fuel oil was sold in 1911.

Prior to the manufacture of white nonstaining Portland cement in the United States the demand in this country was supplied by importation from foreign countries and sold at a price largely in excess of the prices prevailing to-day. The advent of American white nonstaining Portland cement has materially reduced the price of cements of this quality, at prices, however, which have been established by the American manufacturers.

The prices at which white nonstaining Portland cements are being sold by American manufacturers have provided only a reasonable margin of profit, and the rapidly increasing cost of production, as shown herewith, will at an early date make the manufacture of these grades of Portland cement unprofitable, and we feel that a protection for the purpose of fostering a growing industry should be accorded through the medium of an ad valorem duty which will be more in proportion to the value of the commodity than exists at present.

We fear that unless the protection is accorded American manufacturers will be forced out of business and that the higher prices to American consumers in effect prior to the manufacture of this commodity in the United States will be restored. It is shown in this brief that between 1903 and 1911 the duty on Portland cement has ranged from 24.4 per cent to 20.3 per cent.

The average selling price of white nonstaining Portland cement is $2.75 per barrel of 400 pounds at the mill, including the value of the package, the present duty of 8 cents per 100 pounds, or 32 cents per barrel, being equivalent to but 12 per cent ad valorem.

Your petitioner therefore respectfully submits that an increase in the duty to 25 per cent ad valorem on white and nonstaining Portland cements, by reason of the facts and figures herewith submitted, can be consistently asked for, and it is respectfully urged that such be enacted.

STATEMENT OF MR. H. G. MOULTON, OF ROCKLAND, ME.

Mr. MOULTON. I represent the New England Portland Cement Company, which owns a deposit of clay and limestone at Rockland. Me., and hopes to develop in New England a cement industry where none now exists. There is not any cement plant nearer New England than the Hudson River. The nearest plant is on the Hudson River, the Atlas and the plants of the Lehigh Valley, and that leaves all of Massachusetts and Connecticut, and that portion of the country is either dependent on them or on foreign importations. They are not at present dependent upon foreign importations because statistics show that the trade movement is the other way on cement. We think there is an opportunity to manufacture about a million barrels of cement right in New England. Furthermore, at Rockland

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we would have the only cement plant on the Atlantic seaboard, and it would be in a position to ship by water all the way down the coast, through the Panama Canal, and compete on the Pacific coast and in South America.

We are willing to meet any kind of fair and square competition. We expect to go after the business, but we will have to get lower prices than prevail at present to get the business, because we will have to meet the established companies. We do not think that we should in the future have to meet the dumping of surplus stocks from Germany. At the present time conditions are very active abroad and very prosperous. People are fully employed and cement prices are high and there is a big demand, so that we would not meet competition there at the present time.

Mr. KITCHIN. The statistics show that we are doing the dumping on the other countries.

Mr. MOULTON. Yes; because of conditions that now exist and because of high prices abroad. But, by the way, we are not dumping; we are simply exporting legitimately wherever we can export on an even freight rate basis. Where the freight rate was the same, we would probably export to Cuba, perhaps, and to parts of South America. But suppose there should come a depression, a sudden depression in Europe, on account of war or anything that might spring up. Suppose a depression of that kind would come, which would curtail by half or by a quarter, the European consumption or demand. Then Germany and Belgium and England could afford to let go of a good deal of cement at a very much less price than prevails now.

Furthermore, the freight rates from Europe to the United States are at the highest level in my knowledge. You all know of the recent phenomenal increase in freight rates, due to the immense growth of traffic and of commerce. What would happen to this freight rate should the European depression spring up, or a depression of commerce? It would cut the freight rate down so low that a duty of 30 cents a barrel, which is what the present duty amounts to, would just about protect our manufacturing cost. It seems to me that that argument alone justifies the maintenance of the duty, if the New England Portland Cement Co. has a valid right to go into existence.

In other words, I think if the New England Portland Cement Co. has a valid right to go into existence in New England; if it serves the public interest and it is to the best interests of this country that the company should go in there, then we are justified in having just such a duty as might prevent wrongful and hurtful competition in times of depression abroad. An investor coming in to establish a cement plant in a new district can not look to present conditions alone; he must look ahead and see what might happen to his investment a few years hence. I think the establishment of that cement plant in New England will be serving a very laudable public aim. Mr. KITCHIN. Your company is going to be a company that is going to fight what is known as the Portland Cement Trust?

Mr. MOULTON. There is no Portland cement trust, as shown by the result of my investigations.

Mr. KITCHIN. There has always been considered one. If there is a trust, you people are going to be right in with them.

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Mr. MOULTON. If there is any trust we can fight them tooth and toenail. We stand on our own feet and go into that district independently

Mr. KITCHIN (interposing). You had better be prepared to fight those Portland cement fellows in the United States, because they are fighting.

Mr. MOULTON. We have considered that, and we have every opportunity to fight them. We have certain districts that we can legitimately serve and can be in a position, as I say, to fight any competition that might exist in the United States.

The CHAIRMAN. Have you already invested your money?

Mr. MOULTON. To some extent.

The CHAIRMAN. I was going to say if you had not you could come down to Alabama and we would pretty nearly give you all the cement rock you want, and you can be protected by the freight rate, and be where they could not come after you.

Mr. KITCHIN. I would suggest that you get this foreign competition scare out of your mind and begin to fix your plans to fight the fellows inside of the United States.

Mr. MOULTON. That is what we have been doing, and I think it is no more than fair to give us protection against possible future dumping. That is all we ask. You know an investor putting his money into a new proposition looks to the future and asks all sorts of questions. I would not be afraid to put my money in and tackle them anywhere. I think we have got the skill and the courage and the knowledge of it, and I am not afraid to go up against any foreign technical man on such a question. But when you are asking an investor to invest his money, he looks ahead and asks as to the future, as to what conditions might be. And I think you ought to consider his future also.

Mr. DIXON. You want the duty left just as it is?

Mr. MOULTON. Yes, sir; that is it. It is not an exorbitant duty. It is only about 20 per cent.

Mr. KITCHIN. It looks very much like Mr. Hill, of Connecticut, and Mr. Payne, of New York, have just simply excited your fears unnecessarily about this tariff and the foreigners.

The CHAIRMAN. Mr. Moulton, your time is up.

Mr. DIXON. Is there anything else you want to present?

Mr. MOULTON. I was simply going to state that the putting of the tariff duty down would not, under present conditions, reduce the price of cement. It might do it in some years. We think that the establishment of that plant there, on an average over a term of years, would mean lower prices for the Atlantic seaboard, with the duty as it is now, than a reduction of the duty would give. That is my argument.

I thank you.

The witness filed the following brief with the committee:

THE NEW ENGLAND PORTLAND CEMENT CO. AND THE TARIFF.

The New England Portland Cement Co. owns deposits of limestone and clay at Rockland, Knox County, Me., and is developing these deposits with the intention of erecting at Rockland a plant for the manufacture of Portland cement. In the beginning the New England Portland Cement Co. hopes to supply cement to the