PARAGRAPH 3-OILS. framers of the new bill had in mind when the duties were proposed for spices that these articles are used solely as spices and condiments and may therefore be considered possibly as a luxury, but they evidently did not, at the same time, consider the fact that spices also form the basis of two important chemical industries. We respectfully request and urge that this feature of the matter is carefully considered and if the various duties proposed must remain on the spices used by the food and spice trade, then some means and method be introduced and decided upon, whereby spices, etc., imported and used for distilling and manufacturing purposes can come in free of duty. BRIEF OF THE COLUMBIA WESTERN MILLS IN RE OILS. WEST PULLMAN, CHICAGO, ILL., January 3, 1913. Mr. JAMES R. MANN, Washington, D. C. DEAR SIR: As you are probably aware a hearing is going to be given on January 6 at Washington, D. C., Ways and Means Committee presiding, on the Underwood Bill, on which there is a proposed duty of one-fourth cent per pound on soya bean oil and 5 cents per gallon on China wood oil. As you will probably remember, this matter was discussed during March, April, 1912, when the above bill passed the House of Representatives. We can not see any reason why any amount of duty should be assessed on these oils, because the same are raw materials for paint and varnish industry of this country and both these oils are not crushed here. The assessment of any amount of duty on such raw materials will place the consumers in a very disadvantageous position in buying these materials in the future. Our object in writing you is to protest against such assessment of duty on these items, leaving them free as they now are. Attached we give you some information covering these two oils which is self-explanatory, and anything you can do to leave their entry free into this country without duty will be appreciated by us. Yours, very truly, COLUMBIA WESTERN MILLS, [Inclosure.] CHINA NUT OIL (CHINA WOOD oil). China wood oil is crushed from nut, which is a production of southern China, Hankow district being the center. This nut tree is only grown in southern China and not in any other place in the world. We heard that experimental plantation of this nut tree was made in this country, but such experiment was a total failure. We tried to import the nut instead of the oil, to be crushed in this country, but we were not successful. Every year, about the beginning of October, the nut is picked from the tree by natives in southern China and crushed to obtain the oil. Then it is sold to refineries around Hankow, by whom the oil is refined, and shipped to this country. Usually the new crop oil is shipped from China by the end of October or early November. It generally takes 90 days before the oil arrives in this country from China. PARAGRAPH 3-OILS. As long as the nut tree can not be raised in this country, we do not think that any industry for crushing of this nut can be established, especially if you take into consideration the fact that we were not successful even to import the nut for crushing purpose here. We are unable to obtain statistics for the production of nut in China, because there is no way of obtaining any figure, but we state below the quantity and value of importation of this oil into this country for the past few years: Soya bean oil is crushed from soya bean, which is a product of North Manchuria, China. This oil has been used by soap manufacturers in extensive quantities about three years ago, when cotton-seed oil, tallow, grease, and other soap materials were very high. We heard that experimental plantations were made in this country with soya bean in the past, but the result was not successful. There even might be a small quantity of soya bean raised in this country, but such quantity is used for cattle feeding, fertilizer, etc., and is not enough for crushing use to obtain oil. Therefore the only way to obtain soya bean oil is to import from foreign countries. The production of soya bean in North Manchuria averages around 1,000,000 tons of 2,240 pounds per year. About 40 per cent of this quantity is now exported to Japan, where it is used for aoy making, or feeding purpose, as well as for crushing use to make soya bean oil. About 20 per cent is consumed by China itself; about another 20 per cent is crushed in northern China, thereby obtaining oil and cake; about 5 per cent will be kept by farmers for sowing use for next season. The balance of about 15 per cent is for export to European crushers. In Europe soya bean is used for crusher purpose to obtain soya bean oil and soya oil cake. Soya bean has only been introduced