PARAGRAPHS 95-96-CARBON. Mr. REISINGER. Yes, sir; from the imports. Mr. HILL. You know, of course, that there is a trust abroad? Mr. HILL. None in Germany? Mr. REISINGER. Absolutely none in Germany. Mr. HILL. You are sure there is no trust in Germany? Mr. REISINGER. None. I am very familiar with business over there. Mr. HILL. Who do you represent in this country? Mr. REISINGER. Myself. Mr. HILL. Who do you represent abroad? Mr. REISINGER. I do not represent anybody. I buy. Mr. HILL. You buy in the market? Mr. REISINGER. No; I buy from one manufacturer. Mr. HILL. What manufacturer is that? Mr. REISINGER. C. Conradty, Nuremberg, Germany, one of the largest manufacturers in the world. It is not a trust. Mr. HILL. You still think it would be entirely proper for you to buy carbons 12 feet in length as one carbon, and bring it in here, if the duty had not been changed? Mr. REISINGER. In lengths of 2 and 3 feet, and no longer, could carbons be imported on account of the excessive breakage. Mr. HILL. Why not? Mr. REISINGER. The longest carbon which could be imported without excessive breakage is 3 feet. Mr. HILL. Then you would cut the duty into three parts? Mr. REISINGER. There would be no use now in importing longlength carbons with a view of cutting them here into smaller sizes and thereby reduce the duty, because the present rate of duty specifies distinctly 65 cents per 100 feet, notwithstanding I am importing carbons as long as from 2 to 24 feet, which are, however, used in the lamps in that length. Mr. HILL. If you should happen to find out that there was a foreign trust in carbons Mr. REISINGER (interrupting). There is no foreign trust. I deny that, and I know what I am talking about. There is no trust whatsoever. There are four large competitors in Germany alone, fighting among themselves all the time; and there is some competition in France, too. Hon. OSCAR W. UNDERWOOD, HUGO REISINGER, 11 Broadway, New York, April 5, 1911. Chairman Committee on Ways and Means, Washington, D. C. SIR: I had the honor to appear before the House Committee on Ways and Means in December, 1908, with reference to electric-light carbons, when the hearings were had before that committee in December, 1908. You were at that time a member of this committee and showed great interest in the tariff on electric-light carbons. In order to refresh your memory on this question, I inclose herewith my statement and brief before that committee, as well as the statement of the National Carbon Co., known to the trade as the Carbon Trust. As you know, the original draft of the Payne bill called for a rate on electric-light carbons of 35 per cent ad valorem, which was subsequently changed by the Senate committtee to 70 cents per 100 feet, and finally to (as per Schedule B., paragraph 96): "Gas retorts, twenty per centum ad valorem; lava tips for burners, ten cents per gross and fifteen per centum ad valorem; carbons for electric lighting, wholly or partly finished, made entirely from petroleum coke, thirty-five cents per hundred PARAGRAPHS 95-96-CARBON. feet; if composed chiefly of lampblack or retort carbon, sixty-five cents per hundred feet; filter tubes, thirty-five per centum ad valorem; porous carbon pots for electric batteries, without metallic connections, twenty per centum ad valorem." With reference to the 35 cents per 100-foot rate, this does not come into question at all, and really seems to be a "joker," because the high price of petroleum coke in Europe prohibits the importation of these carbons, which are known to the trade as "lowgrade carbons.” The only carbons, therefore, which come into question for importation are highgrade carbons, made chiefly of lampblack, on which carbons the duty is 65 cents per 100 feet. This rate of duty, figured on ad valorem basis, at the rate of 65 cents per 100 feet, is all the way from 35 per cent to 125 per cent, depending on the type of carbons imported, an average, as near as I can figure out, of between 70 per cent and 80 per cent, which stifles all competition, and which means that the Carbon Trust here has absolutely its own way as regards prices. The Carbon Trust has become so strong by buying out every independent carbon factory in the United States and by the protection of the tariff. On account of the exhorbitant rate of duty, the consumer is compelled to pay much more for his carbons than if there were a reasonable rate of duty on this commodity. I claim that a duty of 20 cents per 100 feet would be more than ample protection on carbons, which, figured on an ad valorem basis, means about an average of 25 per cent. It is a fact that carbons can be manufactured as low here, if not lower, than abroad, because the raw material is right at hand, while abroad it has to be shipped from great distances. For instance, domestic carbons for inclosed arc lamps are sold by the Carbon Trust at from $18 to $24 per 1,000, while their cost of manufacture is only from $7 to $9 per 1,000, against the cost to me of my imported carbons, also for inclosed arc lamps, of from $10 to $14 per 1,000, f. o. b. European port; so it will be seen that even if the tariff were taken off