PARAGRAPH 437-AMMUNITION. In 1909 we asked for forty-five (45) per cent duty, or $1 per thousand feet on safety fuse of all kinds, and the results of the last three years have shown that the rate asked for was not any too high to protect our industry and enable us to produce goods of the necessary quality. Respectfully submitted. COAST MANUFACTURING & SUPPLY COMPANY, BRIEF SUBMITTED BY THE ENSIGN-BICKFORD CO., SIMSBURY, CONN. SAFETY FUSE. Mining, blasting, or safety fuses of all kinds not composed in chief value of cotton are included in Schedule N, section 437, of the Payne Tariff Act, being dutiable at 35 per cent ad valorem. Practically all the safety fuse which is imported into the United States comes under this section. We know of none which is classed as being composed in chief value of cotton. In previous acts there was no separate classification for safety fuse, and, consequently, it was classed according to the component article of chief value, either jute, cotton, or gutta-percha, the rate being from 35 to 45 per cent. We wish to enter ourprotest against any reduction of the duty from the present rate of 35 per cent. Safety fuse is used in mining and blasting, and this is practically its only use. The fuse conveys fire to the charge and consists essentially of a core of gunpowder surrounded by layers of textile and waterproofing materials. It is important that it be well and carefully made, as the lives of miners often depend on it. We have for some time been working with the United States Bureau of Mines with the view of making it as reliable as humanly possible and of prescribing all necessary precaution in its use. The industry in this country is a small one, because of the comparatively restricted field for its product. The amount of capital employed is approximately $3,000,000, and the number of persons engaged in the manufacture is only about 600. Because of the powder and other inflammable ingredients used, it is a very dangerous occupation. Our buildings are expensive because of the protection necessary for the employees, and no insurance can be carried on portions of the plant. The risk involved increases greatly the overhead expense, and if the volume of business now done should be materially decreased the effect upon the business would be disastrous if not destructive. Large quantities of safety fuse have been continually imported into the United States from European countries, the totals for the years ending June 30, 1911 and 1912, being somewhat over $100,000 annually, on which the Government collected a duty of more than $35,000 per year. With a lowering of the tariff we have every reason to believe the importation would increase, and American labor employed would be just so much less; in fact, German, Belgian, and Italian fuse manufacturers are only waiting for a lowering of the tariff to flood the United States with their product. The reason why the American manufacturers need the protection of a duty is that materials and labor are so much cheaper in Europe than here. The four principal materials entering into the manufacture of fuse are jute yarn, cotton yarn, cotton cloth, and powder. Owing to the cheap foreign labor and the duties levied by this country the prices for these articles are considerably higher here than abroad; in fact, all the materials, except gutta-percha, used in the manufacture of fuse in the United States are manufactured in this country from raw materials with American labor. European fuse makers employ about 20 per cent males and 80 per cent females; American, 65 per cent males and 35 per cent females. The comparison of the wages paid in the United States per day with those paid in England is as follows: United States-Males, $1.60 to $2 per day; females, $1.05 to $1.75 per day. England.-Males, $0.75 to $1 per day; females, $0.24 to $0.37 per day. Wages in Germany are about the same as in England. The above is for ordinary labor only. Skilled labor, of which a very considerable amount is required, we are obliged to pay from $2 to $5 per day. Our hours of labor are a little less than nine hours per day, and we have absolutely no one in our employ receiving less than $1.05 for same. A further reason against reducing the duty is that we get practically no benefit in freight rates from being situated nearer the point of consumption than European manufacturers. The ocean freight rate on fuse is very small indeed, whereas it is rated as first-class freight in this county-1. c. 1. and third-class c. 1. To many points 78959°-VOL 5-13-40 PARAGRAPH 437-AMMUNITION. in this country fuse pays a smaller freight rate from European ports than from New York City. In view of the above, we beg to urge you to retain the present rate of duty. To lower it will be to injure and perhaps cripple an industry which is important to the country. As above shown, it is a comparatively small one. A reduction of duty might easily go so far as to put the American factories out of business. It would be unwise to put the mines of the United States in a state of necessary dependence on European manufacturers for their fuse. ENSIGN-BICKford Co., Vice President. BRIEF OF J. FITZ. BRIND, DENVER, COLO. The COMMITTEE ON WAYS AND MEANS, DENVER, COLO., January 14, 1913. Washington, D. C. GENTLEMEN: Continuing the subject of my previous letters, I beg to state that the importation of