PARAGRAPH 412-DECALCOMANIAS.

petitive conditions at that time, and the entire absence of all reason to increase the duty on the plea of needed protection to the American industry. During the lifetime of the Dingley law the lithographic rate imposed upon our goods was 20 cents per pound, the rate provided under paragraph 400 of the act of 1897 for lithographic prints not exceeding eight-one-thousandths of one inch in thickness, and this was the classification upheld by the Federal courts. With this rate of duty-20 cents per pound-American manufacturers had every incentive to build factories, and they found no difficulty whatever in appropriating even then the lion's share of the cold decalcomania trade. They underbid the importers at all times, and the limited sale of the imported goods was based chiefly on superior quality and design. In a word, American manufacturers gave every evidence of prosperity. It should be said that the bulk of this domestic trade is in large lots, and in this respect American manufacturers have had an advantage which amounts to monopoly. The trade in the imported decalcomanias, especially under present conditions, is chiefly limited to orders for small lots.

Official statistics showing the volume of importation of cold decalcomanias under the Dingley law are not available, because such goods were classified under the head of lithographic prints generally. In statements by manufacturers of this line, made to the Committee on Ways and Means in 1908, it was shown that the annual consumption of decalcomanias in this country was then about $800,000 in value, and that the annual importation amounted to approximately $300,000. Official statistics do show, however, that since August 5, 1909, under the existing law, the importation of cold decalcomanias has scarcely averaged in value $62,000 per year for the past three years. In other words, under the prevailing high and almost prohibitive rate, importations have so dwindled as to be relatively petty and insignificant. It is obvious then that only by materially reducing the present rate can competition in this line be restored and the American consumer exercise his choice of purchase upon a scale of prices based upon live competitive conditions. Briefly stated, we ask this honorable committee at least not to impose rates in excess of the Dingley law rate, under which our domestic competitors were not injured as the factories erected and maintained under that law conclusively show. There is every probability that a return to this rate would, moreover, produce additional revenue to the Government by reason of the increased volume of importations. The distinction existing in the present law between decalcomanias with metal leaf backing and those without should be eliminated. It is, of course, apparent that the metal leaf backing substantially increases the weight, thereby enhancing considerably the amount of duty.

By way of summary, then, in view of the fact that importations have dwindled, as shown above; that the American manufacturers did thrive under the old rate; that a greater revenue must result from a return to that rate; and finally that the consumer in the end will be the beneficiary, we feel that we have made out a case which amply justifies us in requesting your committee to wipe out the present decalcomania duty, which is almost prohibitive, and to restore the 20 cents per pound rate with no discrimination as to metal backing. Finally, we wish to emphasize that we are not asking to have the duty removed. We are quite content to contribute to the revenue of the Government. We are asking, however, for what we have not had under the present law a fair chance to exist under normal competitive conditions.

[Extract from decision in case of United States v. Borgfeldt.]

Decided in October, 1911, by the United States Court of Customs Appeals (2 Ct. Customs Appeals, 197).

If we had any doubt as to whether the decalcomanias under discussion are properly dutiable as lithographic prints, that doubt would be dispelled by what seems to have been a very long-continued departmental practice. The tariff provision for litho graphic prints appeared for the first time in the tariff act of 1890. From the date of the passage of that act until the year 1907, a period of 17 years, decalcomanias were assessed for duty as lithographic prints. Their classification as such prints seems to have been

PARAGRAPH 412-DECALCOMANIAS.

questioned for the first time about the year 1903 by the firm of Wakem & McLaughlin, of Chicago. This firm, representing Meyercord & Co., imported certain decalcomanias, which were classified by the collector as lithographic prints and accordingly assessed for duty of 20 cents per pound under paragraph 400 of the tariff act of 1897. The importers, frankly admitting that they represented domestic manufacturers of decalcomanias and desired a higher rate of duty, protested that the goods were labels printed in whole or in part of metal leaf and therefore dutiable at 50 cents a pound. The Board of General Appraisers overruled the protest, but its decision was subsequently reversed by the Circuit Court for the Northern District of Illinois, Kohlsaat, judge, no opposition being presented by the Government. The decision of the circuit court, however, was not followed by the Treasury Department, which, after taking the opinion of the Attorney General, announced that it was not incumbent upon the department to accept the ruling of the court and instructed customs officers to continue to impose the rate of 20 cents per pound on such merchandise as lithographic prints. (T. D. 25848.) The practice of classifying decalcomanias as lithographic prints was not again disputed until the year 1907. In that year Hempstead & Sons, representing, it seems, the same Meyercord Co., imported decalcomanias at Philadelphia, which were returned by the local appraiser as "surface-coated paper, printed," and assessed for duty at the rate of 3 cents per pound and 20 per cent ad valorem under the provisions of paragraph 398. The importers claimed that the merchandise was properly dutiable at 20 cents per pound as lithographic prints under the provisions of paragraph 400. On the hearing before the board the importers offered no evidence or testimony to sustain their contention or to support their protest. Special counsel, representing the Meyercord Co., appeared, however, at the hearing and contended that neither the rate of duty assessed by the collector nor the rate claimed by the importers was correct. It was argued that mineral colors were used in printing the articles and that they should be assessed at the rate of 45 per cent ad valorem as articles in chief value of metal under the provisions of paragraph 193. The board declared the claim of special counsel to be without merit, and deciding that the decalcomanias were lithographic prints, sustained the protest. From this decision an appeal was taken to the United States Circuit Court, Eastern District of Pennsylvania, and in February, 1908, the court, after taking evidence in what was really an ex parte proceeding, found that the decalcomanias were surface-coated paper wholly or partly covered with metal, dutiable under paragraph 398, and a distinct article of commerce different for lithographic prints and printed matter both in manufacture and use.