altogether, the importers would still be compelled to ask higher prices than for the domestic carbons. Moreover, there are certain special carbons imported, of very fine grade, for use in moving-picture machines, flaming arc lamps, etc., which the trust is unable to make at all, and which could be sold to the consumer at much lower prices if there were a reasonable duty on carbons. Take, for instance, flaming arc-lamp carbons, which are used in lengths of 24 inches and cost between $30 and $40 per 1,000 carbons f. o. b. European port, the duty figures $13 per 1,000 carbons, or 1.3 cents each. As two carbons are used in a lamp and they burn only 17 hours, it means that for every trim the consumer has to pay a premium of 2.6 cents for duty alone, meaning per 1,000 pairs of carbons $26 duty. You will readily see that this is an exorbitant tax on such a great necessity to the country as light. I inclose clipping taken from a newpaper, showing the earnings of the National Carbon Co. (Carbon Trust) for the year 1910, which speaks for itself. This is certainly a good showing for a company which started out in 1897 with $4,500,000 actual capital and $5,500,000 watered stock. It may interest you to go over the discussion on carbons in the Senate on May 21, 1909, and I inclose herewith the Congressional Record of that date also. (See pp. 2335-2350.) I have taken the liberty to report to you in detail, and should you desire further information I am quite willing to go to Washington and see you at any time regarding the matter. I would also be thankful to you if you would let me know whether you are willing to bring the question up yourself or if this has to be done through some other Member of the House or Senate. Trusting to be favored with your kind reply, and thanking you in advance, I remain, sir, Yours, most respectfully, H. REISINGER. BRIEFS SUBMITTED ON THE SUBJECT OF CARBON PRODUCTS. WELLSVILLE, N. Y., January 6, 1913. Hon. OSCAR W. UNDERWOOD, Washington, D. C. DEAR SIR: We notice by the public press that there will be hearing this week by the Ways and Means Committee of the House of Representatives on Schedule B, which relates to carbon products. We strongly advocate that No. 95 be 50 or 55 per PARAGRAPHS 95-96-CARBON. cent instead of 30 per cent ad valorem on brushes, plates, disks, and electrodes 30 per cent instead of 20 per cent. No. 96 we feel that there should be 45 cents per 100 feet instead of 35 cents; for petroleum coke-lighting carbons, 75 cents instead of 65 cents per hundred feet, lighting carbons made chiefly of lampblack or retort coke. First, our reason for the above request is that material and fuel are very much higher. Second, that labor is a very great item of expense; much lack of appreciation by public on the labor cost of finishing carbon products; close limits on size requires high-class labor, which is very much higher than in Europe. Our books are open at all times for inspection. Very truly, yours, Hon. OSCAR W. UNDERWOOD, PURE CARBON Co., R. A. DEMPSEY, President. CLEVELAND, OHIO, January 6, 1913. Chairman Ways and Means Committee, Washington, D. C. DEAR SIR: It is our understanding that Schedule B of the present tariff bill comes up for consideration in the near future. We, as domestic manufacturers, are vitally interested in paragraph 95 and believe that any reduction in duty would be extremely detrimental to the domestic manufacturer and domestic labor employed in the carbon business. In our opinion the present duty should be increased to 40 or 45 per cent and in support of such statement submit the following reasons: First. It is a well-known fact in the carbon business that the sale of carbon specialties in this country of French, German, and English make, such as disks, brushes, etc., as covered by paragraph 95, have increased greatly during the past few years, in fact very much more rapidly than similar domestic items. It is therefore very evident that a reduction in the present duty would further handicap the domestic manufacturer. Second. Fifty per cent of the cost of manufacturing brushes, disks, etc., is a labor cost, a large percentage of which is of a very highly skilled nature. In the majority of cases the trade demands that this class of material be finished to from one to two thousandths of an inch, and, as you are doubtless aware, labor producing these results must naturally be experienced and demands very much higher compensation than the foreign equivalent. We are sending you under separate cover samples of brushes and disks, showing the high finish and exactness spoken of. Any reduction of duty on articles covered by paragraph 95 would, in our opinion, be dertimental to the best interests of American labor. In regard to paragraph 96, while the duty on this section, which includes electriclight carbons, gives more protection than that of products coming under paragraph 95, still, in our opinion, it is not sufficient to make up the difference between cost of production at home and abroad, and a slight increase in duty would be only fair to American producers. Therefore, as we view it, both from the standpoint of the domestic manufacturer