PARAGRAPH 91-MICA. competition in our line and in the electrical insulating line. The local competition will take care of that end of it. Mr. JAMES. So far as you are concerned you are willing to have the tariff reduced on the finished product if a reduction is made on the raw material? Mr. STORRS. Not speaking for our friends. Mr. JAMES. But speaking for yourself? Mr. STORRS. Yes. Mr. DALZELL. How many friends do you include in that? Mr. STORRS. About 10 different concerns. Mr. DALZELL. You speak for 1 in favor of reduction and for 10 against it. Mr. STORRS. I am not advocating reduction on the finished product. Mr. DALZELL. I say you are against a reduction on the finished product, and the 10 others are in favor of it. Mr. STORRS. No; they are against it. Mr. DALZELL. You are against it also? Mr. DALZELL. Then you are all of one mind. per The CHAIRMAN. I understood the witness to say as far as he sonally was concerned he had no objection to a reduction on the finished product, but he could not speak for his friends. Is that correct? Mr. DALZELL. I understand; 1 out of 11. Mr. STORRS. If the committee will allow me, I would like to give some of my time to Mr. Jefferson, who can speak in regard to that. Mr. HILL. Do you import any mica ground? Mr. STORRS. No, sir. Mr. HILL. Mr. Chairman, while this matter is under consideration, and for your information in the consideration of the bill, I want to call attention to and ask the gentleman's opinion about a matter. There is somewhat of a misconstruction of this paragraph. After this law was passed in 1909 ground mica made from scrap, worthless in the dump heap, was made dutiable as a manufacture of mica, just the same as the finished piece of mica for a stove, automobile, or anything of that kind. Just the ordinary waste scrap, which was ground up and shipped in here as a manufacture of mica. The Treasury Department made a ruling on it, and ruled adversely against that, and admitted it at a lower rate, as in my judgment it should be. But I think the language should be now corrected in some way, SO that it should not be construed at least with the highest grade of an article made from sheets of mica. Mr. PAYNE. There does not seem to be any trouble about that. Ground is imported at 20 per cent. Mr. HILL. On the manufactured article? Mr. PAYNE. No. Mr. HILL. That is the way it comes in Mr. PAYNE. The ground is imported at 20 per cent. Mr. HILL (continuing). Because the Treasury Department have ruled arbitrarily upon the manufactured article. The CHAIRMAN. Your suggestion is PARAGRAPH 91-MICA. Mr. HILL (interposing). I have not any suggestion to offer. I simply desire to call it to the attention of the committee, and for that reason I asked the gentleman if he imported any ground mica. Mr. STORRS. No; but I understand that ground mica is imported under the general division of scrap materials. Mr. HILL. No; that is not right. Some consideration should be given to placing it somewhere, so that there would be no doubt about it. Mr. STORRS. Very likely that would be held to come under the language proposed by us, "Mica, unmanufactured, cut or uncut." It certainly is unmanufactured. The CHAIRMAN. Do you agree with what Mr. Hill has said about ground mica being the same as raw material, that there is no real advance in manufacture? Mr. STORRS. That is a legal point about which I am not prepared to argue. The CHAIRMAN. As a business point, are you familiar with ground mica? Mr. STORRS. We do not have anything to do with it. Mr. Chairman, could I give the balance of my time to Mr. Jefferson ? The CHAIRMAN. You have not any time left. Mr. PETERS. One moment. What would you think of changing the duty from a compound duty to an ad valorem duty? Mr. STORRS. I am afraid serious objection to that would be raised by the miners of American mica, because they need the specific duty. They feel that they do, in order to keep the market upon the American mica. Mr. PETERS. If the duties were changed from a compound duty, do you think it should rather be a specific duty? Mr. STORRS. I think the specific duty would be more equitable. Mr. PETERS. I notice the importations have decreased under the Payne bill from $768,000 in 1910 to $540,000 in 1912. Could you enlighten us as to any reason for that? Mr. STORRS. I do not understand the figures that way. The figures we have for the last three years show that importations have increased over 1908 and 1909. Exhibit A in our brief is taken from House Document 1504, and from later information furnished by the Department of Commerce and Labor. If these figures are correct, they show a marked increase in importations since the reduction in the Payne bill. Mr. PETERS. I am referring to table 26 of our handbook. Mr. STORRS. May I not submit a memorandum to you on that point later rather than take up the time of the committee? The CHAIRMAN. We would be glad to have you do that, and if you will submit it before 5 o'clock to-morrow night it will go into the hearings. Of course, it can go in at any time before the general hearings are closed, but