PARAGRAPHS 95-96 CARBON. The paragraph in the act reads as follows: Articles and wares composed wholly or in chief value of earthy or mineral substances, not specially provided for in this section, whether susceptible of decoration or not, if not decorated in any manner, thirty-five per centum ad valorem; if decorated, forty-five per centum ad valorem; carbon, not specially provided for in this section. twenty per centum ad valorem; electrodes, brushes, plates, and disks, all the foregoing, composed wholly or in chief value of carbon, thirty per centum ad valorem, We pray that this article be placed on the free list as coal gas retort carbon clinkers. Coal gas retort carbon, as its name denotes, is a by-product in the manufacture of illuminating gas where coal is exclusively used. There are two ways in which the manufacture of illuminating gas is carried on in this country-one where coal is used exclusively and the other where oil is used and produces what is known as water gas. Coal gas retort carbon is a residue which remains in the retorts and is only procured when these retorts are cleaned, which, in accordance with the style of the retort in use by the gas works, is done between three and six times annually. This material, which is nothing but a clinker or slag, is a morpheus carbon, and is formed on the inside of the retort, caused by the distillation of coal in the manufacture of illuminating gas. It is not an earthy or mineral substance, and should not be so classified as such in the tariff act. The gas works in the United States manufacturing gas exclusively from coal are very limited and are becoming less each year, because it is cheaper to make gas from oil, which is known as water gas. The residue or clinker from retorts making water gas is not the same material as the article referred to in this statement. It will not be many years before the manufacture of illuminating gas from coal is entirely abandoned. All manufacturers of electrical apparatus requiring carbon of this nature will be compelled to draw their supplies of this material from abroad, where, owing to the many different and varied uses of the by-products and other conditions both in England and continental Europe, it pays them to manufacture illuminating gas solely from coal, because they derive a large revenue from the sale of these by-products, such as sal ammoniac, coal tar, sulphate of ammonia, and many other articles which are produced in the distillation of coal from which illuminating gas is made. Therefore, it is necessary for the American manufacturers to depend on the production from abroad to keep them supplied. This material when ground is one of the principal factors in the manufacture of dry batteries. The annual consumption of this material in the United States is approximately between six and ten thousand tons per annum. The domestic production of this material is approximately fifteen hundred tons per annum. It is not nearly sufficient to cover the requirements, and the result is that importation has to be resorted to and a substitute for this material has to be used when, for some reason or other, this material can not be procured abroad. The substitute, which is petroleum coke, a residue obtained in the distillation or refining of petroleum, is not equal to coal-gas retort carbon clinkers and has to be mixed with a high-priced graphite to increase its efficiency equal to coal-gas retort carbon, which increases the cost of production of dry batteries. PARAGRAPHS 95-96-CARBON. With the ever-increasing dry-battery business there should be no restriction in the way of duty or otherwise over this factor, which plays such an important part in the manufacture of these batteries that are a necessity to a large number of our people. The revenue derived from the importation of this material at the present time is only a very minor item. In fact, the duty being removed would not be of any moment in the revenue of this Govern ment. It is impossible to manufacture coal-gas retort carbon commercially in this country. The present duty on this material does not benefit any manufacturer, nor does it protect any American labor. All the efforts of gas manufacturers in this country are directed toward one point, and that is to decrease the accumulation of this clinker in the retorts, which in itself is the best evidence that the duty does not benefit them, as they do not regard any duty placed upon this article any inducement whatever to manufacture this material. We respectfully pray that your honorable committee will recommend to change paragraph 95 of the act of 1909, eliminating carbon clinkers from "carbon not specially provided for," at 20 per cent ad valorem, and place same on the free list, and that you define this as coal-gas retort carbon clinkers. BRIEFS SUBMITTED ON THE SUBJECT OF CARBON BRUSHES. ST. MARYS, PA., January 3, 1913. