PARAGRAPH 87-LIME.

To which no reply has as yet been made. If approved, the following will be sent him:

"Commission has, with approval Secretary of War, rejected all bids under Circular 721 and accepted offer Atlas Portland Cement Co. continue old contract, $1.60 barrel, rebate 84 cents per bag. This offer filed before opening bids, Circular 721."

In view of all the above I would therefore request your approval of the recommendation from Col. Goethals to cancel all the bids under Circular 721 and continue with the Atlas Portland Cement Co. at the figures in their old contract, with the result in saving to the Government of approximately 20 per cent.

Lime, five cents per one hundred pounds, including weight of barrel or package.

See also argument of American Portland cement manufacturers, page 449.

LIME.

STATEMENT OF HERMAN W. HUKE, ESQ., REPRESENTING THE ROCKLAND & ROCKPORT LIME CO., OF MAINE.

The CHAIRMAN. Mr. Huke what paragraph do you desire to speak to?

Mr. HUKE. Paragraph 87, Schedule B. My name is Herman W. Huke; address, Torrington, Conn.

Mr. Chairman and members of the committee, I am here representing the Rockland & Rockport Lime Co., of Rockland, Knox County, Me., to submit the following memoranda of facts relating to its busi

PARAGRAPH 87-LIME.

ness and to the manufacture and sale of its product, and I do this in respectful but earnest protest against the removal of the present duty of 5 cents per hundred pounds of lime.

This corporation has an investment of $3,700,000, representing an honest acquisition of property without bonus or watered stock.

It does not own or operate all the limekilns and limerock quarries in Knox County, but it does own and operate a large number of them, and consequently manufactures and sells a very considerable proportion of all the lime produced in that section of Maine. Its average annual output, based upon the standard unit of 200 pounds of lime to the barrel, is 1,500,000 barrels, and its capacity, if market could be found, is easily 2,500,000 barrels per annum.

Its product is used almost entirely for building purposes, and its market is confined practically to the New England States and the city of New York.

The cost of labor is the principal single factor in the cost of a barrel of lime. This labor cost to the Rockland & Rockport Lime Co., up to the time of shipment, is 37 cents on every dollar expended, and by the operation of this corporation there is distributed to the wage earners in a community of about 12,000 people a sum amounting annually to $325,000.

Limerock is abundant in the Province of New Brunswick, and the markets in the northern part of the State of Maine are now being supplied with lime from that source. This provincial lime is manufactured either on or in close proximity to the seaboard, and a removal of the existing duty, coupled with the lower wage prevailing there and more favorable water freights, would enable that lime to secure the New York and New England markets now supplied with lime from Maine and other American States.

The lime business generally in the East has been far from profitable in recent years, and this corporation, organized originally in 1900, . has earned and paid no dividends on its stock since 1901, and was forced to reorganize in 1911 on a basis by which the shareholders were assessed for $300,000.

During a period of eight years, including the year 1912, the average annual net profit has been less than 4 cents per barrel.

The shareholders feel that the removal of the duty of 5 cents per hundred pounds of lime, or a little more than 10 cents per barrelin itself a sum in excess of any profit yet shown-will impose a burden that is bound to make failure inevitable and that will ruin the industry without good cause or reason.

The CHAIRMAN. That is all.

The witness presented the following brief:

THE WAYS AND MEANS COMMITTEE OF THE SIXTY-SECOND CONGRESS,

Washington, D. C.:

The Rockland & Rockport Lime Co., of Rockland, Knox County, Me., submits the following memoranda of facts relating to its business and to the manufacture and sale of its product, and does this in respectful but earnest protest against the removal of the present duty of 5 cents per 100 pounds of lime:

Capital invested. This corporation has an investment of $3,700,000, representing an honest acquisition of property without bonus or watered stock.

Extent of operations. It does not own or operate all the limekilns and limerock quarries in Knox County, but it does own and operate a large number of them, and

78959°-VOL 1-13- -30

PARAGRAPH 87-LIME.

consequently manufactures and sells a very considerable proportion of all the lime produced in that section of Maine. Its average annual output, based upon the standard unit of 200 pounds of lime to the barrel, is 1,500,000 barrels, and its capacity, if market could be found, is easily 2,500,000 barrels per annum.

Products and markets. Its product is used almost entirely for building purposes, and its market is confined practically to the New England States and the city of New

York.

Labor.-The cost of labor is the principal single factor in the cost of a barrel of lime. This labor cost to the Rockland & Rockport Lime Co., up to the time of shipment, is 37 cents on every dollar expended, and by the operation of this corporation there is distributed to the wage earners in a community of about 12,000 people a sum amounting to annually $325,000.