fuse is approximately 5 per cent of the total consumption in this country. With a reduction of duty from 35 to 10 per cent, and the importation increased only fourfold (which is a reasonable estimate on account of the superior quality of the imported article and reduced cost to the consumer), the revenues would be even greater than at present. For instance, the annual revenue now amounts to about $35,000, but under the new law, based upon the above estimate, it would most likely be increased to $40,000. Paragraph 437 should read: "Percussion caps, blasting caps, etc., 30 per cent ad valorem; mining or blasting fuse of all kinds, 10 per cent ad valorem." That portion of the paragraph reading "not composed of cotton" should be eliminated, because cotton is exported to Europe from this country, and the increased duty to 45 per cent is wrongfully imposed on an American product. No blasting caps are now imported because of the prohibitive duty, but if reduced to 30 per cent (same as sporting caps)) the revenue would be considerably increased. Some years ago a dealer had the temerity to import a lot of caps, but immediately upon arrival the trust reduced the price of the domestic article to such an extent that the importer was compelled to sell at a loss in order to get rid of them, all of which goes to prove that even at the lower price the cap monopoly managed to keep the proverbial wolf from the door. The dutiable or market value of all grades of fuse should be precisely that of actual cost (as verified by United States consuls), and in that way avoid the useless annoyance and expense to the importer for reappraisement, because it is a fact that all such cases have heretofore been decided by the United States General Appraisers in favor of the importer and against the Government. Additional duty, such as penalty on appraisers' advances, should be refunded if importers' values are finally sustained. Very respectfully, BLIND MAN ASKS DAMAGES. J. FITZ. BRIND. Rendered sightless by the premature explosion of a patent fuse, William B. Abrams, 43, a miner employed in the Camp Defiance mine in Garfield County, filed suit to-day in the district court against the Coast Manufacturing & Supply Co. and Ensign Bickford & Co. for $50,000. These companies are represented in Denver by the California Powder Co. To build fuse works, Vice President and General Manager A. H. Merritt, of the Cast Manufacturing & Supply Co., of Oakland, stated while in Livermore last week that building operations would be begun on their fuse works in that town about March 1, and that the plant would be running full blast by midsummer. There will be 29 buildings erected on their recently purchased property, and the total floor space in them will be between 4 and 5 acres. Most of these buildings will be small, but others will be 250 feet long. They will be built of corrugated iron, with hollow tile brick for fire walls. In addition to the factory buildings and an office building, there will be residences erected for General Manager Merritt, Assistant Manager T. W. Mor PARAGRAPH 437-AMMUNITION. ris, Traveling Expert G. H. Tod, and Superintendent A. S. Cole. There will also be bunkhouses for 20 Chinese workmen. The above item was furnished by a San Francisco news agency, from which it can be reasonably inferred that the buildings to be erected within the short space of three months, and built of corrugated iron, etc., can not be very costly, yet the capital of the Coast Manufacturing & Supply Co. (of which R. H. Ensign, of Simsbury, Conn., is president) is capitalized for $1,000,000, one-twentieth of which represents the buildings and machinery, while the remaining nineteen-twentieths are covered by good will and water-mostly water. R. G. Dun & Co. also state that the parent concern (Ensign-Bickford Co., of Simsbury, Conn.) is a close corporation and highly prosperous. In proof of this, R. H. Ensign reported that the company had quite a large surplus over the capital stock of $1,600,000, but did not care to state how much it really was, except that a large part of their assets were in the form of first-class securities. SUMMARY. The duty on safety fuse should be reduced from 35 to 10 per cent, for the reason that the production of that article costs less in this country than abroad. Cotton, which forms an important part of the imported fuse, is exported from this country to Europe, and the duty unfairly placed upon a domestic product. The business in this country is practically owned by a trust (Ensign-Bickford Co.) which constitutes a monopoly, and President Wilson says "Business must be set free of any form or kind of monopoly." A reduction of only 10 per cent (from 35 to 25 per cent) will be of little benefit, because the duty is applied to the cost at the factory, and would be equivalent to only 5 per cent to the consumer, after adding the duty, cost of transportation from the factory to the various points of consumption in this country, as well as only a reasonable profit to the importer and retailer. American fuse is exported at 25 per cent less than for home consumption, and as the trust is just as eager to secure the foreign business as that at home, it must be obvious, even to the uninitiated, that a reduction of duty to that extent (from 35 to 10 per cent) will not affect American or Chinese labor. Blasting caps for mining