PARAGRAPH 88-GYPSUM. The cut of 40 per cent made by the act of 1909 seemed to be about our full share in the matter of tariff reduction for some time to come at least. Mr. HULL. From what section do you get your chief competition? Mr. WILDER. Competition from American producers is strong and active. Take the State of Alabama, as an illustration. Mills in central Oklahoma and Texas and central Kansas ship into Alabama on a freight rate about as good as ours. In the city of Atlanta, we meet the competition of this Nova Scotia material milled in New York and coming down by barge, landed at Brunswick, and shipped inland. We meet also western competition there. Mr. HULL. What does it cost per ton to mine gypsum in Nova Scotia ? Mr. WILDER. They do not mine. The mineral lies on the surface, and our material is all underground, and we have mining difficulties in connection with our ventilation, and so on. Their cost of putting the material on the barge is small. Their cost of handling and barging down and rehandling twice-putting the crude material into the mill at New York and Chester and again loading it onto the barges is something less than our freight rate into Washington, D. C., I would say, judging by the competition that we meet. That rate is $2.60. The CHAIRMAN. Are there any further questions? [After a pause.] That is all, Mr. Wilder. Mr. WILDER. I thank you. Hon. CARTER GLASS, Washington, D. C. SOUTHERN GYPSUM CO. (INC.), North Holston, Smyth County, Va., January 2, 1912. DEAR SIR: Within the last five years the gypsum industry in Virginia has been making rather notable growth, so that for 1912 the total output of gypsum and gypsum products from the two mills in Virginia will be close to 100,000 tons. The industry in Virginia can hardly be said to be on a paying basis yet, though prospects for the future are encouraging if no unexpected factors are introduced into the trade problem. The mill of Southern Gypsum Co. was erected five years ago and last year the mill of the United States Gypsum Co. was completed. These mills were constructed on the supposition that trade conditions might be counted on as reasonably permanent and that no new factors in the way of competition were probable. The Payne-Aldrich tariff bill, however, made a considerable reduction in the duty of 50 cents a ton which had previously existed on gypsum, and in consequence narrowed the market for the Virginia mills. Large quantities of Nova Scotia gypsum are imported into the United States, same being milled at Norfolk for land plaster and in New York City for wall plaster, and by cheap barge freight this material is scattered all down the coast and shipped inland. The production conditions in Nova Scotia are exceedingly favorable while those in Virginia are difficult. In Nova Scotia the mineral is quarried on the surface easily, while in Virginia it is mined under severe difficulties in the way of water and impurities that must be sorted out. Cheap barge transportation moves the Nova Scotia material as against heavier railroad freights on the part of the Virginia mills. A further reduction in the tariff will be felt severely by the Virginia mills, pushing the farther inland their market and so restricting it as to render doubtful the profitable operation of the mills, unless indeed prices are arbitrarily raised in the restricted territory near the mills that now receive finished gypsum products at moderate prices. PARAGRAPH 88-GYPSUM. Our competitors, especially those located in New York City, will doubtless endeavor to make it appear that no American industry will be especially affected by further tariff reduction, and this letter is written so that you may be informed of the facts. The writer believes in the principle of tariff reduction and the general tariff policy of the Democratic Party and at the same time thinks it proper to point out that within two years there has been a considerable reduction in the gypsum tariff, and that if ever the argument for infant industry has existed in connection with the tariff the argument applies at every point right now to the Virginia gypsum. The question of tariff on gypsum will be considered by the proper committee in Washington on January 7 or 8, 1913. Your assistance in seeing to it that the fact that Virginia as a large producer and has important interests at stake is not overlooked will be very greatly appreciated. Very truly, yours, SOUTHERN GYPSUM CO. (INC.), STATEMENT OF MONTAGUE LESSLER, ESQ., OF NEW YORK CITY. Mr. LESSLER. Gentlemen of the committee, I represent practically the same men, importers and manufacturers, that I did three years ago at the hearing. I represent the men on the seaboard who import plaster rock and crude gypsum from the two Provinces in Canada, and manufacture it into the material which, as brought out in the last hearing, is around us here. In the little memoranda which I will file, and which I would like to have printed with these few remarks, I have not attempted to elaborate the argument which was very thoroughly gone into at the hearing in 1909. The reasons which obtained then for placing this article on the free list obtain to-day. The comment that I would make to the committee is this: That it has been demonstrated the reduction to 30 cents per ton instead of the 50-cent rate has in no way interfered with the domestic production at all. The CHAIRMAN. What is the number of the paragraph to which you refer? Mr. LESSLER. Paragraph 88. The domestic production has gone up by leaps and bounds, and the last figure that I obtained was in 1910. I notice, however, in your tariff handbook that the domestic production in 1910 was about $12,000,000. Curiously enough the importations seem to have fallen off a bit. The point I care to elaborate is simply this, that it is as true to-day as it was then that the imported material