and his employees, the present duties on paragraphs 95 and 96 of schedule B should be maintained, and if possible increased. We sincerely trust you will give the foregoing expression of our views favorable consideration. Very truly, yours, THE NUNGESSER CARBON & BATTERY CO., To the Hon. OSCAR W. UNderwood, CINCINNATI, U. S. A., February 12, 1912. Chairman Ways and Means Committee, House of Representatives, Washington, D. C. DEAR SIR: We are manufacturers of dry cell batteries and use carbon electrodes in large quantities. We understand that there is a bill introduced under paragraph 95 to place a duty of 20 per cent ad valorem on coal-gas retort carbon. This article is a by-product in the distillation of gas from coal. We are firmly under the impression that there is not over 15 to 20 per cent of retort carbon (used in making carbon electrodes and carbon brushes) manufactured in this country. The production as above stated of coal-gas retort carbon in this country is a very limited one. We are large users of coal-gas retort carbon, and a duty of 20 per cent would not protect home industry to any extent, but the duty would be an absolute hardship on us as well as other manufacturers of dry cell batteries, provided same was imposed. PARAGRAPHS 95-96-CARBON. We would respectfully and kindly ask of you to recommend to Congress that the crude retort carbon (ground or unground) be placed on the free list. We know full well that it is not the intention of Congress or the revenue department to impose a hardship on the American manufacturer of carbon electrodes, dry cell batteries, or carbon brushes. Thanking you in advance for any attention you may give this communication, we beg to remain, Very respectfully, yours, Hon. OSCAR W. UNDERWOOD, THE ROCK ISLAND BATTERY CO., Per M. S. ROSENTHAL, President. ST. LOUIS, January 4, 1913. Chairman Ways and Means Committee, Washington, D. C. DEAR SIR: We presume in the revision of the tariff that carbon products, covered by section B, which we manufacture, will be considered, and we trust you will pardon us for intruding on your valuable time in writing this letter. We kindly ask that the duty now covered by paragraph 95, on carbon brushes, electrodes, plates, and disks be fixed at 45 per cent ad valorem, and we also ask that the present duty covered by paragraph 96, on electric light carbons, be maintained. You understand that carbon products are principally manufactured by hand labor, and to illustrate this statement we are sending you under separate cover two brushes, which we trust will reach you in due time. Our worst competition now in the carbon business is from foreigners, and if the tariff is reduced the carbon industry in this country will be badly crippled. Carbon products are used almost exclusively by large corporations, and the price is not a matter of much concern to them, and we believe the Government would realize more revenue on a higher tariff on carbon products than on a lower one, as the percentage of carbon products now imported in this couutry is in excess to the quantity manufactured. We sincerely hope that you will give the carbon industry due consideration and will see that it is protected, as by so doing the cost of living will not be increased and you will protect an industry that needs protection in this country. Very truly, yours, AMERICAN CARBON & BATTERY CO., BRIEF SUBMITTED BY THE NATIONAL CARBON CO., CLEVE Hon. OSCAR W. UNDERWOOD, LAND, OHIO. NATIONAL CARBON CO., Cleveland, Ohio, January 6, 1913. Chairman Ways and Means Committee, House of Representatives, Washington, D. C. DEAR SIR: Since the present tariff law was enacted there have been some important developments in the electrical industry, among which is the advent of a long-burning flaming arc lamp, which can be used for either street or interior lighting. This lamp requires a carbon or electrode which is a combination of carbon and various chemicals, and on account of the radical change in the nature of same demands different treatment with regard to duty than grades which are enumerated in the present law. As near as we are able to estimate, the total annual consumption of high-grade carbons is 40,000,000 pieces, and we supply about one-half that number, the balance being imported from Germany and France. These carbons are composed chiefly of lampblack, and the present rate of duty as provided in paragraph 96 is 65 cents per hundred feet. We believe our facilities and experience enable us to produce highgrade carbons as cheaply as they can be manufactured in this country, but our operations have not been highly profitable, as is shown by the following table, which covers sales for the calendar years 1910, 1911, and 10 months of 1912: Net sales Jan. 1, 1910, to Oct. 31, 1912. Cost...... Profit. Per cent of profit on sales, 11. 34. Less annual depreciation charges, not included in cost of product...... Net profit....... Per cent of net profit, 5. 97. $1,551, 931. 55 1, 375, 878. 83 176, 052. 72 83, 414. 55 92,638. 