PARAGRAPH 472-PENCILS. of peat moss conduces to that end and makes it very desirable to extend the sale of this article to business stables, stock farms, dairies, and farmers generally. It is respectfully submitted that the placing of this article on the free list will help very materially to its wider distribution and use. JANUARY 24, 1913. PARAGRAPH 472. 160 Pearl Street, WALTER DURBROW, Borough of Manhattan, New York City. MONTAGUE LESSLER, of Counsel, 31 Nassau Street, Borough of Manhattan, New York City. Pencils of paper or wood, or other material not metal, filled with lead or other material, and pencils of lead, forty-five cents per gross and twenty-five per centum ad valorem; slate pencils, covered with wood, thirty-five per centum ad valorem; all other slate pencils, three cents per one hundred. See Geo. Borgfeldt, page 5224. PENCILS. STATEMENT OF PHILIP BEROLZHEIMER, NEW YORK, N. Y. NEW YORK, N. Y., January 29, 1913. Schedule N, Paragraph 472, Pencils. The HONORABLE WAYS AND MEANS COMMITTEE, Washington, D. C. GENTLEMEN: Labor in the pencil industry in the United States is four times as high as in Germany or Austria, three times as high as in England, and about 15 times as high as in Japan, where some 40 lead pencil factories have been established since that Government has put a protective tariff on Japanese made goods, and our export business to that country has been lost entirely since then. The Eagle Pencil Co. states that they pay to the employees in their London factory $3.48 average, against $10.72 per employee per week here for the same grade of work. Importations have increased since 1894 nearly nine times (see Government Statistics, Exhibit A, attached) in spite of the fact that a German maker started a factory and three other new pencil factories were established in this country during the last few years; and the Japanese pencil makers are just waiting for an opportunity to flood this market still more with their products. (See Exhibit C, Japanese made imitations of pencils.) Nearly all material in connection with the manufacture of pencils has to be imported, or transported for long distances subject to duties, freight, and profit to the importer. (See Exhibit B, attached.) Graphite can only be used from Mexico and Austria. This is a great disadvantage as compared with the Austrian pencil manufacturers, who have the graphite right at their door, in the same town in which the pencils are made (Budweis). Cedar is brought from long distances, from the Pacific coast and the Southern States, and is subject to very heavy freight charges. The farmer has always benefited by fair prices for his wood, whereas the foreign makers are now using a great deal of cheap wood grown in their home market with short freight haul. I refer particularly to German, French, and Japanese manufacturers, who use alder, asp, and German linden at ridiculously low prices. Exports of pencils, as shown in the Government reports, consist in reality of stationery novelties, the freight rate for pencils being 334 per cent lower than stationery, which goes under a class rate instead of a commodity rate. Most pencils exported are seconds, shipped to Canada, Mexico, and Cuba. Export business, which is now done to foreign countries by American pencil manufacturers, is mainly done from England, where two American manufacturers, The American Lead Pencil Co., and The Eagle Pencil Co., have, during the last few years, established branch factories with a view of regaining some of the export business, which they have lost on account of the high labor in this country. An ad valorem duty without a specific does not secure a proper amount of duties, inasmuch as the basis of valuation in Germany and Japan is so ridiculously low, that a PARAGRAPH 472-PENCILS. considerable reduction from the present rate would bring to the Treasury scarcely any revenue. If you consider a reduction of paragraph 472 necessary, we ask you not to eliminate the specific entirely, on account of gross undervaluations and frauds which were practiced. I will mention one fine of nearly $40,000 imposed on a foreign pencil manufacturer, under an ad valorem duty, as published in the Treasury Department Circular No. 40 of 1896. A reduction in this case would not benefit the consumer nor increase the revenue for the Government. All of the undersigned interested in the manufacture of pencils are entirely independent. There is no trust or monopolistic combination, restiction of output, division of territories, or any other entangling alliance, and competition is free and in full force. We therefore ask that the present tariff be retained. Very respectfully, yours, PHILIP BEROLZHEIMER. Also representing American Lead Pencil Co., Hoboken, N. J.; Joseph Dixon Crucible Co., Jersey City, N. J.; Eagle Pencil Co., New York; Eberhard Faber, Brooklyn, N. Y.; Essex Lumber Co., New York; Houston & Liggett, Lewisburg, Tenn.; Hudson Lumber Co., Chattanooga, Tenn.; National Pencil Co., Atlanta, Ga.; C. Roberts Rubber Co., Newark, N. J.; Lippincott Pencil Co., Philadelphia, Pa. EXHIBIT A.-Importations of pencils to United States. 153,967 367,711 139, 480 1900.. 82,206 246,722 1911. 128, 269 126,611 410,601 1903. 159, 625 EXHIBIT B.