is a local proposition only and comes in contact with the domestic production not at all. The farmers' free list as enacted in the bill passed by this House and the Canadian reciprocity act provided for gypsum. What I supposed would interest the committee a bit was the question of comparative price under the reduction to 30 cents. It has remained pretty steady both in the domestic and imported articles; that is, the manufactured articles made of the domestic and imported rock. This is notwithstanding the fact that all the material, the coal, the machinery, and the labor involved has to some extent, in fact, to a great extent, grown up very much on the seaboard. As A question asked me at the last hearing was on the subject of the income, as to this being a revenue producer to the Government. the committee can see that 50 cents a ton on the importation of 1907 PARAGRAPH 88-GYPSUM. brought a revenue to the Government of about $195,000, which, of course, under the reduced 30 cents per ton, has gone down in the neighborhood of from $102,000 to $111,000 a year. It is to be brought before the committee, however, that very little of this remains to the Government, for the reason that the costs of inspection are of course very large and very great. There is this to be added, that we as importers have helped the Government very mightily, and have saved the Government many thousand of dollars of expenses by our system of weighing and looking after these things for the inspectors put there by the Government. I feel in the very short time that the committee wants to hear me, and in view of the elaborate argument made three years ago, which is so handy to the committee, that there is very little to say except to point out to you that with that argument as a basis, with the other side, the opposition, fully represented (and I believe there is no opposition to-day), the committee reduced that to 20 cents, and in conference it was put at 30. I would respectfully ask that it be placed on the free list. That is all, Mr. Lessler. MEMORANDUM TO THE COMMITTEE ON WAYS AND MEANS OF THE HOUSE of RepRESENTATIVES, REQUESTING THAT PLASTER ROCK OR GYPSUM, CRUDE, BE PLACED ON THE FREE LIST. A duty of 30 cents per ton is levied on all importations of plaster rock or gypsum, crude, in section 88 of the Payne-Aldrich Tariff Act. It is respectfully urged that the time has come to place this article on the free list. A very full hearing was had on November 24, 1908, before the Ways and Means Committee, at which it was urged to reduce this produce from 50 cents per ton, the rate fixed in section 91 of the tariff act of 1897. The argument, the examinations, and the letters concerning gypsum will be found in volume 1 of Tariff Hearings, pages 634 to 692. Based on this hearing and these arguments, the Committee on Ways and Means made the rate 20 cents per ton, which, in conference, was finally made 30 cents per ton and enacted into law as section 88. The reasons advanced at that time by those in favor of the reduction obtain to-day, and the arguments against it are no stronger than those urged and advanced by the opposition. The native mining of gypsum has not suffered because of the reduction of the duty, but has shown a gradual and healthy increase, both in the tonnage of the product and its value. In 1909 the latest figures available of the domestic ton were those of 1907. The following is a table of the number of short tons mined and the value as given in the article "Gypsum" in Mineral Productions of the United States for the Year 1911: It may also be noted that the census report of the Bureau of Manufactures on the gypsum industry shows an increase of 3 mills in the United States calcining the crude product. At the time of the hearings there were 79 mills and there are now 82. It would seem, therefore, that the domestic production has not been affected by the lowering of the rate per ton (20 cents) either in quantity or value, and that there is a healthy natural growth to the domestic industry. As a matter of fact, the importa PARAGRAPH 88 GYPSUM. tion of the crude gypsum is so small in proportion to the domestic product mined that its competition is really negligible. It might also be added that the use of the imported crude gypsum seems really a local proposition, with the railway freight rates considered and the differential against the seaboard manufacturers. Just one word further as to the domestic product calcined. The price per ton to the consumer has kept pretty firm and nearly stable throughout the years intervening since 1909. There has been no increase in the number of plants calcining the crude gypsum imported from Nova Scotia, Cape Britton, and New Brunswick. The crude gypsum is brought to the Atlantic seaboard to ports between the extreme points of Portland, Me., and Norfolk, Va. The following table shows the tons imported and their value, with the amounts and duties paid from 1906 to date. These figures are taken from the Government publication, Imported Merchandise Entered for Consumption in the United States and Duties Collected Thereon. (See also, Imports and duties 1894 to 1907.) On the amount imported during the year 1912, 264,382 tons arrived at the port of New York, valued at $303,538, and paying a duty of $79,314. From July 1, 1912, to November 30, 1912, there arrived at the port of New York 148,500 tons, valued at $170,560, and paying a duty of $44,550. It would seem from these figures that there has not been a gain in the tonnage imported, while the domestic producer has gained largely. It might be added, and it is to be hoped, that this tonnage may become larger, as it involves the use of American ships, barges, and lighters and the employment of more men to carry the product. At the hearing in 1908 it was urged that in addition to an absence of reason based on the