purposes, also manufactured by a trust (another monopoly), should be placed upon the same footing as percussion caps used by sportsmen, namely, 30 per cent ad valorem, instead of $2.25 per thousand, and equal to about 100 per cent, which is nothing less than legalized robbery. Documents in support of the above have already been submitted to your honorable committee. Respectfully, J. FITZ. BRIND. DENVER, COLO., December 17, 1912. The COMMITTEE ON WAYS AND MEANS, Washington, D. C. GENTLEMEN: In my letter of 13th instant I inadvertently said "the original duties of the McKinley tariff were afterwards restored." It should have been the Dingley tariff of 1897. In that act the duty on blasting caps was $2.36 per 1,000-just 5 per cent more than the present duty of $2.25. No provision, however, was made for blasting fuse. The duty on gutta-percha covered fuse (that being the article of chief value) was 35 per cent, but if cotton was the principal item of manufacture it was 45 per cent, both being the same as at present. There are only two factories in this country making blasting caps the Metallic Cap Co. of New Jersey, with principal office in New York, but owned by the Du Pont Powder Trust, and the other in San Francisco, owned by the California Cap Co.-both factories employing less than 100 people altogether. When the present outrageous duty was first placed on blasting caps, it was done on account of the high tax on alcohol, large quantities of which were used in the manufacture (12 parts of alcohol and 1 part of fulminate of mercury), but at the present time denatured alcohol at the cost of 60 cents per gallon (instead of straight alcohol at $3 per gallon) is used, being only one-fifth of previous cost. PARAGRAPH 437-AMMUNITION. IN MEXICO. In Mexico there is a specific duty on blasting caps, as well as sporting caps, but the latter is ten times greater than the former, the actual rate on blasting caps being equal to an ad valorem duty of only 3 per cent instead of 100 per cent, as in the present Payne bill, while sporting caps are equal to 30 per cent. Blasting fuse has a specific duty equal to 7 per cent ad valorem, instead of 35 per cent in this country. Furthermore, importers of blasting caps in the city of Mexico are selling No. 3 (XXX) quality, at $2.75 (United States currency) per 1,000, but in the United States, precisely the same grade of domestic caps (owing to the excessive duty) can not be had for less than $5.50 per 2,000 which is exactly 100 per cent higher. The result is, the American miners are robbed right and left, and it is high time they should get the relief they long have sought. Respectfully, yours, J. FITZ. BRIND. BRIEF OF CALIFORNIA CAP CO., RELATIVE TO DUTY ON BLASTING CAPS. WASHINGTON, D. C., January 27, 1913. To the honorable Committee on Ways and Means: The undersigned, California Cap Co., is a manufacturer of blasting caps, with factory located on San Francisco Bay, Cal. It does not manufacture percussion caps, mining fuse, cartridges, dynamite, or powder. It asks that blasting caps be classified as at present and that the specific duty thereon be retained, as in paragraph No. 437 of the tariff act of 1909, for the reasons briefly stated below and to be accompanied with details if you desire further particulars in the matter of maintaining an exceptional industry. 1. The industry is small, but important. It is hazardous, and the capital invested is not large. Less than one and a half million dollars will cover the entire cost of the factories in the United States, of which there are four, all competitors. 2. Blasting caps are small, but essential to all blasting operations and the consequent industrial existence of the country. The cost of each cap is less than 1 cent, but the efficiency of expensive work, the life and limb of operator, and liability of employer depend upon its high quality. 3. From a tariff point of view, blasting caps are not revenue producers and never can be. The market is limited. Approximately $800,000 worth is all that are consumed annually in the entire United States. A larger quantity of caps would not be used if given away, because only one cap is placed in each blast. The Du Pont Co. sells such enormous quantities of other explosives, in which blasting caps of uniform quality are so necessary, that we venture to say they would be compelled to continue manufacturing caps even at a loss, and could make their dynamite sales carry whatever losses there might be on caps; hence the importations would increase only by what we small producers would lose. Kill us in favor of possible revenue and the Government would not derive over $25,000 per year, if that. On the other hand, our continued existence is worth infinitely more than this to the consumer and to the Government as well as to ourselves. 4. The results of a revision of the tariff, either by reduction or by an ad valorem rate, lower than 75 per cent, will be—(a) dangerous to the consumer. (b) Will not benefit anybody except importers. (c) Will leave the business in the hands of only one domestic factory and foreigners. (d) Will make the country dependent upon irregular supply because the opportunities for shipment are restricted on account of passenger vessels not being permitted to transport blasting caps. (e) Will necessitate the transporting and warehousing of large quantities of an article dangerous at its best. (f) Will encourage competition in cheap caps of insufficient strength, hence dangerous. 