PARAGRAPH 437-AMMUNITION. As the art of making explosives has advanced there has come into ever-increasing use the so-called insensitive powders, by which is meant those powders which are not as easily exploded as is straight dynamite and which require stronger caps to effect their explosion. So-called permissible explosives are examples of the result of the splendid effort which has been directed largely by the Bureau of Mines, fostered by the Government. Strong blasting caps are absolutely essential to the carrying out of the results and recommendations of the Bureau of Mines. Indeed, in all the literature sent out by the bureau it urges the use of strong caps and goes so far as to say, "Permissible explosives are permissible only when used with the caps prescribed by the bureau.' None of these caps prescribed are of less strength than what is known as the No. 6 cap. Should this duty be reduced it would lead to the importation of cheaper low-grade caps, which would be a menace to the lives of all who use them. This is the most serious phase of this question. I have been in the business of manufacturing and selling explosives for 30 years, and I would say that, in view of the reduction of fatalities since the so-called safety explosives have come into use, if it were in my power I not only would forbid the importation from abroad, but the manufacture at home of the low-grade caps. It is true that for many years they were considered good enough to explode dynamite, but we have learned after bitter experience, having seen the terrible toll in human lives collected through the years, that they are not good enough. We know now that the stronger the cap the more complete and safer the explosion, and, in view of the ever-increasing uses to which dynamite is being put, this feature of safety should be considered of primary importance. I doubt if the members of this committee, or indeed anyone not engaged in the manufacture of explosives, appreciate the extent to which dynamite is now being used for agricultural purposes not only in blowing up stumps and breaking bowlders, but in planting trees, digging post holes, ditching, draining swamps, and subsoiling vast areas. This means that dynamite is to be handled by thousands of inexperienced people and emphasizes the importance of throwing around it every safeguard possible, and, above all, of decreasing its sensitiveness. The less sensitive the dynamite the stronger the cap must be. The American manufacturers of caps do not exact from the American consumers of caps an unreasonable profit, and if the members of this committee have any doubt on this subject our books are open for their inspection. Every additional advantage that comes to us in the manufacture finds its way to the consumer. As an instance, with the reduction in the cost of manufacture that came from the use of tax-free alcohol, we passed the advantage to the consumer. On the No. 6 cap this represented a reduction of $1 per thousand. I would frankly state that on the actual investment the du Pont Co. has in the business of manufacturing caps, hazardous though the business is, their return does not exceed 13 per cent. Summarizing, I would give the following reasons why a continuation of the present tariff seems advisable: First (and most important). To keep out of this country weak, foreign caps, the importation of which is a menace to the lives of American workmen not only in mines but in tunnels or on the farm or wherever they may be engaged in handling explosives. Second. So that American manufacturers will not be tempted in order to meet increased foreign competition, to take a backward step and produce in their own factories the weak and inferior grades of caps which they and the Bureau of Mines have in recent years so urgently advised consumers not to use. Third. Because it can be shown that the foreign manufacturer contemplates making this country a dumping ground. This is shown by prices quoted by German manufacturers for shipments to this country and Mexico as compared with their domestic prices, export prices being from 40 to 45 per cent less than the price to home consumers. To be more specific, they offer for shipment to this country at $1.96 per thousand the same weak No. 3 caps for which they charge their home consumers $3.57 per thousand. They offer their No. 6 for export at $3.57 while for home consumption they quote $5.95, a difference of $2.38, which is more than the present tariff of $2.25. Fourth. Because the difference in cost to manufacture in this country the grade of caps American consumers now recognize as a minimum reliable quality and the weak, inferior grade that would be imported from Germany under a lower duty is about equal to the present duty per thousand. Fifth. Because American manufacturers are not taking advantage of American consumers by requiring them to pay the limit the present duty would enable them to exact, but are in fact selling caps at a profit of about $1 per thousand, which is less than one-half the duty of $2.25; thus making the present