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, House of Representatives, Washington, D. C. DEAR SIR: We take the liberty of addressing you in regard to a revision of the tariff on carbon brushes. The present rate of duty on carbon brushes, carbon electrodes, and carbon plates is 30 per cent. This is not sufficient to protect the American_manufacturers, as in the process of manufacture of carbon brushes and electrodes the labor is more than one-half the cost, and as the labor in Germany and France is so much cheaper we feel that a protection of 50 per cent should be given domestic manufacturers to equalize the difference in the cost of production. Every carbon brush, in going through the factory, is handled from 20 to 31 times before it is ready for the consumer. The importation of carbon brushes is on the increase right along, although the American product is equal in every respect to the foreign goods, and therefore the duty should be increased on all classes of carbon material for the protection of the American manufacturer. We trust that you will give this question your careful consideration. Thanking you, we are, Very respectfully, yours, Hon. OSCAR W. UNDERWOOD, SPEER CARBON Co., ST. MARYS, PA., January 4, 1913. Chairman Ways and Means Committee, House of Representatives. DEAR SIR: Our president, Mr. J. S. Speer, wrote you on the 3d instant in regard to the present rate of duty on carbon brushes, electrodes, and other carbon articles (paragraph 95 of the law of 1909). He requested me to send you samples of our product to show the amount of labor on same, and I am sending under separate cover three small samples of carbon brushes, showing the hand milling which requires not less than 20 separate operations before the brush is finished. This is a brush that is sold by us at 3.3 cents each, and is equal in every way to the imported brushes. PARAGRAPHS 95 96-CARBON. The importation of carbon brushes and electrodes is very large and is increasing very rapidly, and the present tariff rate does not give the American manufacturer sufficient protection. The rate at present is 30 per cent, and this should be increased to 50 per cent for the reason that this higher rate is necessary to equalize the difference in the cost of production. Yours, truly, Hon. OSCAR W. UNDERWOOD, SPEER CARBON CO., Chairman Ways and Means Committee, House of Representatives, Washington, D. C. DEAR SIR: As manufacturers of carbon brushes for electric motors and generators we are interested in the tariff on this class of material. Competition at the present time is very keen, as there are a large number of manufacturers in this country. Under the present tariff, the sale of foreign brushes has increased materially, and we are very apprehensive of the results that might follow from any curtailment of protection. One point which we desire to emphasize is that the cost of production of carbon articles is composed largely of labor. Our pay roll constitutes by far our largest item of expense, and the labor is of a kind that is extremely well paid. We feel that the circumstances warrant a tariff of 60 per cent. Our company is engaged exclusively in brush manufacture, and whether we expand to include other carbon materials, for example, electric-light carbons, will depend largely upon what measure of protection we enjoy. It is our firm belief that a reduction from the present tariff will result in forcing out of business at least some of the smaller plants which are now manufacturing carbon. Very truly, yours, CORLISS CARBON CO., President and Manager. PROTEST AGAINST REDUCTION OF DUTY ON CARBONS. CONGRESSMAN UNDERWOOD, PARAGRAPH 95. STACKPOLE CARBON CO., Chairman of the Tariff Committee, Washington, D. C. HONORED SIR: We wish to enter our protest, as manufacturers of carbon and carbon products, against any reduction of duty on this product. We are obliged to pay $1.75 to $2 for ordinary labor in our works to manufacture the same carbon that the foreign carbon manufacturers pay as low as 35 to 50 cents a day for labor to do the same class of work. The writer absolutely knows this to be the case from the fact that several years ago we contemplated manufacturing a grade of carbon that was manufactured by a foreign carbon works, and one of the parties that was interested in this foreign carbon works contemplated taking stock in our company and gave us the manufactured cost of this carbon abroad in their plant and what it would cost to make it in this country; and I consider the present duty on carbons is entirely too low. Even at the present duty on foreign carbons the foreign manufacturers are in a position to undersell us on certain lines of carbon, and one case in particular we quoted our cost price on a particular carbon to find out how low the foreigner could go, and the exporter of this particular foreign carbon went below the price we quoted, which was cost; so this will give you some idea for the reasons that we enter our protest against reduction of the tariff on carbon products and the reason why we ask for an increase. If the foreign carbon manufacturers can bring their product here and pay the present duty and undersell us in cases I know of where we have quoted