SCHEDULE C-METALS AND MANUFACTURES OF.

IRON ORE.

[Paragraph 121.]

J. LEE SMITH & CO., NEW YORK CITY, SUGGEST A NEW CLASSIFICATION FOR ORES OF IRON.

Hon. SERENO E. PAYNE,

NEW YORK CITY, November 17, 1908.

Chairman Committee on Ways and Means,

Washington, D. C.

SIR: We beg to suggest to your honorable committee when considering Schedule C-metals, and manufacturers of—a change in paragraph 121, to read as follows:

Suggested paragraph 121.

"Iron ore, unwrought or unmanufactured, chiefly used for smelting, including manganiferous iron ore and the dross or residuum from burnt pyrites, and not otherwise specially provided for in this act, 40 cents per ton, provided that in levying and collecting duty on iron ore no deduction shall be made from the weight of the ore on account of moisture which may be chemically or physically combined therewith; basic slag, ground or unground, $1 per ton."

The reason for the desired change in paragraph 121 is that during the past six years many importations of high-grade and expensive hematites and iron ores, used exclusively for the manufacture of paint, have been entered at 40 cents per ton as iron ore. The Board of United States General Appraisers has uniformly classified such importations as crude colors or pigments, under paragraph 58. Under such decisions suits have been brought by the importers, claiming that as iron ore was specially mentioned, whereas iron paints were not specially mentioned, that the goods should pay duty at 40 cents per ton rather than 30 per cent ad valorem as an unenumerated paint, and the court held that such was the case. And Judge Townsend, in his opinion, filed November 10, 1902, in part said:

In its

"The merchandise is, in fact, crude hematite ore or iron ore. present state it can not be used as a pigment or color, and even if it be assumed that it is, in fact, a color or pigment, then it is a color, specially provided for as iron ore in paragraph 121. Congress having seen fit to levy a duty of 40 cents per ton on iron ore without classification as to its use, and without limitation, not specially provided for, such designation must stand."

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In accordance with the principles laid down in Judge Townsend's decision, we suggest changing the paragraph as above, so that iron ore and hematites of high grade, suitable and actually used entirely for paint, shall pay the duty provided for paint, and unless the ore imported is for use chiefly for smelting purposes it shall not be admitted at 40 cents per ton duty.

There has been no end of contention over this clause, and at the present time there are a great many appeals and protests from various ports of entry, claiming practically that all oxides of iron, whether natural or artificial, whether crude or powdered ready for use as paint, shall come in as iron ore at 40 cents per ton. We refer you to a few decisions upon this question, showing how it has been agitated since 1902: (T. D. 24189, G. A. 5267) January 26, 1903; (T. D. 24816) December 8, 1903; (T. D. 26248, G. A. 5695) March 30, 1905; (T. D. 26356, G. A. 6391) May 3, 1905; (T. D. 26806, G. A. 9048) November 16, 1905; (T. D. 26895) December 11, 1905; (T. D. 28856) February 14, 1908.

Congress undoubtedly intended to admit iron ore for smelting purposes at 40 cents per ton, many foreign ores being very suitable and beneficial for mixing with low-grade southern ores, and also, no doubt, intended that high-grade ores, used chiefly or entirely as crude paints, by simply grinding or pulverizing them, should pay the duty of 30 per cent ad valorem, as provided for in paragraph 58. In order to make the classification complete and to avoid confusion in the assessment of duties, we also suggest a change in paragraph 58, Schedule A, to read as follows:

Suggested paragraph 58.

All paints, colors, pigments, lakes, crayons, smalts and frostings, colcothar, and Venetian red, including oxide of iron, hematites, and iron ore, used as paint or polishing powder, whether crude or dry or mixed or ground with water or oil or with solutions other than oil, not otherwise specially provided for in this act, thirty per centum ad valorem; all paints, colors, and pigments, commonly known as artists' paints or colors, whether in tubes, pans, cakes, or other forms, thirty per centum ad valorem.

As manufacturers and importers of dry paints and pigments, we suggest the above changes in paragraphs 121 and 58, and are confident that such change will have the indorsement of

First. The customs division of the United States Treasury Department, by avoiding much contention and loss of revenue.

Second. The mine owners of the United States, many of whose ores are suitable for and used as paints, and come into competition with the foreign iron ore that is also used entirely or chiefly as paint.

Third. The manufacturers (with possibly one exception) of metallic paint, oxides of iron, Venetian red, etc., used for the same purposes as the ground foreign iron ore.

In conclusion, we may say that the alterations, if made in the above. paragraphs, will correct the injustice to the class of paints made from burnt copperas, waste iron liquors, and domestic hematites, of having similar goods used for identically the same purposes admitted in competition at 40 cents per ton (par. 121) instead of 30 per cent ad valorem, as in paragraph 58.