A reading of the decision in that case in the light of the very complete record in this case leads us to the conclusion that the learned district judge was deprived of the advantage of a bona fide contest and that his findings of fact were based on a one-sided presentation of issues involved. We can not, therefore, give to his decision the weight which it certainly would have been entitled to receive had there been a genuine litigation of the matter. For the same reason that decision can not be considered as neutralizing the legal effect of the long-continued, uninterrupted, and well-established departmental practice which had theretofore existed.

BRIEF OF NEUMANN & HADLEY, NEW YORK, N. Y.

The COMMITTEE ON WAYS AND MEANS,

Washington, D. C.

NEW YORK, January 30, 1913.

GENTLEMEN: As dealers in surface-coated paper and making a specialty of decalcomania paper, we desire to confirm that the statements made by Mr. George Meyercord, on behalf of the National Association of Employing Lithographers, are absolutely correct. On pages 2222 and 2223 Mr. Meyercord presents the situation as it exists with regard to decalcomania paper. The decalcomania paper-for ceramic printing is a patented article abroad, and we know for a fact that the foreign makers would not consider for a moment the establishment of a plant in America for the manufacture of this paper. We endeavored to induce the manufacturers (whom we now represent) to make this paper in America, but they refused to consider the establishment of a plant in America for the manufacture of this paper, and as the duty on the size sheets the American manufacturer use is equivalent to almost a cent a sheet, and as this is a direct charge to the American decalcomania manufacturers to such an extent that it wipes out one-third of the protection they enjoy, and as the duties on color, which is a large item in their manufacture, is one that practically wipes out the rest of the protection, it practically, to our certain knowledge, puts this labor almost on the free list.

PARAGRAPH 412-DECALCOMANIAS.

We believe that the Government would get a great deal more revenue by permitting the decalcomania paper to go on the free list, thus enabling the American manufacturer to get a little protection for his labor, and that the duty collected on the added volume of colors used would more than compensate for the revenue lost on the paper. To our certain knowledge we know that the various ceramic decalcamania printed in America have practically discontinued printing, with the exception of one important concern in Chicago, who, we understand, lost money under this present tariff attempting to compete with the foreign maker, and if this establishment does not continue the American potters will be at the mercy of the foreign makers of decalcomania, and we therefore recommend that decalcomania transfers be placed on the free list, as we surely believe that the saving to the American maker would, in other imports that they use, more than compensate the Government several times over for the little loss of revenue sustained by placing this particular paper on the free list, and as decalcomania transfers are a necessity, and this would enable the American manufacturer to secure his raw material cheaper, it would have a benefit to the users of decalcomania transfers.

Yours, very truly,

NEUMANN & HADLEY.

BRIEF OF THE CROXALL CHEMICAL & SUPPLY CO., ON DECALCOMANIAS.

To the WAYS AND MEANS COMMITTEE,

EAST LIVERPOOL, OHIO, December 27, 1912.

Washington, D. C.

GENTLEMEN: We beg to call your attention to the oppressive and prevailing duty levied on these goods under the tariff act of 1909.

These transfers are used exclusively for the decoration of earthenware and china, and fully 80 per cent of the decorated ware sold in this country are decorated with these transfers and are, therefore, in every sense of the term, raw material to the American potter, who, in competition with the imported finished earthenware and china, must have the very best raw material he can procure, without being hampered or penalized, to enable him to compete in his own market with European goods.

There is positively no large class benefited by the high duty that is now imposed. On the other hand, the American potter is very seriously handicapped. There is but a very small quantity manufactured in this country, and these are but very cheap imitations and copies of the original product, and if all sheets that are required by the American potter were manufactured on this side, it is doubtful if more than 100 people would be employed, while over 20,000 American workmen are now directly affected by this high duty.