-Materials which we use and on which duty is paid. Hon. JEFFERSON M. LEVY, Washington, D. C. DEAR SIR: This a petition to represent your constituents before the Ways and Means Committee on Schedule N, paragraph 472, pencils, the hearings for which close Wednesday, January 29, 1913. We represent over 1,500 employees of the Eagle Pencil Co., located at East Thirteenth and Fourteenth Streets, in this city, which district you represent in Congress, and would say that more than 5,000 people are dependent on us directly. We have always received fair wages, which are now threatened by a possible reduction in the 78959°-VOL 5—13- -66 PARAGRAPH 472-PENCILS. new tariff on lead pencils, the tariff on which, under the Payne bill was 45 cents per gross and 25 per cent ad valorem. The specific duty has protected us on cheap and medium-priced pencils which, on account of cheap labor, could be brought in so cheaply from Germany, Austria, and Japan under a low ad valorem duty, that our very positions are threatened. We respectfully request that if the Committee on Ways and Means find it expedient to cut out all specific duty that they put a minimum ad valorem duty of 50 per cent on pencils. Trusting to receive a favorable reply from you, we remain, very respectfully, yours, LEON C. FELSER, Chairman. (The petition is signed by 1,214 employees of the above-named company.) MURFREESBORO, TENN., January 7, 1913. Hon. W. C. HOUSTON, Washington, D. C. DEAR SIR: Referring to Schedule N, Paragraph 472, pencils, of the present tariff: We object strongly to any reduction in the present tariff on pencils. A number of our people manufacture slats for pencil factories and any reduction in the tariff on pencils would make the price of the manufactured stock so low that some of our poeple would no doubt have to go out of business or cut the price of our labor to equal the pauper labor of Europe. The farmers own the cedar wood that is left in the Southern States, and a reduction in the tariff on pencils would mean a tremendous loss to these men. Red cedar formerly found only in the Southern States of this country is now shipped in large quantities and much cheaper from the German East African possessions to Germany, where the authorities have publicly recommended to the people not to use any other cedar. The lower the tariff on pencils here the more finished pencils will be imported made of the African wood, thereby cutting down the farmers' income and lowering the wages of the laborers. Our people depend for their living upon protection of the finished article made in this country as against the low-priced wood used in Germany, Italy, France, and Japan in the manufacture of pencils. Yours, very truly, JNO. M. BUTTES, President, First National Bank. (And 6 others.) (A similar petition dated Smyrna, Tenn., Jan. 14, 1913, with 12 signers was also received and filed.) Hon. W. C. HOUSTON, Washington, D. C. ROCKVALE, TENN., January 14, 1913. DEAR SIR: Referring to Schedule N, paragraph 472, pencils, of the present tariff: We object strongly to any reduction in the present tariff on pencils. A number of our people manufacture slats for pencil factories and any reduction in the tariff on pencils would make the price of the manufactured stock so low that some of our people would no doubt have to go out of business or cut the price of our labor to equal the pauper labor of Europe. The farmers own the cedar wood that is left in the Southern States, and a reduction in the tariff on pencils would mean a tremendous loss to these men. Red cedar, formerly found only in the southern States of this country, is now shipped in large quantities and much cheaper from the German East African possessions to Germany, where the authorities have publicly recommended to the people not to use any other cedar. The lower the tariff on pencils here the more finished pencils will be imported made of the African wood, thereby cutting down the farmers' income and lowering the wages of the laborers. Our people depend for their living upon protection of the finished article made in this country as against the low-priced wood used in Germany, Italy, France, and Japan in the manufacture of pencils. Yours, very truly, J. P. LEATHERS, J. P., PARAGRAPH 472-PENCILS. THE WAYS AND MEANS COMMITTEE, CHATTANOOGA, TENN., December 31, 1912. House of Representatives, Washington, D. C. GENTLEMEN: Referring to Schedule N, paragraph 472, pencils, of the present tariff: We object strongly to any reduction in the present tariff on pencils. We manufacture slats for pencil factories, and any reduction in the tariff on pencils would make the price of our manufactured stock so low that we would no doubt have to go out of business or cut the price of our labor to equal the pauper labor of Europe. The farmers own the cedar wood that is left in the Southern States, and a reduction in the tariff on pencils would mean a tremendous loss to these men. Red cedar, formerly found only in the Southern States of this country, is now shipped in large quantities and much cheaper from the German East African possessions to Germany, where the authorities have publicly recommended to the people not to use any other cedar. The lower the tariff on pencils here, the more finished pencils will be imported made of the African wood, thereby