As to rate of duty in paragraph 58, we are satisfied to have it remain at 30 per cent, or to have it reduced to 25 per cent, as may be for the best interests of all concerned.

We remain,

Very respectfully, yours,

J. LEE SMITH & Co.

HON. JAS. S. SHERMAN, M. C., SUBMITS LETTER OF D. DE W. SMITH, UTICA, N. Y., RELATIVE TO IRON ORE.

Hon. JAS. S. SHERMAN, M. C.,

UTICA, N. Y., November 20, 1908.

Utica, N. Y.

DEAR SIR: Referring again to the matter of tariff, concerning which I wrote you some days since, I beg to say that I now learn that the matter of iron-ore schedule is to be considered November 25, under the general subject of metals and manufactures thereof. Here, as I understand it, under schedule 121 the question of iron ores will be treated.

The Clinton Metallic Paint Company is probably as much interested in this particular schedule as it is in any of the schedules under the paint line. At present writing, we enjoy a duty of 40 cents a ton on iron ores, which would certainly seem relatively moderate, the element of wages being considered.

Thanking you in advance for your courtesy, I am,
Very truly, yours,

D. DE W. SMITH.

STATEMENT OF FRANK S. WITHERBEE, OF PORT HENRY, N. Y., REPRESENTING IRON-ORE PRODUCERS OF THE EAST.

WEDNESDAY, November 25, 1908.

Mr. WITHERBEE. I am here to represent the iron-ore producers of the East. It is fair for me to say to you that I have only returned from Europe on Saturday, and I have had no opportunity of talking this matter over with my associates in business, nor have I had any time to group together some facts and figures which may be of interest to you all; but if it meets with your wishes, I will be very glad to give you some figures, showing the cost data of ore produced in the eastern part of this country, and, so far as it lies in my power, to give you the corresponding cost in Europe. I visited a great many of the iron-ore centers of Europe and became acquainted with the cost of their labor, and so forth, and anything I have in my knowledge you are quite welcome to. I feel certain that there is a widespread demand for tariff revision, and there is reason for it. Undoubtedly there are a great many articles which can properly be reduced, there are other articles that can not be reduced, and I think there are a few articles that perhaps ought to be increased.

But confining myself more to the iron-ore industry, with which I am more familiar, I would say that in any revision you might make

of the present schedule I think due consideration should be given to these facts: In the first place, the labor that the iron-ore manufacturer has to compete with is almost the cheapest in the world—that of Spain and Lapland and Cuba-whereas the ordinary manufacturer of iron and steel has to compete with the labor of France and Germany and Great Britain, which is much better paid. There is also another fact, that while a great many branches of the iron trade have but little competition in the way of imports, iron ore has always had a very great competition. There have at all times been large amounts of iron ore brought into this country from Europe, and I think that should be given some consideration also. At times it does not affect the domestic iron-ore producers as much as it has; for instance, during this past season, when for a period of quite a number of months, so far as my own company goes, we simply were not able to make any sales whatever of certain grades of ore as against foreign ores that were being landed in this country.

Another thing is, you should lend encouragement to the mines in the eastern part of our country. There are several large mining districts that are about to be developed, and to develop an iron mine of any size costs from $500,000 to two or three million dollars. The investment at best is an uncertain one. One may open up on a vein that seems large in a year or two years, but the quality is likely to vary, and the amount one has before one is always uncertain, and therefore you can not, as you would in the investment in an ordinary business, look upon a small return in interest as fair. You have got to have a return on your capital which will correspond to the amount of your principal that you are absorbing and disposing of from time to time, and also to give due regard to the uncertainties of the trade. I do not know that there is anything else that I am prepared to say to you to-day. I am sorry that I have not had more time to study this matter, but if hereafter there is anything else I can give you in the way of information I will be glad to do it. Or if to-day there are any questions you wish to ask me I will do my best to answer them. I am afraid it must be in a very general way, however. I could not carry in my mind all the details of the cost.

Mr. CLARK. What is it you suggest?

Mr. WITHERBEE. In what way?

Mr. CLARK. As to the tariff. That is the subject under discussion here.

Mr. WITHERBEE. In general, or as to the proposition I am speaking of?

Mr. CLARK. Do you want it increased, or held as it is, or cut down? Mr. WITHERBEE. I think if there is going to be a general revision of the tariff, iron ore should stand its share.

Mr. COCKRAN. Should stand its share of reduction?

Mr. WITHERBEE. Should stand its share of reduction. There are times like this summer when the competition would probably stop the production of many grades of domestic ore. In other years they could stand competition.

Mr. CLARK. This year is not a fair illustration?

Mr. WITHERBEE. No; but I think probably three years out of ten would be as bad for the domestic ore producers as this year.