5. The United States Government appropriates nearly half a million dollars each year to its Bureau of Mines, one of whose aims is to encourage the general use of highgrade caps with all explosives so as to prevent one of the very menaces which a reduction in duty would stimulate, namely, the sale of cheap caps of insufficient strength to inexperienced miners and farmers who are using dynamite more extensively in agricultural pursuits. Modern high explosives are purposely made less sensitive so as to be handled with comparatively less danger. Being less sensitive they require larger and stronger caps. It is very dangerous and may cause inestimable losses in other ways if a low-grade or cheap cap get into any of these so-called "safety" or "per PARAGRAPH 437-AMMUNITION. missible" explosives. Nevertheless the inexperienced are tempted to buy these cheap caps when they get a chance. So we feel that the good work of that bureau should not be blocked by a move to derive a few thousand dollars' revenue and at the same time bring about a condition which may cost the Government a few lives and several hundred thousand dollars to correct. 6. It is public policy to maintain the present ideal conditions, as to locations of blasting-cap factories on the Pacific and Atlantic coasts and in western Pennsylvania. There is also one projected in the Middle West. These factories make a convenient distribution of the product for the consumer to minimize the risk of accidents to the traveling public in the matter of having the dangers from transportation and storage not extend farther than necessary; and also having supplies available to the consumer not so far away as to make consequent high cost of freight and slower deliveries. 7. Consumers are satisfied with present conditions. They get a "square deal" and fare as well and in some instances better than consumers in foreign countries, both as regards price and quality. All of the caps that can reasonably be used in a round of blasts costs on an average of 24 cents per miner per day, for the best quality. Experience has proven that quality, reliability, and availability are more important to the consumer than saving the mere part of only 1 or 2 cents a day, when several hundred dollars' worth of work is so largely dependent upon it, to say nothing of possible personal injury or loss of life. 8. Blasting caps being contraband of war, it would be poor economic policy to kill so important an industry. 9. Canada has only one blasting-cap factory, which is sufficient to take care of the requirements there, and that Government recognizes the necessity of protecting it by tariff. No importations are made into Canada, either from the United States or elsewhere. 10. The present duty here is a fair difference between cost here and abroad on caps of desirable quality; it gives life to us, the independent manufacturers, and stimulates domestic competition. In conclusion, a lower rate of duty can not make blasting caps a revenue producer, can not benefit the consumer, and can not continued the advisable existence of us small independent producers. The justice of maintaining the present specific duty, "blasting caps $2.25 per 1,000," should therefore be recognized and this duty continued for the cogent reasons above stated. Respectfully submitted. CALIFORNIA CAP Co., By R. L. OLIVER, Manager. BRIEF OF E. I. DU PONT DE NEMOURS POWDER CO. The WAYS AND MEANS COMMITTEE, House of Representatives, Washington, D. C. GENTLEMEN: I would like to impress upon the minds of the committee the fact that the manufacture of blasting caps, considered as an industry by itself, apart from the manufacture of high explosives in the detonation of which they are required, is a business of small volume. The total trade in the United States does not exceed $1,000,000 annually. This trade is supplied by three factories, and the total annual output is approximately 200,000,000 caps. The unit of production is 1,000 caps. Thus there are 200,000 units. It would seem, therefore, that from the viewpoint of revenue the industry, whatever the tariff may be, will be all but negligible. With the present tariff reduced it is doubtful if the revenue derived from importations would reach a total of $75,000. This is on the assumption that the foreign manufacturers might supply one-half the caps annually consumed in the United States. The effect a reduction of the present tariff, which is $2.25 per thousand, would have on the business of the Du Pont Co., while important, is not vital. Our business consists chiefly in the manufacture and sale of explosives, and in order to protect the infegrity of our product we will be compelled to continue the manufacture of caps whether we make any profit on them or not. Upon the quality of the blasting cap depends the efficiency of the explosive and the safety of those who are engaged in its While the cap itself is of little financial value, its importance in connection with the blast is vital. A strong cap means complete detonation, and complete detonation means a perfect blast free from dangerous gases. A weak cap means incomplete detonation and a consequent imperfect blast with the generation of those poisonous gases which are the terror of all miners. use. |