PARAGRAPH 3-OILS. cheap soaps, that a specific duty exclusively be assessed on this low grade of merchandise instead of the compound duties proposed in H. R. 20182, paragraph 70. Respectfully, Presented by Mr. C. Š. WELCH, of Park & Tilford. PARK & TILFORD. ALFRED H. SMITH CO. STATEMENT OF THE DODGE & OLCOTT CO., OF NEW YORK CITY, IMPORTERS AND MANUFACTURERS OF ESSENTIAL OILS, DRUGS, AND CHEMICALS. The WAYS AND MEANS COMMITTEE, NEW YORK, January 2, 1913. House of Representatives, Washington D. C. We have no specific recommendations to make at this time as to changes in duties; but we are vitally interested in the essential oil paragraphs of Schedule A, and are desirous of affording your committee any assistance we can to make these paragraphs reasonable, fair, and consistent with other correlated sections of the tariff. along this line we call your attention to the question of And Species as raw materials for the domestic manufacture of essential oils: We have no wish to oppose or bring in question the levying of a duty upon spices as spices that is, as foods or condiments; but the provisions of the bill passed at the last session, while doubtless intended to levy a duty upon certain spices as condiments, had a much farther reaching effect. For example, clove buds were made dutiable at the specific rate of 2 cents per pound. At that time the value of standard grades of cloves was approximately 10 cents per pound, which is about an average price under normal conditions. The proposed duty, therefore, was the substantial equivalent of 20 per cent ad valorem. On the other hand, oil of cloves, distilled from the clove buds, as an unenumerated essential oil was to be made dutiable at 20 per cent ad valorem. Under the present tariff the American distiller of oil of cloves has the protection of a duty of 25 per cent ad valorem on the oil, whereas his raw material, the clove itself, comes in free of duty. This house has distilled as much as 150,000 pounds of clove oil per annum, and it has been able to do so solely and absolutely because the raw material has been free of duty, whereas upon clove oil of foreign manufacture there has been a duty of 25 per cent ad valorem. Even as it is, however, the oil is sold here at next to no profit, the competition being extremely keen; but it is a "labor maker," without which it would be practically impossible to keep an essential oil factory in existence; and without the protection we have up to this time enjoyed we should have to abandon the industry. It is obvious that with a duty on the raw material amounting to 20 per cent or more ad valorem while the manufactured product itself pays only 20 per cent ad valorem, we are not only deprived of the protection we have PARAGRAPH 3-OILS. had, but are placed completely at the mercy of the foreign manufacturer, who has every advantage of us now in cost of labor, maintenance, and materials, besides having a profitable outlet for his by-product, while here we have none. A large proportion of all the clove oil distilled is used as the basic material in the manufacture of vanillin, a fine aromatic chemical. Last year's bill reduced the duty on vanillin to 10 cents per ounce, specifically, in the face of the new duty proposed upon the raw material, the clove bud. As will doubtless be shown to your committee by the vanillin manufacturers, such a reduced rate of duty on the finished product would hardly be sufficient to protect the American manufacturer even when his vanillin is manufactured from homemade oil distilled from free cloves. But if the domestic vanillin maker is to have the cost of his raw material advanced while the protection on his manufactured product is cut in half, he will simply have no chance whatever. He will have to abandon the industry or resort to an entirely different raw material which has never been employed in this country and which would yield no revenue whatever to the Govern ment. We simply ask for the continuance of a reasonable protection in a plain case where the raw materials of a long and well established industry are accidentally spices but are used for purposes entirely foreign to the usual and ordinary employment of spices. The situation is substantially the same as above stated in the case of the somewhat less important oils of pimento, nutmeg, and one or two others distilled from spices. We venture to suggest further that, while the essential-oil section, paragraph 51 in last year's bill was in this respect an improvement upon the Payne and preceding tariffs (which specified by name "essential oils" that do not and never did exist), it showed clearly that the provision was not drawn by one having anything like an accurate knowledge of the subject. It mentions by name, first, oil of peppermint for discriminative treatment, i. e., a specific duty of 25 cents per pound; then it proceeds to enumerate by name over 20 essential oils which, together with "all * * * essential and distilled oils, etc.," are to come under the horizontal duty of 20 per cent ad valorem. Among the oils thus enumerated are many whose real importance perhaps would warrant specific mention by name; but there are others, like chamomile, cedrat, jasmine, valerian, and the like, which are of no consequence whatever, being imported, when at all, only in the pettiest quantities, or, as in the case of the cedrat and jasmine, being little more than curiosities. Again, open to criticism are such specifications as "anise or anise seed," since there is no anise oil other than anise-seed oil; "citronella or lemon grass," indicating two names for the same thing, whereas the two oils of these names are widely different in character and value and no reason exists for linking them together; "rosemary or anthoss," perpetuated from former tariffs like the foregoing, in which the expression "or anthoss" is altogether meaningless. And there are others. We suggest that nothing substantial is gained by enumerating part of a general class in