Conditions in New Brunswick.-Limerock is abundant in the Province of New Brunswick and the markets in the northern part of the State of Maine are now being supplied with lime from that source. This provincial lime is manufactured either on or in close proximity to the seaboard, and a removal of the existing duty, coupled with the lower wage prevailing there and more favorable water freights, would enable that lime to secure the New York and New England markets now supplied with lime from Maine and other American States.

Conditions in New England. The lime business generally in the East has been far from profitable in recent years, and this corporation, organized originally in 1900, has earned and paid no dividends on its stock since 1901, and was forced to reorganize in 1911 on a basis by which the shareholders were assessed for $300,000.

During a period of eight years, including the year 1912, the average annual net profit has been less than 4 cents per barrel.

Conclusion. The shareholders feel that the removal of the duty of 5 cents per 100 pounds of lime, or a little more than 10 cents per barrel-in itself a sum in excess of any profit yet shown-will impose a burden that is bound to make failure inevitable and that will ruin the industry without good cause or reason.

ROCKLAND, ME., January 6, 1913.

ROCKLAND & ROCKPORT LIME CO., By H. A. BUFFUM, Assistant Treasurer.

A SUPPLEMENTARY BRIEF CONCERNING LIME, FILED BY THE ROCKLAND & ROCKPORT LIME Co., oF ROCKLAND, ME., FEBRUARY, 1913.

First. The American tariff on lime is 5 cents per 100 pounds, including weight of barrel or package. (See par. 87, tariff act of 1909.)

Second. The Canadian tariff on lime is 12 cents per 100 pounds, including weight

of barrel, bag, or cask. (See Canadian customs tariff 1907, item 290.)

Third. The American tariff is not prohibitive. Example:

(A) Bangor, Me., is 55 miles from Rockland, Me., the center of the lime-manufacturing industry of the North Atlantic States.

(B) Bangor, Me., is 205 miles from St. John, New Brunswick, the center of the lime-manufacturing industry on the Canadian coast.

(C) Freight by rail from St. John to Bangor, 205 miles, per barrel, 20 cents; duty (including weight of barrel), per barrel, 11 cents; total freight and duty, St. John to Bangor, 31 cents.

(D) Freight by water, Rockland to Bangor, 60 miles, per barrel (no duty), 6 cents; differential in favor of Rockland, per barrel, 25 cents.

(E) Notwithstanding this differential, St. John is an active competitor for and does business in Bangor, Houlton, and other parts of Maine. In the Bangor district over 800,000 pounds (4.000 barrels) were imported last year, besides the importations in other ports of entry in Aroostook County, viz, Fort Fairfield, Caribou, and Vanceboro. In addition to the imports in the Bangor and other districts in northern Maine, there were also imported last year through the Portland customs district over 8,000,000 pounds (40,000 barrels).

Fourth. The high rate of the Canadian tariff absolutely prevents the American lime manufacturers getting trade in the maritime Provinces, and gives the St. John manufacturers a monopoly of the trade.

Fifth. With any change in duty (American tariff is now 60 per cent lower than the Canadian tariff, being 5 cents American as against 124 cents Canadian per 100 pounds),

PARAGRAPH 88-GYPSUM.

the Canadian lime manufacturers will extend their trade zone and gain absolute control of the Atlantic-coast trade, as well as of the trade of the States bordering on the Canadian line, and also of some of the Middle States a long distance therefrom.

Sixth. The Canadian lime manufacturers in the maritime Provinces, being in a foreign country, have a serious advantage over their American competitors in the matter of freight by water. They can ship their product in foreign bottoms to all the principal consuming points on the Atlantic coast, whereas the American manufacturers must use (and rightly so) American bottoms for this coastwise trade.

Seventh. In view of the facts herein stated, your petitioner, the Rockland & Rockport Lime Co., of Rockland, Me., a lime-manufacturing company organized in 1901 with $3,700,000 paid in, reorganized in 1911 and $300,000 more cash paid in, upon which no dividend has been paid since 1901 except one of 3 per cent on $587,000 of preferred stock, a company giving employment to over 500 people, having a pay roll in excess of $350,000 per year, distributed among a community of 12,000 people, earnestly protest against the lowering of the present duty, for if it is lowered it will without doubt cause our company to suspend business, thus entailing a complete loss not only to our stockholders, but also to the local community, by throwing out of work a large number of loyal workmen who are dependent upon us for livelihood for themselves and their families.