our cost price in order to find out how cheap they could sell their product at a profit, we certainly have just reasons to ask for an increase in duty on this particular product. Our books are open to inspection of any committee, and we are not trying to earn dividends on watered stock or inflated valuations. Our investment represents actual cash value and every share of stock that has been issued by this company has been paid for in cash. Hoping you will give this some consideration, we remain, Yours, very truly, STACKPOLE CARBON CO., PARAGRAPHS 95-96-CARBON. BRIEF OF THE CHAVANT MANUFACTURING CO., JERSEY CITY, N. J. PARAGRAPH 95. The COMMITTEE ON WAYS AND MEANS, JERSEY CITY, N. J., January 6, 1913. Washington, D. C. GENTLEMEN: I desire to file this brief in support of a proposed amendment to the pravision in paragraph 95, tariff act of 1909, for articles composed of earthy or mineral substances. Following is paragraph 95, tariff act of 1909, as it is desired to have it amended, the words to be omitted being inclosed in brackets and those to be substituted being italicized: 95. [Articles and wares] Manufactures or materials composed or consisting wholly or in chief value of earthy or mineral substances, not specially provided for in this section, whether susceptible of decoration or not, if not decorated in any manner, thirty-five per centum ad valorem; if decorated, forty-five per centum ad valorem; (No change suggested for remainder of paragraph, which relates only to * * carbon articles.) The above amendment was drawn in order to accomplish what is believed to have been the original intent of Congress and to restore to said paragraph a wide variety of manufactured articles composed of earthy or mineral substances which have been excluded by judicial construction. The reason for the particular words suggested in the proposed amendment is found in the peculiar history of this paragraph and its prototypes. Probably in no paragraph in the tariff have repeated legislative efforts to broaden its purview met with so little success. The provision first appeared as paragraph 86, in the Wilson tariff of 1894, enumerating "all articles composed of earthen or mineral substances, including lava tips for burners." The General Appraisers held that this did not cover putz pomade, a completed article composed of mineral substances and ready for immediate use, being a metal polish put up in small tin boxes in the form of paste. The reason given for this conclusion was that, though it was not questioned that the merchandise-being an "article" and "composed of * * * mineral substances"-was literally within the language of the provision, yet it should be excluded therefrom and thrown into the catch-all clause for articles not enumerated in the act, on the ground that the paragraph was not intended to "cover a substance without form," such as the paste in question, also because the enumeration of lava tips "would indicate that Congress did not intend the provision to cover everything that was wholly or chiefly of mineral origin." (Ramsperger case, G. A. 3280, T. D. 16584.) The law was then amended in a broadening way, "wares" being added to the previous word "articles," "earthen being changed to "earthy," "composed" being made more definite by the addition of "wholly or in chief value," and the provision for lava tips being omitted. (Par. 97, Dingley tariff of 1897.) But the courts still further narrowed the purview of the paragraph by holding that the presence of the expressions "if not decorated" and "if decorated" implied intention to exclude articles not susceptible of decoration. (Dingelstedt v. U. S., 91 Fed., 112; U. S. v. Downing, 201 U. S., 354.) The effect of these authoritative adjudications was to give the paragraph a more restricted operation under the act of 1897 than the really narrower paragraph of the preceding act of 1894 had received. In Notes on Tariff Revision, a publication prepared for the use of the Ways and Means Committee in drafting the Payne Act of 1909, this comment was made (p. 109): * * * "These judicial determinations have been followed in hundreds of decisions by the lower courts and by the Board of General Appraisers. The rulings cited have all but emasculated paragraph 97 and have undoubtedly caused a tremendous loss to the revenue; for the articles excluded from classification under this paragraph, where they would have yielded 35 per cent duty, have, in the vast majority of instances, been relegated to the provision for nonenumerated articles dutiable at only 20 per cent. The remedy is to amend the paragraph so as to provide that such articles of earthy or mineral substances as would otherwise fall within the terms of the paragraph shall not be excluded therefrom because they are not susceptible of decoration, but shall be dutiable under the provision therein for such articles when not decorated." With this information before it as to the results of its legislation, Congress made another effort to extend the paragraph by adding the words "whether susceptible