protection theory for the placing of this duty, that it was not even a real revenue measure. At that time it was figured that the gross return to the Government was about $195,000 a year based on an importation in 1907 of 390,000 tons of crude gypsum. It must be remembered that the Government had to expend an appreciable part of this money to inspect and oversee the tonnage. Were it not for the fact that the importers aid the Government by the use of patented machinery, hoists, lefts, etc., in the weighing and inspection, there would be nothing left for the Government from this duty. Based on the 1912 figure with the importation of 363,658 tons of unground gypsum, the gross revenue to the Government was $109, 197; hardly a revenue producer of any importance to the Government, when the cost of inspecting and weighing is taken therefrom. The 1897 tariff placed a duty of 50 cents per ton on crude gypsum (sec. 91), which was, as has been stated, reduced to 30 cents per ton in the 1909 bill. (See sec. 88.) The act of July 26, 1911, chapter 3 (Canadian reciprocity act), placed plaster rock or gypsum, crude, on the free list, probably on the theory of a general reduction on the raw material. The figures and estimates as to production, costs in Canada and the United States of the mined product, as well as those concerning labor, freight rates (both water and railway) have maintained about the same parity as 1909, when adduced before this committee at the hearing on November 28 of that year. It should be remembered, and it is true now as it was then, that your petitioners are situated in a large community, that their plants represent large investments, that they employ some thousands of laborers, skilled and unskilled, whose wages have advanced; that their plants are permanent, stable, solidly built mills, that each pays a large amount of taxes, to say nothing of the restrictions imposed by the authorities regulating the safety of the buildings and the health of the workers. All this means PARAGRAPH 88-GYPSUM. large sums of money, and the industry does need a lowering or abolition of the duty on the crude rock to maintain its stability in the face of a larger and larger domestic output, which has the advantage of cheaper initial cost, very much cheaper running expense, a decided differential in its favor in railway freight rates, and endless and bottomless pits with undeveloped areas as a source of supply of their raw material. It is respectfully submitted that plaster rock or gypsum, crude, be placed on the free list. Dated, New York, January 8, 1913. J. B. KING & Co., 17 State Street, New York City. KEYSTONE PLASTER Co., Chester, Pa. HIGGINSON MANUFACTURING CO., ROCK PLASTER MANUFACTURING CO., Newburgh, N. Y. New York City. CONNECTICUT ADAMANT Co., New Haven, Conn. WOTHERSPOON PLASTER MILLS (INC.), (Counsel, Montague Lessler, 31 Nassau Street, Borough of Manhattan, New York City.) BRIEF OF THE NEWARK LIME & CEMENT MANUFACTURING CO., NEWARK, N. J. NEW YORK, January 6, 1913. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, House of Representatives, Washington, D. C. DEAR SIR: In considering the rearrangement of the tariff, I urgently recommend that crude gypsum be placed upon the free list. This is the raw material used in the extensive manufacture of plaster of Paris along the Atlantic coast of the United States. For many years until the present tariff was instituted-it was on the free list. The duty brings the Government very little revenue, and in addition to the direct handicap which it imposes upon the manufacturing business here, it entails other disastrous consequences upon plaster manufacturing concerns on the eastern seaboard. I do not believe in any instance the Government weigher actually weighs the cargo as discharged. Physical conditions are such to make necessary that the material should be weighed on the scales of the consignee, by his employees; the customs inspector only oversees the procedure in a general way. As a consequence, very unsatisfactory disputes as to quantities and settlements are continually arising. In 1908, before the present tariff law was enacted, there were nine plaster manufacturing concerns in operation along the coast using Canadian rock-four in New York, one in New Jersey, one in Maine, one in Pennsylvania, one in Connecticut, and one in Boston. Now the number has been reduced to five, there being three in operation in New York, one in New Jersey, and one in Connecticut. This is due largely to the competition of plaster from the interior of the United States, which is, even at the seaboard, driving out of use that made from Canadian gypsum. It is only for the higher grades of product that the plaster made from Canadian rock is used throughout the interior of the country; and it is very unfair that this tariff discrimination should be made between the citizens of the same country. There is no foreign plaster imported, and the only effect of the duty is to give some United States manufacturers, who already have great natural advantages, an unfair advantage over their competitors. An indirect effect of the duty is also to impose an unnecessary tax upon the users of plaster of paris, who necessarily require this grade of goods. In conformity with the effect of duties on raw materials, the final cost to the consumer is reflected in a much higher price than that indicated by the tariff exaction itself. The arguments for and against this duty were set forth in the tariff hearings before the then Committee of Ways and Means, under date of November 24, 1908, copy of which I inclose herewith. I would especially call your attention in this pamphlet to the information regarding the gypsum combination of interior manufacturers. The evidence clearly shows artificial control of prices and a desire to control competition through tariff impositions. |