Ninth. We conclude with the following:

(A) No single individual company or group of companies control the American lime trade. Lime is manufactured in all parts of the United States. The sharpest competition exists in this commodity, so much so that lime is now sold and has been sold for a number of years at prices too low to allow a fair margin for profit, and there have been large losses to persons and companies engaged in this line of business.

(B) The Canadian tariff, 12 cents for 100 pounds, is protective, and, so far as the American Atlantic coast lime manufacturers are concerned, it is an absolutely prohibitive tariff.

(C) The American duty of 5 cents per 100 pounds (only 40 per cent of the Canadian duty) is not prohibitive. It is a tariff for revenue only. Respectfully submitted.

PARAGRAPH 88.

ROCKLAND & ROCKPORT LIME CO., By HENRY S. LYONS.

Plaster rock or gypsum, crude, thirty cents per ton; if ground or calcined, one dollar and seventy-five cents per ton; pearl hardening for paper makers' use, twenty per centum ad valorem; Keene's cement, or other cement of which gypsum is the component material of chief value, if valued at ten dollars per ton or less, three dollars and fifty cents per ton; if valued above ten dollars and not above fifteen dollars per ton, five dollars per ton; if valued above fifteen dollars and not above thirty dollars per ton, ten dollars per ton; if valued above thirty dollars per ton, fourteen dollars per ton.

For sulphate of lime, see F. A. Reichard, page 309.

GYPSUM.

STATEMENT OF MR. FRANK A. WILDER, PRESIDENT OF THE SOUTHERN GYPSUM CO., NORTH HOLSTON, VA.

The CHAIRMAN. Mr. Wilder, what paragraph do you wish to refer to ?

Mr. WILDER. Paragraph 88, section A, in connection with the duty on crude gypsum, of 30 cents per ton.

I wish to speak briefly and merely to correct certain erroneous impressions that may have been made by the first speaker before this committee yesterday morning. This speaker said, if I understood him correctly, that importations of crude gypsum were decreasing; that the imported gypsum was used for purposes quite different from

PARAGRAPH 88 GYPSUM.

those to which domestic gypsum is applied; and that imported gypsum does not come in competition with the domestic gypsum; and on these grounds he asks a reduction of tariff on crude gypsum from 30 to 20 cents, the duty before the act of 1909 having been 50 cents. As a matter of fact, figures given me yesterday by the Bureau of Statistics show that the importations of crude gypsum are steadily increasing. Standing at about 190,000 tons in 1901, they arose to 288,781 in 1909, 340,359 in 1910, 342,517 in 1911, 426,500 in 1912.

A reduction of the duty of 10 cents a ton might increase imports 100,000 tons and reduce domestic production by the same amount, but if this should be done it would be at the expense of the revenue derived from gypsum importations and to the injury of certain of the younger gypsum companies, which felt very severely the 20-cent cut in the duty on crude gypsum in 1909.

Practically all of the imported gypsum is used in the manufacture of wall plaster of just the same nature that the mills using domestic gypsum make. The imported article is quarried easily directly on the coast in Nova Scotia, is brought to the coast cities by cheap barge freight where it is milled, and then again transported by low water rates for distribution all along the Atlantic coast, for use in the coast cities and for shipment inland.

By way of illustration, the freight rate on wall plaster from New York and Virginia producing points to the city of Washington is $2.60 per ton, and as a consequence plaster made from domestic gypsum competes with great difficulty here against plaster made from Nova Scotia gypsum, milled at Chester, Pa., and New York City.

For 500 miles inland mills using domestic gypsum feel the competition severely. Farther inland, on account of increasing freight rates, this competition is not felt.

The domestic gypsum mines and mills within this radius of competition are located in central and western New York and in southwestern Virginia. Six or seven of the 50 or more mills in the United States are within this zone of competition.

The Southern Gypsum Co. (Inc.), built its mill in southwest Virginia five years ago, counting on the market in the Southeastern States, as those markets stood under a 50-cent tariff. It felt severely the 20-cent reduction in 1909. During the past four years the production of gypsum in Virginia has grown from practically nothing to 90,000 tons in 1912, 55,000 tons of which were produced by the Southern Gypsum Co. and the balance by a neighboring mill.

This tonnage is not sufficient to permit of economic operation and we have been striving for a yearly output of 80,000 tons. The effect of a slight change in competitive conditions will be realized when I state that the business is handled on the narrow margin of 30 to 40 cents a ton, and our markets are crowded back from the coast at every slight change in this competitive condition.

I believe that you will agree with me that it was proper and desirable that the statement made yesterday to the effect that domestic production would not be affected by further reduction in the tariff on crude gypsum should not go unchallenged.