17 PARAGRAPHS 95-96 CARBON. These figures are taken from the sworn statement of Mr. F. D. Lawrence, auditor and assistant treasurer of our company; the depreciation charges are 5 per cent on buildings and 10 per cent on machinery and tools. We think it will be conceded that this is hardly a fair manufacturing profit, especially in a business which must necessarily follow the various developments in the field of arc lighting, in consequence of which some of the machinery and equipment may at any time become obsolete. In 1909, prior to the adoption of the present tariff law, the average selling price of by 12 inch inclosed arc carbons, the size which constitutes over one-half of the total number used, was about $23 per thousand, and the average price to-day is about $18.25 per thousand. If it were not for economies we have been able to effect in the manufacturing processes this branch of our business would show a loss instead of a profit of 5.97 per cent. The increasing cost of labor and raw materials endangers even this small profit, and we hope the facts presented will convince your honorable committee that the present tariff of 65 cents per hundred feet should not be disturbed. Under this tariff, the cost to the consumer has decreased, the importation is larger, being at least 50 per cent of the total consumption of high-grade carbons, and the revenue to the Government has also increased. We have frankly stated the actual results from this branch of our business, but, if in the consideration of this subject, with this information before you, a reduction is decided upon, we trust it will not be more than 5 cents per 100 feet, making the duty on electric light carbons made entirely from lampblack or retort carbon 60 cents per 100 feet. The use of electric light carbons made entirely from petroleum coke is constantly decreasing, and importation has not been large, which is probably due to the smaller supply of petroleum coke abroad, and also to the fact that in Europe lampblack is not much more expensive than petroleum coke. In the event that your committee concludes to reduce the duty on lampblack carbons from 65 cents to 60 cents per 100 feet, a similar reduction of 5 cents per 100 feet would naturally follow on the petroleum coke carbons, but, as stated above, we sincerely hope the rate on either will not be changed. For many years the carbons used in arc lamps for street and commercial lighting were manufactured with the object of having them as pure as possible, and such carbons contain less than one-fourth of 1 per cent of ash; i. e., material other than carbon. The light from carbons of this description comes chiefly from the incandescent points, and not the arc itself. Within recent years the so-called flaming arc lamp appeared, and the carbons used in them contain chemicals either in the soft core in the center, in the shell, or on the outside of it. With such carbons the light comes chiefly from the arc, which is much longer than the arc produced by the other carbons, and is of a flaming nature, hence the name "flaming arc." This flaming arc, resulting from the chemicals used in the manufacture of the carbon. gives a light which has four or five times the candlepower of that produced by inclosed arc lamps using the pure carbons, previously described. Many inventors were attracted to this promising field with the result that numerous types of lamps are now on the market requiring different kinds and grades of carbon, some of them quite complicated in their nature, and all demanding a high grade of labor to produce, on account of the care necessary in the handling of the ingredients. The percentage of chemicals used varies from 5 to 50 per cent, and by placing the minimum at 5 per cent the character of the carbons can be definitely fixed to distinguish them from the ordinary grades, thereby eliminating all chance for error in classifying them for duty. We are firmly of the opinion that a specific duty on regular lampblack and petroleum coke carbons, with 100 feet as the unit, should be continued. They are packed in standard cases, usually containing 1,000 pieces each, and this basis provides for an easy and positive administration by the customs department. The prices of these carbons are confined to very narrow limits, the range being about $8.50 to $11.50 per 1,000 feet for petroleum coke carbons and $15 to $25 per 1,000 feet for ordinary lampblack carbons. We do not believe, however, that such a basis is equitable when applied to flaming carbons on account of the wide variation in shapes, sizes, weights, and grades, and because of the wide range of prices varying from $30 to $160 per 1,000 feet. While the possibilities of development are large, it being claimed by some that the flaming carbon will eventually supersede all other grades, it will undoubtedly be some time before they become standardized to the extent that other grades are at present. It would be difficult to provide specific rates which would properly meet these conditions, and it is, therefore, our recommendation that an ad valorem vasis be applied to all flaming carbons. Under the present law the duty on chemicals used in these flaming carbons is from 15 to 45 per cent, on lampblack 25 per cent, and on retort carbon 20 per cent. These |