to European crushers since 1909. Therefore it is still quite a new product to them. There is no industry in this country for crushing soya bean. Therefore the soya bean oil used by soap manufacturers has to be imported as above stated from foreign countries. Below are the statistics of import into this country. P. S. Under present tariff there is a duty of 45 cents per bushel on soya bean which is a prohibitive rate. If there is a small number of farmers who are raising soya beans in this country they are well protected under the above prohibitive duty on soya beans. PARAGRAPH 3-OILS. STATEMENT OF M. B. SNEVILY, OF NEW YORK CITY. Mr. SNEVILY. If the committee please, a provision should be made in your tariff to cover vegetable oils and seeds met with elsewhere and which are now named under either the similitude clause or under the paragraph "Not otherwise specified," the result of which is that an inferior oil or a seed which we use to produce an oil to be used as a substitute for a staple, will pay in some cases the same duty and in other cases more duty than the staple itself. This fact prevents the use of substitutes, because it is well recognized in the trade that a buyer will never pay for a substitute the same price for which he can obtain a staple. The duties on vegetable oils and seeds, in my opinion, should be specific and not ad valorem for several reasons. One reason is that a specific duty will do away entirely with undervaluation. It will also absorb any difference in market values of the different markets of the world. Furthermore, in this country, where we import a seed we import it to obtain the oil. The value of that seed depends upon the percentage of oil which it contains and the quality of the oil that we can secure. Ad valorem duties increase the assessment on the consumer when the market advances. For example, take table olive oil, a fair quality of which was obtainable a year ago at 80 cents a gallon. I am not alluding to the class of oil that you would use yourself on your own table, but to a fair grade of wholesome oil. The duty on that oil in barrels is 40 cents a gallon, equivalent to 50 per cent, of course. To-day that same grade of oil will cost $1.20 a gallon. An equivalent of 50 per cent would make the duty 60 cents instead of 40 cents, and that 20 cents a gallon increase is paid by the consumer, not to the producer but to the Government. Mr. HARRISON. In that respect you are satisfied with our bill, because in all our seed laws the duties provided are specific. Mr. SNEVILY. If my recollections are correct, you provide in some places an ad valorem duty, not on olive oil, but on some of the seeds covered in the schedule. Mr. HARRISON. The seeds themselves or the oil? Mr. SNEVILY. The seeds and oils. Mr. HARRISON. They are in the agricultural schedule? Mr. SNEVILY. The seeds are in the agricultural schedule; yes, sir. Mr. HARRISON. We have not reached that yet. Mr. LONGWORTH. To what paragraph are you particularly referring? Mr. SNEVILY. I am not referring to any particular paragraph, but am on the general subject of vegetable oils and seeds." Fluctuations in these commodities are sometimes very violent. Prices have been steadily advancing for several years-in fact, are continuing to advance. As an illustration of what we have in the way of fluctuations, linseed oil sold a short time ago for 95 cents and is now being sold for 40 cents a gallon. Coconut oil, of which we have sold hundreds of tons at 4 cents a pound-and which I considered extremely high at 6 cents a pound-has sold during the past PARAGRAPHS 3-OILS. three years for 10 cents a pound, and 74 cents a pound has been considered a low price. Mr. LONGWORTH. Are you in favor of a duty on coconut oil? Mr. SNEVILY. Not unless that duty can be sufficient to overcome the difference in cost of transportation and manufacture in this country. There is a certain amount of coconut oil made in the United States, but that is made for a particular purpose. It is not the oil which is sold to the soap makers. The by-product of that oil is what is sold to the soap makers. Commercial olive oil is used in the industries, tanning of leather, dressing of worsteds and woolens. When we paid a duty of 25 per cent, we considered the oil high at 65 cents a gallon, including that 25 per cent duty. To-day we consider olive oil at 65 cents a gallon, without any duty, as a safe investment. A low price or an average price is 80 cents, and a high price is 90 to 95 cents. Coconut oil at present pays no duty at all, and neither does commercial olive oil. As illustrating the advance which has taken place in these oils, prior to the enactment of the Payne-Aldrich