this way, especially if the enumeration is unscientific and includes members which are neither important nor PARAGRAPH 3-OILS. typical, while on the other hand such an enumeration is apt to open the door to unnecessary complications and confusion. We submit that only such oils should be enumerated by name as are to receive discriminative treatment by being assessed with special rates of duty different from the general horizontal rate; and that the general horizontal class should be covered by a single definitive specification similar to the one used in paragraph 51 for the residuary portion, say, "all essential and distilled oils and all combinations of same," etc. It should be borne in mind, however, that while not all essential oils are distilled, there being several important exceptions, neither are all distilled oils essential oils. DODGE & OLCOTT Co., By CHRISTIAN BRILSTEIN, Secretary. BRIEF OF VERONA CHEMICAL CO., MANUFACTURERS OF FINE CHEMICALS, CUSTOM DISTILLERS OF ESSENTIAL OILS. NORTH NEWARK, N. J., January 2, 1913. Hon. CHAIRMAN UNDERWOOD, Committee on Ways and Means, Washington, D. C. DEAR SIR: We beg to inclose briefs on paragraphs 5, 22, 51, 54-76, of the dutiable list; also a brief treating on "Spices." In reading same you will note we have not asked for an increase (one exception, see brief No. 3), but simply to leave the present duties remain, for the reason that a great number of the raw materials, especially those covered by paragraphs 23 and 24, have been taken off the free list and a duty imposed. This has evidently been done for revenue purposes and to give American manufacturers of these products a protection, and we can not object to this. In return, therefore, it would not be fair nor reasonable to lower duties on the finished products, especially as the duties now prevailing, to wit, 25 per cent, paragraph 5, and 20 per cent, paragraph 22, are not excessive, which is proven by the undeniable fact that there is a very large importation. Again, the chemical manufacturing industry, especially the one producing high-class products, is laboring under rather difficult conditions, and the duties allowed for the past years have always been very moderate compared to the 45 per cent and 60 per cent rates of the iron and steel and the textile industries. Progress has been comparatively slow, and we can not but too forcibly state that a further reduction, in the face of possible import duties on our raw materials, would place the American industry in a very precarious position. Surely it is not the intention of Congress to do that. A general downward revision may be necessary and in good order, but there are exceptions and these are some of them. The writer will be pleased to give testimony to the best of his ability any time convenient to the committee. Respectfully, yours, VERONA CHEMICAL CO., PARAGRAPH 3-OILS. BRIEF NO. 1. Paragraph 5. This paragraph covers a whole line of chemical and medicinal products. In fact, a great majority of the products that do not find special mention in other paragraphs fall in under this heading. We can truthfully claim that the present duty of 25 per cent is very fair and not too high, for it is safe to state that the importation exceeds the domestic production. So long as the paragraph is left written in this broad sense probably no exact figures can be given, besides many articles are imported without stating their exact nature or composition. While there may be comparatively few products that can be made here in competition to the imported goods, plus the proposed duty of 15 per cent, we do not hesitate to state that it is the honest opinion of every chemical and pharmaceutical manufacturer in this country familiar with the condition of the increased cost of labor, machinery, repairs, and nearly every item of expense, that a duty of 15 per cent means the shutting down and ceasing of many a manufacture now in operation. A duty of 15 per cent will mean a large importation of the overproduction from, especially, Germany, and that country will certainly welcome such a move on the part of the tariff legislators of the United States. We, as a good many other manufacturers, have capital invested, have spent a lot of time and money for the manufacture of products which fall under this paragraph, and we respectfully and earnestly request that no reduction is made. The consumption of these products is relatively limited, the cost of production, on account of increased expenses, as everyone familiar with the manufacture of chemicals in the United States will admit, is higher-all proves that we need a protection of at least 25 per cent, and that this rate is not excessive is, as above stated, undeniably proven by the fact that great numbers and quantities of these products are now imported. What argument can be more convincing than this latter fact? We have been manufacturing thymol and terpin hydrate for several years, and, we can state, without any profit to us. For example, on thymol the present duty of 25 per cent has not been sufficient to offset the increased cost of freight of the raw material from India to New York against the same from India to Hamburg. We are told the difference is about 1 shilling per hundredweight. As one gets only about 13-14 pounds thymol from 100 pounds raw material, you will note the shilling must be added to the 13-14 pounds finished product. Again, the resulting by-product, an oily cake, finds a very much better market in Europe, due to the relatively cheap cattle-food products found here, such as cottonseed cake, etc. The consumption in this country is equal to about 30,000 pounds-so you will note how very limited the manufacture can bewhich again increases the cost per pound. We suggest a fixed duty would be more satisfactory, and propose as a fair and reasonable rate 50 cents a pound. For terpin-hydrate the same arguments, practically, hold; the consumption is about the same, etc. In this case also a fixed duty would