tariff serve the purpose, not of filling the purse of American manufacturers but of helping to educate American PARAGRAPH 437-AMMUNITION. consumers to the use of caps that will render less frequent the terrible accidents of which we so often read where unexploded dynamite left after a blast subsequently explodes from the use of a pick or a steam shovel. Sixth. Because the demand for the reduction of this duty comes from importers and jobbers eager to make a small profit by handling the cheap foreign article. In conclusion, permit me to express the hope that the Congress of the United States that so wisely legislated to protect the consumer against impure food and adulterated drugs, will not, on the chance of securing the merest pittance in the way of revenue, take a step that will practically nullify the successful efforts made by those people who have worked to the end that every possible precaution and safeguard may be thrown around those who handle explosives. Do not invite a return of that awful death that so long "lurked in the blast." Respectfully submitted. E. I. DU PONT DE NEMOURS POWDER CO., By W. B. LEWIS. WASHINGTON, D. C., January 30, 1913. BRIEF OF F. BEHREND, NEW YORK, N. Y. The COMMITTEE ON WAYS AND MEANS, House of Representatives, Washington, D. C. NEW YORK, January 18, 1913. GENTLEMEN: I respectfully call your attention to the high import duty on blasting caps used by miners, paragraph 437. The duty of $2.25 per 1,000 caps, at the present price of detonators in Germany, would mean about 107 per cent, which duty is prohibitive. As much as I know there is only one firm manufacturing these blasting caps in this country, and they have a monopoly for this article. A duty of 25 per cent, in my opinion, would be ample protection. I also would suggest that one rate of duty on mining or safety fuses should be made, no matter out of what material they are manufactured. The present tariff is not very clear on this article. Thanking you for giving this your kind attention, I remain, Very truly, yours, F. BEHREND. German detonators, or blasting caps. 1,000 detonators, No. 3, in Germany.. Import duty per 1,000 detonators.... $2.10 2.25 Equals an ad valorem duty of 107 per cent. UNION CAP & FUSE CO., CLEVELAND, OHIO, RE BLAST ING CAPS. WASHINGTON, D. C., January 30, 1913 COMMITTEE ON WAYS AND MEANS, Sixty-second Congress. GENTLEMEN: In the interest of the Union Cap & Fuse Co., of Cleveland, Ohio, incorporated under the laws of New Jersey, I, as a representative of this company, do hereby petition that the tariff on blasting caps shall not be lowered from its present duty of $2.25 per thousand. Our argument is, that not only the raw materials which enter into the manufacture of blasting caps, namely, copper, mercury, alcohol, chlorate of potash, and nitric acid, but also labor, can be obtained at such a low rate in foreign countries, especially in England, Germany, and France, as compared with that obtainable in our country, that unless the existing prices of these raw materials and of labor can be reduced in an exact proportion to the amount of any reduction in the tariff on blasting caps our development of successful or practical results is highly problematical. We started our company only a few months ago in the belief that there is room for one more producer to operate in competition with existing United States manufactories, and while our investigation of possibilities in the venture are not extravagant, we have faith that we can pull our company through to a level of reasonable success. The summing up of our investigation and formulation of our plans are based on market conditions that have prevailed in the United States in the past and do not contemplate PARAGRAPH 437-AMMUNITION. competition with products manufactured under more favorable conditions as to cost of materials and labor. Relative to a situation that would place us in competition with foreign makers, we believe ourselves to be at a great disadvantage in the purchase of what constitutes to us raw materials inasmuch as conversion of same from the crude requires in our country labor that receives wages largely in advance of what is paid in other countries. This also applies in converting by our factory these raw materials into finished products such as blasting caps. Gentlemen, I believe you can readily understand our position in opposing a reduction of the tariff, and again ask that it remain at its present figure. I wish to thank GENTLEMEN: Referring to that portion of paragraph 437 of the tariff act of 1909 relating to blasting caps, I beg to submit the following statement, which will disclose to you the position in which we will be placed relative to the manufacture of blasting caps, should the duty on same be reduced. First. It will compel us to close our plant. At the present time we are not making any profit on caps, because it is impossible to compete with foreign caps and even with domestic caps, except in districts tributary to our own factory and at the same time maintain the high quality which is necessary in order