PARAGRAPHS 95-96-CARBON. of decoration or not." These new words have, of course, been given some effect, but the courts have followed the previous policy of imputing to the paragraph the narrowest possible intendment. For instance, the Court of Customs Appeals held that the law did not cover merchandise which unquestionably was "articles or wares,' and was "composed wholly or in chief value of mineral substances." (Salomon v. U. S., 2 Ct. Cust. Appls., 92, T. D. 31635; U. S. v. Embossing Co., 3 Ct. Cust. Appls., T. D. 32536; Bartley v. U. S., 3 Ct. Cust. Appls., T. D. 32961.) * * * As showing the narrow distinctions forced upon the court, it is pointed out that in two of these decisions the merchandise was held to be "articles" within the meaning of the catch-all clause of paragraph 480 (under which the court placed them), but not "articles" within the meaning of the paragraph now in question.. The Salomon case, just cited, related to powdered tale. The reason given by the court for excluding it from the mineral paragraph was that the words "composed of” meant "made up of a mineral substance, and not the substance itself, which the ground talc clearly is." In the Embossing Co. case the articles in dispute consisted of so-called plasticine and plastilina, which were concededly of mineral origin and were completed articles, ready for the ultimate consumer, being in small boxes in a form adapting them for their intended use, chiefly by young children for modeling purposes, both at school and as toys at home. It is found at the toy counters of department stores. The reason given for excluding it from the paragraph was that the law was not intended to cover merchandise having no "specific or definite form or shape." This decision was followed in the Bartley case, which related to so-called plate powder put up in small boxes for retail, with sealed printed coverings containing directions for use, therefore being in its final condition and completely ready for use by the ultimate consumer in polishing silver. The court said that the paragraph could not be held to cover an impalpable powder like that just described. The Board of General Appraisers went even further and held that the word "composed" should, by reason of its etymological significance, be construed as relating only to compositions, and not including articles made from a single material; but this ruling was reversed by the Customs Court. (U. S. v. Tamm, 2 Ct. Cust. Appls., 425, T. D. 32173.) The foregoing is not meant as a criticism of the various judicial tribunals concerned in making the rulings referred to, nor as suggesting that strong reasons did not exist for their conclusions. The application of their decisions, however, leaves the law uneven in its practical operation. Suppose the plate powder in the Bartley case had been pressed into cakes, the same as some other well-known articles of similar use, probably it would then have been held to be within the mineral-substance paragraph, because having a specific form. The same is true of the tale involved in the Salomon case, if, instead of having been ground to powder, it had been ground into disks, cubes, or other forms. From the legislative standpoint no reason exists why in the one case the duty should be 20 per cent and in the other 35 per cent. Our purpose is to secure the adoption of a form of words that will result in a uniform rate of duty, whether the merchandise shall have a specific form or otherwise. Under the traditional legislative policy that increases duty in accordance with the labor that goes into the production of an article, the rate of 35 per cent would have been much more appropriate on plasticine, plastilina, and plate powder, which are carefully prepared articles, than on some of the much simpler articles of a specific form which the court has held were properly so assessed. In order to meet the decisions above cited, to secure symmetry of rate, and to restore the effect which it is very likely Congress intended the provision should have from the very beginning in 1894, it is necessary to use words not subject to the limitations which the courts have attached to the present form of expression. It is thought that this can surely be accomplished in the way suggested at the beginning of this brief, namely, by striking out the ineffective words "articles and wares" and inserting in lieu thereof "manufactures and materials," as well as adding "consisting. The use of the word "manufactures" was suggested by the Customs Court in the Embossing Co. case, where it said: "Had Congress intended to change the meaning given to 'articles and wares' by the tribunals whose duty it was to interpret the paragraph, it could have done so very readily by substituting for the words 'articles and wares' the word 'manufactures.'" The word "materials" might not be necessary were it not for the strong judicial inclination to give the provision a narrow scope. It is possible, in view of this tendency, that the term "manufactures," by itself, would be held applicable only to |