be far more satisfactory, and we propose 10 cents a pound as a reasonable rate. BRIEF No. 2. Paragraph 22. Exactly the same arguments apply here as we give in the case of paragraph 5 (see Brief No. 1). Paragraph 22 is very broad and far reaching in its application, and it is impossible to treat the subject matter of this paragraph except in a general way. We can state in addition in the case of the manufacture of coaltar products or preparations which are covered by this paragraph that the raw materials used fall mostly under paragraphs 23 and 24, and it is proposed to take both of these off the free list and place a duty of 5 per cent on the products mentioned in paragraph 23 and a duty of 10 per cent on the products mentioned in paragraph 24. In other words, it is proposed to lower the duties on the finished products and raise the duties on the raw materials. This is surely not in order and we again respectfully request and urge that no reduction is made in paragraph 22. BRIEF No. 3. Paragraph 51. We respectfully request and urge that after the words "peppermint 25 cents per pound," the following is inserted: "Clove, pimento or allspice, nutmeg, mace, patchouli, 35 per cent ad valorem." This is altogether necessary, for the new tariff (see paragraph 41) proposes a range of duties on the raw materials used for the distillation of these various oils which averages about 20 per cent ad valorem. A difference of 15 per cent, or a 35 per cent duty, is therefore very fair and reasonable. We respectfully urge the committee to give especial attention to this feature of the bill. PARAGRAPH 3-OILS. BRIEF No. 4. Paragraph 54. This paragraph covers a whole range of products, some of which must be imported and others which can be made in this country. We may state that the latter form a large minority. We manufacture two products covered by this paragraph, namely, heliotropin and terpineol. We respectfully request and urge that both of these products are taken out of this paragraph and given specifies duties as follows: Heliotropin 50 cents a pound, terpineol 6 cents a pound. Heliotropin. The raw material used for this article is camphor oil, which under the proposed tariff will pay a duty of 20 per cent; paragraph 54 proposes for heliotropin the same rate, namely, 20 per cent-this is therefore not just. Fifty cents a pound equals about 35 per cent of the selling price, but as we would have to pay a duty of 20 per cent on the raw material, camphor oil, the same is not excessive. Terpineol. The present duty on this article is 25 per cent. We manufacture this product, but owing to the increased cost of production (the item of labor enters here largely) far more is imported than we manufacture. A reduction of the present tariff is therefore entirely unnecessary and would be most unjust to the manufacturers of this country, of whom we are one. BRIEF No. 5. Paragraph 76. Vanillin. Present Payne rate, 20 cents per ounce. Proposed rate, 10 cents per ounce. We respectfully request and urge that the present rate be allowed to remain: (1) The rate was reduced from 80 cents to 20 cents per ounce in the last tariff-which in itself is already a tremendous cut. (2) We use the following raw materials: Cloves, caustic potash, acetic anhydride, bichromate of potash, sulphuric acid, benzol. (A) Cloves: These have always been on the free list; it is now proposed to place a duty of 2 cents per pound, which is equal to about 20 per cent ad valorem. (B) In the case of caustic potash we have a similar condition. This article has always been free; is now to be taxed with an import duty of three-fifths cent per pound. (C) Acetic anhydride: The duty now is 2 cents per pound plus 30 per cent for the container and there is no change proposed. (D) Bichromate of potash is made here, and we use the domestic article exclusively. (E) Sulphuric acid costs us fully 50 to 60 per cent more than the price paid by our German competitors. (F) Benzol: The proposed tariff places a duty of 5 per cent on this product; this probably means the price will advance nearly proportionately. The above is a brief résumé of the situation of the point of view of the raw materials used by us. The increased cost of labor, the more expensive special machinery used, in fact every item of cost and expense is higher here than abroad. These facts all go to prove a reasonable tariff is absolutely necessary. You will note that the proposed bill reduces the present tariff by 50 per cent, and of the six principal raw materials usedit is proposed to take three off the free list-and on another, acetic anhydride, there is no decrease, but the present rate is allowed to remain unchanged. In view of the foregoing we respectfully request that no change be made in the present rate of 20 cents per ounce. BRIEF NO. 6. The attention of the committee is respectfully called to the fact that a good many spices, etc., are used for two purposes in this country. First. As spices or condiments, and we can not discuss these uses and what effect a duty will have on the same. Second. Spices are also the raw materials for two very important industries now existing in the United States, the distillation of essential oils and the production of vanillin. The duties proposed in paragraph 41 equal about 20 per cent ad valorem and we claim, placing a burden of such high duties on the raw materials of two industries, is altogether out of proposition. If it is the intention of the committee to propose a tariff on spices used for food and spice purposes then some means should be devised whereby those used for manufacturing purposes can enter free of duty as before. They could perhaps be made unfit for human consumption is some way or the manufacturers could use and distill these raw materials under some suitable governmental control. We understand in France and Germany the latter method is used-evidently with some degree of success--otherwise the practice would not continue. It appears to us that the |