to insure perfect detonation of the high explosives now being marketed. The Bureau for the Safe Transportation of Explosives and also the Bureau of Mines have done good work to secure high explosives of the least sensitive nature for the protection of life and property. It is necessary that caps of highest quality and strength be used for these modern and insensitive explosives. Materials and labor cost us considerably more here than in foreign countries: we even buy empty shells in Germany and pay 45 per cent duty, finding it cheaper than to manufacture them here. The close competition within the United States on both foreign and domestic caps compels us to market our product at little or no profit, and our books will verify this by an inspection, if desired. Second. An example of our position as compared with foreign caps can be brought before you by the fact that we are now figuring with a view of securing the business of a Pennsylvania company who import three to six million caps per year; the price which we quoted them was figured on a basis of profit less than 10 per cent to us, and we were informed that this company are now buying caps from Germany delivered here, duty of $2.25 included, at a lower price than our quotation. They now purchase in lots of 3,000,000 or more, so as to get the benefit of the minimum freight rate, and at that they have to depend upon tramp steamers, which often cause annoyance by delays, because steamers carrying passengers are not permitted to handle blasting caps. Also, handling and storing in large quantities is a great risk to both life and property in case of fire or explosion. Prices being equal, they would prefer to buy at home, as they could then purchase a smaller quantity at more frequent intervals, but we can not figure low enough to get the business. Third. We do not export any caps because we can not compete abroad with foreign manufacturers. Fourth. There are only a few companies now manufacturing caps in the United States; the business of all combined is not large. We are operating a plant which has a capacity of 20,000,000 caps per year, representing in value an aggregate of only $100,000, and this we estimate to be not over 10 per cent of the business done in this country. It is not possible to operate a smaller plant with any degree of economy. Fifth. The cap industry is small from a money standpoint, but it is highly essential to the explosive business which must have caps in order to detonate dynamite or high explosives, and caps only of the highest quality should be used in order to attain any degree of safety to life and property. I have no doubt every intelligent con PARAGRAPH 437-AMMUNITION. sumer will uphold you in encouraging the high standard of caps of these manufacturers. A reduction in the duty will inspire jobbers to import and urge upon the innocent or inexperienced consumers a cheap quality which will be a menace to life and other property just for the sake of the importer getting a little more profit. Sixth. The blasting cap item will never produce revenue from tariff, because it is such a comparatively small industry, and revenue should not be expected from it; because it is different from other industries in that it is so dangerous that only a few go into it. We are in it, for instance, because it is necessary to other of our interests, but from a manufacturing standpoint it is not as profitable under the present duty as are groceries or innumerable lines of general merchandise which do not carry the great risk, so I respectfully urge a continuance of the present duty of $2.25 per thousand, thereby not in any way hurting the interests of the consumer and giving the manufacturer a chance to do business, although not as profitably as such a dangerous business should be compensated for, but at the same time enabling us to do business not at a loss. I might add further that it is really to the consumer's interest to have what few cap factories there are maintained so that they will not have to be dependent upon a foreign source for so dangerous and important a part of their work, especilaly as the present price which the consumer pays for caps is very reasonable and he is not complaining. R. T. LYTLE, General Manager, Fort Pitt Powder Co., Pittsburgh, Pa. Very truly, yours, STATEMENT OF EMPIRE DYNAMITE CO., CHICAGO, ILL., RE DUTY ON BLASTING CAPS. Hon. OSCAR UNDERWOOD, CHICAGO, ILL., January 18, 1913. Chairman Ways and Means Committee, Washington, D. C. DEAR SIR: We wish to inquire if it would not be possible to obtain a readjustment of the duty on this commodity. At present the rate on blasting caps is $2.25 per thousand irrespective of the grade; that is, whether it is of No. 4, No. 5, or No. 6 quality. We think that this high duty is out of all proportion for the cost of the article, and herewith submit a few facts in connection with the same for your valued consideration. No. 4 blasting caps (commonly called quadruple force) at present take a list price of $6.65 per thousand in this country. Trade discount on same is 15 