cutting down the farmers' income and lowering the wages of the laborers. We depend for our living on protection of the finished article made in this country, as against low-priced wood used in Germany, Italy, France, and Japan in the manufacture of pencils. Yours, very truly, The WAYS AND MEANS COMMITTEE, HUDSON LUMBER CO., LEWISBURG, TENN., December 31, 1912. House of Representatives, Washington, D. C. GENTLEMEN: We understand that the tariff will shortly come up for discussion, and we would request of you not to make any change in Schedule N, paragraph 472, for the following reasons: Since the last tariff bill went into effect we have invested a great deal of money in purchasing red cedar and red-cedar rails and represent a number of farmers in the purchase and sale of their red cedar (used almost exclusively for the manufacture of fead pencils) in this State. We ourselves own some good large tracts of cedar rails and are interested to an extent in a large mill here and one at Columbia, Tenn. There are a large number of farmers engaged in growing red cedar for lead pencils, and those who have good tracts of standing cedar are fencing same at an enormous cost to prevent depredation, believing in its future value for the use of pencils, and are growing and protecting same for their children. If the tariff on the above paragraph is reduced it will result in the cedar mills having to close down, as lead pencils made of cheaper and poorer wood would then be imported from foreign countries to the detriment of the southern farmers and laborers engaged in this industry, and take from the working people employment, there being thousands of such engaged in marketing, growing, protecting, and manufacturing this class of wood for present and future use. We will say here that the majority of the southern people are high protectionists and do not wish any change in the present tariff. Leaving out the mill industry, most all the timberlands on which there is cedar has tripled under the present tariff, and we can see no reason why it should be changed to the detriment of the farmers, who would be the sufferers as owners, and the laborers, who would suffer for want of work, all depending on this cedar to be manufactured into lead pencils and boards that are used for this purpose exclusively. We would again ask that you give this subject and the above facts due consideration when this measure comes up for discussion. Yours, very truly, HOUSTON & LIGGETT, Per C. C. HOUSTON. PARAGRAPH 473. PARAGRAPH 473-PENCIL LEADS. Pencil leads not in wood, or other material, black, three-fourths of one cent per ounce; colored, one and one-fourth cents per ounce; copying, two cents per ounce. PENCIL LEADS. TESTIMONY OF JOHN J. ROONEY, REPRESENTING RICHARD BEST, 29 BROADWAY, NEW YORK. Mr. ROONEY. Mr. Chairman and gentlemen, I am appearing here as an attorney and not as a manufacturer. Paragraph 473 of Schedule N covers pencil leads in wood; that is the black, the colored, and the copying pencil lead; the ordinary black lead that goes into a lead pencil. All the way back from the tariff of 1883 to the Payne bill, as it emerged from the conference committee of the two Houses, pencil leads were put down in the tariff at 10 per cent. They carried a 10 per cent rate from the tariff of 1883 up to the Payne bill. The pencil business in this country, as I am told by my clients, was built up on that proposition, of a moderate rate of duty upon the black lead, the colored lead, and the copying lead. Along in 1909, when the Payne bill was under discussion before this committee, an effort was made to take that rate out of the ad valorem class and to throw it into a specific duty, for the obvious purpose of raising it and concealing the amount of the raise. That attempt was made by four or five concerns in this country, who had combined, not in a single company, but into a gentleman's agreement a misnomer, according to my way of looking at it. They had agreed in practically all of the big biddings and in a particular part of the territory of the United States on prices. They attempted to have this rate thrown out of the moderate and decent rate of 10 per cent if any rate is considered decent on articles of this kind-into a specific rate. It did not succeed in the House; it did not succeed here in this committee. All the tariffs from 1883 had carried this 10 per cent rate, and practically all of the manufactories were built up on that, at least four or five of the leading ones who are well known. When this rate went into the Senate and emerged from the conference committee we have the following result, which exists to-day in the Payne bill: Pencil leads, not in wood, black, three-fourths of one cent per ounce; colored, one and one-fourth cents per ounce; copying, two cents per ounce. Those are the rates to-day. Mr. HILL. Let me ask you a question right there. In 1912 the rate on pencil leads, copying, seems to be 13 as against 2 cents in 1911 ? Mr. RAINEY. A cent and a quarter. Mr. ROONEY. A cent and a quarter on the colored. Mr. HILL. There seems to be a discrepancy in paragraph 473, pencil leads, not in the wood, or other materials, colored, seem for 1910 and 1911 to have been 11 cents. Mr. HARRISON. That is just a misprint, I think. |