In Europe the manufacture of these transfers has been carried on for years. Skilled artists and operators have grown up with the business, insuring the study production of this high grade of original patterns, and they are also favored by the climatic conditions which are very essential in the manufacture of these goods.

These decalcomania transfers were formerly specified under paragraph No. 400 in the tariff of 1897, at a flat rate of duty of 20 cents per pound. Under the act of 1909, without any apparent cause or justification whatever, a special clause was inserted in paragraph No. 412 levingy a duty of 70 cents per pound weight plus 15 per cent ad valorem, thus considerably more than doubling the duty and opening the way to all kinds of uncertainties in the business.

To convey to you an idea of the vast importance of this matter, we can truthfully state that fully 90 per cent of the decorations which will be sent out on the 1st of January to the trade by the American potters are decorated with this imported decalcomania, and in case that these should be withdrawn from the market entirely, it would be one of the most disastrous blows that could be given this industry, as it would simply close up their factories for the time being for want of this raw material, which they necessarily must have to market their wares.

In view of all these facts, we beg to submit to your honorable body that, in the best interests of the largest number, that these goods be placed upon the free list, which, we assure you, will prove of the greatest possible benefit to the American potter, who must not only be protected on his finished goods in the way of duty, but also must have access to the foreign market for his raw material to enable him to finish his ware in such manner that he can dispose of it in his own market.

Respectfully submitted.

THE CROXALL CHEMICAL & SUPPLY Co.

PARAGRAPH 413.

PARAGRAPH 413-WRITING PAPER.

Writing, letter, note, handmade paper and paper commercially known as handmade paper and machine handmade paper, japan paper and imitation japan paper by whatever name known, and ledger, bond, record, tablet, typewriter, manifold, and onionskin and imitation onionskin papers calendered or uncalendered, weighing six and one-fourth pounds or over per ream, three cents per pound and fifteen per centum ad valorem; but if any such paper is ruled, bordered, embossed, printed, lined, or decorated in any manner, other than by lithographic process, it shall pay ten per centum ad valorem in addition to the foregoing rates: Provided, That in computing the duty on such paper every one hundred and eighty thousand square inches shall be taken to be a ream.

WRITING PAPER.

BRIEF OF SUNDRY PAPER MANUFACTURERS.

BRIEF.-IN THE MATTER OF TARIFF ON PAPER, MORE PARTICULARLY ON GRADES KNOWN AS WRITING AND COVER PAPER, REFERBED TO PRINCIPALLY IN SCHEDULE M, SECTION 413, AND ADDITIONALLY IN SECTIONS 411, 414, 415, IN THE TARIFF ACT OF AUGUST 5, 1909.

Hon. OSCAR W. UNDERWOOD,

Chairman Committee on Ways and Means,

House of Representatives, Washington, D. C.:

This brief represents the views of the following companies making these grades of papers: American Writing Paper Co., Holyoke, Mass.; Aetna Paper Co., Dayton, Ohio; Beckett Paper Co., Hamilton, Ohio; Berkshire Hills Paper Co., Adams, Mass.; L. L. Brown Paper Co., Adams, Mass.; Byron Weston Co., Dalton, Mass.; Carew Mfg. Co., South Hadley Falls, Mass.; Chapin & Gould Paper Co., Springfield, Mass.; Chemical Paper Co., Holyoke, Mass.; Crane Bros., Westfield, Mass.; Z. & W. M. Crane, Dalton, Mass.; Crane & Co., Dalton, Mass.; Crocker-McElwain Co., Holyoke, Mass.; C. H. Dexter & Sons, Windsor Locks, Conn.; Eastern Mfg. Co., Bangor, Me.; Esleeck Mfg. Co., Turners Falls, Mass.; Fox River Paper Co., Appleton, Wis.; Gilbert Paper Co., Menasha, Wis.; Hammermill Paper Co., Erie, Pa.; Hampshire Paper Co., South Hadley Falls, Mass.; Hawthorne Paper Co., Kalamazoo, Mich.; Kalamazoo Paper Co., Kalamazoo, Mich.; Keith Paper Co., Turners Falls, Mass.; Lee Paper Co., Vicksburg, Mich.; Millers Falls Paper Co., Millers Falls, Mass.; Mountain Mill Paper Co., Lee, Mass.; Mount Holly Paper Co., Mount Holly Springs, Pa.; Neenah Paper Co., Neenah, Wis.; W. B. Oglesby Paper Co., Middletown, Ohio; Old_Berkshire Mills Co., Dalton, Mass.; Parsons Paper Co., Holyoke, Mass.; Plover Paper Co., Menasha, Wis.; Poland Paper Co., Mechanic Falls, Me.; B. D. Rising Paper Co., Housatonic, Mass.; Riverside Fibre & Paper Co., Appleton, Wis.; Southworth Paper Co., Mittineague, Mass.; Strathmore Paper Co., Mittineague, Mass.; Taylor-Burt Co., Holyoke, Mass.; Valley Paper Co., Holyoke, Mass.; Worthy Paper Co., Mittineague, Mass.; Howard Paper Co., Urbana, Ohio; Russell Falls Paper Co., Russell, Mass.; Knowlton Bros., Watertown, N. Y.; Niagara Paper Mills, Lockport, N. Y.; Peninsula Paper Co., Ypsilanti, Mich.; District of Columbia Paper Co., Washington, D. C.; Advertisers Paper Mills, Holyoke, Mass.; Bardeen Paper Co., Ostego, Mich.; A. H. Hubbard Co., Norwich, Conn.; Chas. S. Boyd Paper Co., Appleton, Wis.