it would be published with some other schedules and probably be lost if you do not get it in before 5 o'clock to-morrow night. The CHAIRMAN. The next witness is Mr. W. E. Wells. Mr. WELLS. Mr. Chairman, Mr. Burgess and I are both here for the same purpose, representing the same people. Would it be agreeable to you to have him present his argument first? PARAGRAPH 91-MICA. The CHAIRMAN. As a general thing, we can not let witnesses swap, but in this case as you both come right together, and as Mr. Burgess follows you, you may swap places with him. Mr. WELLS. Thank you. BRIEF SUBMITTED BY MICA ASSOCIATION. Committee on Ways and Means, House of Representatives, Washington, D. C. JANUARY 8, 1913. SIRS: The above association, comprising persons, firms, and corporations engaged in business relating to mica as manufacturers, importers, dealers, and miners, whose names are subscribed hereto, respectfully petitions that the above-mentioned paragraph be amended to read as follows: 91. "Mica, unmanufactured, cut or uncut, three cents per pound and ten per centum ad valorem; built up mica, and all manufactures of mica, or of which mica is the component material of chief value, ten cents per pound and twenty per centum ad valorem.” This paragraph in the act of 1909 reads as follows: 91. "Mica, unmanufactured or rough trimmed only, five cents per pound and twenty per centum ad valorem; mica, cut or trimmed, mica plates or built-up mica, and all manufactures of mica, or of which mica is the component material of chief value, ten cents per pound and twenty per centum ad valorem.' The changes asked are reductions of the duty as follows: Present duty. ad valorem. Unmanufactured or rough trimmed $0.05 per pound and 20 per cent $0.10 per pound and 20 per cent Proposed duty. $0.03 per pound and 10 per cent ad valorem. $0.03 per pound and 10 per cent ad valorem. REASONS FOR PROPOSED REDUCTION OF DUTY. Much of the mica used in the various branches of industry is required to possess special characteristics which do not pertain to any mica mined in the United States. Especially is this true in the case of electrical machinery, which furnishes the largest field for the use of mica, there being no insulating material that can be substituted for mica in many electrical appliances. For instance, in commutators for motors and dynamos it is necessary to use either the amber mica of Canada or the India mica because of their being softer than the American mica and therefore wearing down uniformly with the alternate layers of copper. The larger proportion of the mica consumed by the electrical industry is used in making built-up or reconstructed mica in the form of plates, boards, rings, segments, and special forms. This is an insulating material of vital importance to the industry, made of mica films molded together with an adhesive material into various forms. The greater softness, superior cleavage, and elasticity of the Canadian amber and the India mica make it requisite to use these grades to supply a product of the necessary quality. In making mica lamp chimneys it is necessary to import the clear India mica, as no other mica can be obtained that possesses all the three requisite qualities as follows: Absolute clearness, perfect cleavage, and pliability, such that it can be rolled into cylindrical form without cracking. The mica mined in the United States has its own field, chiefly for use in stoves, washers for spark plugs, etc. Attached hereto and marked "Exhibit A," and printed on page 8, is a statement obtained from the Department of Commerce and Labor, showing importations of mica for 5 years ending June 30, 1912, which includes the period during which the act of 1909 has been in force, with the average value per pound of the mica imported and average ratio of the entire duty paid, figured on an ad valorem basis. From this it will be seen that the duty collected under the present act on mica imported during the 3 years PARAGRAPH 91-MICA. ending June 30, 1912, averaged 35.87 per cent ad valorem on the rough-trimmed mica and 37.12 per cent on the cut mica. It seems to the petitioners that this is too high a rate of duty on raw material, the bulk of which is of a quality radically distinct from any similar native product and which must be imported regardless of the amount of the home product available. Your petitioners respectfully submit that the present rate of duty on raw mica adds an unnecessary and unreasonable burden of cost to the price the American consumer must pay for those articles that must be made of the grades of mica that are not produced at home. Attached hereto and marked "Exhibit B," printed at page 9, is a statement showing the actual imports of mica for the past 6 years, as in Exhibit A, but figured at the proposed rate of duty. Our proposed duty, figured on the importations of the last 3 years would average 19.45 per cent on the uncut, and 15.12 per cent on the cut mica. The price of amber and India mica has advanced continually for the past 5 years and very rapidly for the last year on account of