per cent off in small lots and 25 per cent off in case lots of 20,000 and over. Our cost on No. 4 cap is about $4.70 per thousand. Thus, in handling in case lots and over, there is practically no margin on the material. We wish to advise you that we can purchase this same article at a price of about $2.40 per thousand f. o. b. Hamburg, Germany, or about $2.70 per thousand delivered f. o. b. New York free of duty. You can therefore see that the duty of $2.25 per thousand approximates almost 100 per cent, and this on an article which is an absolute necessity in the development of this country. In addition to this it may not be commonly known, but the only concern that has heretofore been in position to supply blasting caps is the United Cap Manufacturing Co., of New York, which is owned and operated by the E. I. Du Pont de Nemours Powder Co. As you are probably aware, this is the chief powder concern in this country, and thus every time we purchase blasting caps we have to pay tribute to our own competitors. If we were helping a half a dozen or more American manufacturers pay their workmen a living wage by reason of this $2.25 per thousand duty on the blasting caps, we would feel satisfied it was for a good purpose and would have no objections, but as the situation stands at present we are simply paying tribute to our strongest and hardest competitors, and every shipment of case lots and over, they are necessarily aware of its destination and are therefore in a position to derive valuable trade information from this source in addition to the profit they obtain from the results of our efforts. We sincerely trust that you will see the injustice of the present situation on this commodity and that there may be some relief from same under the present revision of the tariff. PARAGRAPH 437-AMMUNITION. Any of the above statements can be readily verified from either of the other independent powder companies in the field, or probably from the cap manufacturers named above direct. Thanking you in advance for the courtesy of a reply in regard to the foregoing, we remain, Very truly, yours, Mr. DANIEL C. ROPER, EMPIRE DYNAMITE CO., CHICAGO, ILL., February 8, 1913. Clerk Committee on Ways and Means, Washington, D. C. DEAR SIR: With further reference to our letter of January 18, and your acknowledgment of January 21 with reference to duty on blasting cap, we note that we made an error in the name of the cap manufacturing company in stating same as the United Cap Manufacturing Co., of New York, whereas it is the Metallic Cap Manufacturing Co. For further consideration as to whether this duty should be removed we overlooked mentioning one of the principal reasons-the fact that at present in shutting out the foreign caps it is keeping off of this market a safety blasting cap. This is something that is sadly needed in this country, and it is very probable if there was local competition this would have long ago been placed on the market in this country. There is no patent covering the manufacture of the same, and they are manufactured by foreign countries and are in general use. They cost no more than the other kind, and would be the means of eliminating many accidents that at present occur only too frequently if they could be placed on the market in this country. With the duty removed it would be possible to import the safety cap. This for further consideration by the committee when the matter is taken up. EMPIRE DYNAMITE CO., THE ETNA POWDER CO. WRITE CONCERNING PERCUSSION CAPS. JANUARY 29, 1913. The WAYS AND MEANS COMMITTEE, House of Representatives, Washington, D. C.: As large manufacturers of high explosives, we are vitally interested in the consumer using efficient detonating caps with our explosives whether the caps be purchased from us or through others. An inefficient cap causes incomplete detonation of high explosives, thus giving poor results and increased hazard to the consumer. This in turn reflects back on the maker of the high explosives. Our experience, extending over a long period of years, has proven to us conclusively that caps imported by us and by others have not been efficient. If the present tariff means efficient caps we strongly urge that it be maintained. THE AETNA POWDER Co. BRIEF OF THE UNION METALLIC CARTRIDGE CO., BRIDGEPORT, CONN. BRIDGEPORT, CONN., January 31, 1913. The COMMITTEE ON WAYS AND MEANS, SIRS: With respect to paragraph 437, in Schedule N, fixing duty on imports of cartridges, the undersigned urge that there be no change in this item, and for two reasons. (1) The difference in the factory cost of this product abroad and in the United States is entirely sufficient to support our contention. In the factory cost the item of labor alone shows the manufacturer in Europe to have a marked advantage over the American manufacturer. The existence and the degree of this advantage have been so often demonstrated that a repetition of figures now is believed to be entirely unnecessary. The disadvantage of the American manufacturer is, indeed, no more than offset by the present duty. |