These 50 companies represent some 88 mills, employing about 16,000 operatives; wages paid per year, about $10,000,000; capital invested, about $54,000,000. I. Classification.-We beg to call your attention to our request that the present classification of papers as laid down in the tariff act of August 5, 1909, be adopted as the basis of any new act. This classification was arrived at after much study, argument, and arrangement, and has been in force for such a period of time as to not only permit all interested to become familiar with it and adJust themselves to it, but more particularly to permit the Government experts and officials to get foreign papers of entry properly classified under it, which involved long hearings before referees, taking much time and attention of the manufacturers and importers. We therefore submit that nothing is to be gained by a reclassification, but much difficulty, argument, and valuable time is to be saved by keeping the present classification.

PARAGRAPH 413-WRITING PAPER.

II. We beg further to direct your attention to the methods of assessing tariff, viz, specific and ad valorem. In our judgment the more important tariff for our grades of paper is the specific assessment, since such a method obviates the dangers of undervaluation (which the ad valorem, if assessed alone, fosters) and gives the American manufacturer some definite idea of the conditions he has to meet in his competition without regard to constantly changing invoice charges and valuations. The ad valorem assessment has its definite value in changing grades of the same qualities of paper, but can never meet the situation as well as the specific either from the revenue or protective point of view. But practice has established the value of both methods, and, while strongly advocating the higher values of the specific, we respectfully suggest that the established practice on these grades of paper be maintained.

III. Labor conditions.-The conditions under which labor is performed should have weight when the matter of tariff on writing paper is under consideration. These conditions are better than those in almost any other industry. The departments in our mills which work 24 hours per day are run on three shifts of 8 hours each, and in those departments which work only days the 9-hour day prevails. No children are employed, and women work 50 to 54 hours per week. No women or minors are employed at night. The work done by women is light and not injurious to health. The mills are well lighted and ventilated and no injurious fumes or gases are employed in the process.

The following comparisons indicate the conditions in America as contrasted with those in Germany, which country will be the chief gainer by lowering the tariff on these grades of paper. The statistics as to German wages are obtained from a report of the German Imperial Government supplying labor item of German mills for the year 1910, and as incorporated in a report by the United States consul general, Robert P. Skinner.

In addition to which skilled and unskilled labor in America works shorter hours than similar labor in Germany. This is a very strong proof that labor has obtained a large share of any benefit from the tariff act, and if the tariff is reduced on these papers, labor must eventually give up a portion of its gain. Any substantial reduction in the duties on writing paper, allowing the importation of foreign-made paper will work a very serious hardship to both the owners and the employees of the writing-paper mills, the more so as these people are not the floating population that can readily go into other industries or return to Europe. They are American-born people living in their own homes and absolutely dependent on the mills for the comfortable conditions they now enjoy.

IV. Raw materials.-We beg further to call your attention to the fact that the raw material from which these papers are made, viz, rags and sulphite pulp, must be imported in a very large per cent from the foreign countries which are our largest competitors on these grades of papers. On these importations, amounting in 1912 to over 100,000 tons of rags alone, must be paid at least one profit to the importer that the foreigner does not pay, as well as freight to this market. It is an obvious fact, therefore, that in importing these raw materials and paying much higher wages in the manufacture from them of these grades of paper the American manufacturer is at a decided disadvantage.

V. Present competition.-Under the present tariff act of August 5, 1909, the competition from foreign countries on these grades of paper is already severe; and with the necessity now existing and which will continue to exist of large importations of raw materials, and with the present rate of wages and hours, now very materially better in America in our paper mills than in those of our foreign competitors, it is very plain that with any reduction in the tariff on these grades of papers there can be but three conclusions: First, the production of these grades of papers must decrease, thus throwing a certain amount of American labor out of work; secondly, the per cent of profit to capital invested,