the limited supply of this material and the increasing demand for same. That the reduction of duty asked for on this schedule will not injuriously affect the production of American mica is shown by the fact that the home production increased in the years 1910 and 1911 over that of 1909 in spite of the reduction of $0.01 per pound on uncut and $0.02 per pound on cut mica provided for by the tariff act of 1909. This is shown by the statement annexed hereto and marked "Exhibit C," taken from the "Production of Mica in 1911," by Douglas B. Sterrett, published by the United States Geological Survey. In recommending the change in wording, which puts cut and uncut mica under the same rate of duty, we desire to effect a simplification of this provision and to eliminate the existing confusion in classifying imports, which frequently arises because of the varying methods of preparing mica for shipment in the various foreign markets, and to prevent the frequent discussion as to whether mica should be classified as "rough trimmed" or "cut," which is continually arising between the importers and the customs authorities and which has often resulted in litigation. Of the 7,276,312 pounds of mica imported in 5 years, as shown by Exhibit A, 84.6 per cent was unmanufactured or rough trimmed only and only 15.4 per cent cut or trimmed, so this proposed change in classification will affect only a small percentage of the total importation. It will be noted that your petitioners do not ask for a reduction on built-up mica and manufactures of mica but respectfully urge that the phraseology of the latter part of this paragraph remain as in the present act. The foreign manufacturer of built-up mica or mica board, who pays no duty on his raw material, can export his product to the United States and pay the present duty at a lower cost than that at which the American manufacturer can turn out his product. Under the present act the American manufacturers of built-up mica pay a duty on their raw mica of 5 cents per pound and 20 per cent. Therefore, on a basis of 14 cents per pound valuation for raw India mica films, the total duty amounts to an ad valorem rate of 55 per cent. The foreign manufacturer imports built-up mica board on an approximate valuation 54 cents per pound and pays a duty of 10 cents per pound and 20 per cent ad valorem, equivalent to an ad valorem duty of 40 per cent. Thus the American manufacturer of mica products pays a higher rate of duty on the raw material which he must necessarily import than his foreign competitor pays on the competing finished product. This difference is further accentuated by the lower labor costs favoring the foreign competitor. We feel that it would be a serious injury to those of your petitioners who are engaged in manufacturing to reduce the rate of duty on manufactures of mica as comprised in the last part of the mica paragraph. It is stimated that well over 5,000 people are employed in working up mica into manufactured products in the United States, while not more than 350 or 400 are employed in mining American mica. ESTIMATE OF EFFECT OF PROPOSED CHANGE ON IMPORTS. As to probable decrease or increase in the imports likely to be brought about by the proposed reduction, it is difficult to estimate the effect of this change with any degree of certainty. If business conditions continue as favorable as at present, it is fair to assume an increased importation, as it is shown by Exhibit A that after the reduction of $0.01 and $0.02 a pound in the tariff act of 1909 the importations for the three following years showed considerable increase. PARAGRAPH 91-MICA. Further, the prevailing upward tendency of the price of Canadian and India mica will tend to keep up the revenue from this source. PROPOSED CHANGES IN PHRASEOLOGY. Our suggestion as to change in phraseology applies only to classification as between "rough trimmed" and "cut" mica and our reasons for suggesting this change are set forth in a previous paragraph. SUGGESTIONS AS TO ADMINISTRATIVE FEATURES. This same change that we have recommended in regard to classification will tend to simplify the administration of the tariff act as regards the paragraph in question. Respectfully submitted. THE MICA ASSOCIATION, Comprising Chicago Mica Co., Valparaiso, Ind., by A. W. Pickford, president; Joseph Huse & Son, Boston, Mass., by Fedr. R. Huse; The Macallen Co., Boston, Mass., by Louis McCarthy, treasurer; Mica Insulator Co., Schenectady, N. Y., by E. C. Wood, vice president; Eugene Munsell & Co., New York City, by Lewis W. Kingsley, president; North Carolina Mica Co., Boston Mass., by F. R. Huse, treasurer; The Palermo Mica Co., New York City, by W. H. Steinmuller, president; A. O. Schoonmaker Co., New York City, by A. O. Schoonmaker, president; Storrs Mica Co., Owego, N. Y., by A. P. Storrs, president; Watson Bros., Boston, Mass., by F. L. Watson. CHARLES P. STORRS, EXHIBIT A.-Mica-Imports and duties. [From H. Doc. No. 1504 and later information furnished by Department of Commerce and Labor.] UNMANUFACTURED OR ROUGH TRIMMED ONLY. |