bill olive oil could not be imported into the United States except upon payment of 40 cents a gallon duty, if the cost at port or the place of origin exceeded 60 cents per gallon, and now it is seldom if ever that we can get olive oil at 60 cents a gallon. That simply illustrates the advance in values. I will hardly take the liberty to suggest to your honorable committee the rates of duty that should be assessed on these various oils and seeds, but I would like to call a few facts to your attention. The imports of vegetable oils and seeds, dutiable and free, in the year 1910 aggregated about $25,000,000 to $27,000,000; in the year 1911 practically $65,000,000. Ocean freights are an item that has to be considered on this proposition, particularly of recent years when the rates have advanced to the extent that they have. A ton of seed occupies 55 cubic feet. We have just paid $6.10 per ton on an import, which figures out 11 cents per cubic foot. The product of that ton of seed in oil, on an average, would run from eighty to a hundred gallons. Allow that it is a hundred gallons or two barrels; the cubic space occupied by that two barrels would be 20 feet, which at 11 cents per foot is $2.20. You will therefore perceive that as freight room on steamship is sold by the cubic space occupied by cargo that a domestic manufacturer would be obliged to pay $2.90 more for the product of 1 ton than the foreign manufacturer. We consider the outlay on a ton of seed as practically $10. That is, from the time a ton of seed is landed on the dock until we finish its manufacture into oil, meal, or cake the cost of it is approximately $10. In some cases it is less; in others more. That represents the amount which we spend on every ton of seed which we import. An importer will bring to this market the oil content of that ton of seed, and it will cost him not over 50 cents expenses here. It may cost him nothing. If he has a free lighterage clause, the oil may be discharged from the steamer, and the railroad company absorbs the charge. He may have weighing and sampling, but it will not cost him over 50 cents. In other words, the man who imports oil will spend 50 cents on what he gets out of a ton, while a domestic manufacturer will spend $10. If he brings the cake or meal here, which seldom PARAGRAPH 3-FORMALDEHYDE. if ever is done, he may make an outlay possibly of another dollar. Increased consumption has steadily advanced prices. It is a problem for all manufacturers who are consumers of oils and fats, making it very difficult for them to compute costs or establish any standard of values. It seems to me that relief must necessarily come by substituting for these staple articles some of the oils that are used elsewhere in the world. This, to my mind, can be best accomplished by offering to those who are willing to promote the use of these oils an opportunity to do so at a fair margin of profit. Scarcity-crop failures invariably result in higher prices. The consumer, if he is entering goods on an ad valorem rate, has a further hardship beside that of increased values through scarcities. By-products of these seeds are seldom, if ever, brought to the United States. In fact, in most places where produced they are of more value than they are here. That is all I have to say. The CHAIRMAN. Any questions? No response. The CHAIRMAN. Thank you, sir. Mr. HILL. Is cottonseed oil and olive oil oftentimes used interchangeably for the same purposes? Mr. SNEVILY. Not if the Department of Agriculture can locate it, unless so branded. Mr. HILL. I know, but Mr. SNEVILY (interposing). There are mixtures that are branded. as a mixture of olive oil and cotton oil. Mr. HILL. Is it not prepared so that the ordinary person who is not an expert could not tell the difference? Mr. SNEVILY. Personally, I had rather have a high grade of cotton oil than a low grade of olive. Mr. HILL. For food purposes? Mr. SNEVILY. Yes, sir. Mr. HILL. One is free and the other pays duty? Mr. SNEVILY. Yes, sir. FORMALDEHYDE. STATEMENT SUBMITTED BY PERTH AMBOY CHEMICAL WORKS, NEW YORK CITY. PERTH AMBOY CHEMICAL WORKS, Hon. OSCAR W. UNDERWOOD, New York, January 4, 1913. Committee on Ways and Means, House of Representatives, SIR: We respectfully petition that formaldehyde, 40 per cent solution, also commercially called formalin, be dutiable at 14 cents per pound specific; paraformaldehyde, solid, 95 per cent pure, be dutiable at 7 cents per pound specific. Formaldehyde, containing 40 per cent formaldehyde, is an aqueous solution, and paraformaldehyde is a polymerized formaldehyde, formed by evaporation of the aqueous solution of formaldehyde, an amorphous solid product 95 per cent pure. |