to which it may be applied, to any article enumerated in this title as chargeable with duty, the same rate of duty which is levied and charged on the enumerated article which it most resembles in any of the particulars before mentioned; and if any nonenumerated article equally resembles two or more enumerated articles, on which different rates of duty are charged, there shall be levied, collected, and paid on such nonenumerated article the same rate of duty as is chargeable on the article which it resembles paying the highest duty; and on all articles manufactured from two or more materials the duty shall be assessed at the highest rate at which any of its component parts may be chargeable. The effect of this section probably was not considered at all, and probably was not even called to the attention of the court in United States v. Stone, supra, for it is not referred to in any way by either of the courts that considered the question. From the language of the opinion of the district judge, it is perfectly apparent that the "imitation parchment," "parchment No. 2," and "grease-proof wrapping paper," the imported articles, were very similar in many particulars to the parchment papers referred to in section 308, Schedule M, of the act of 1894. With this admitted similarity, it seems probable that the court would have sustained the general appraisers in their decision to classify these importations as parchment papers if section 2499 had been referred to or considered in any way. The Treasury Department, in decision No. 22163, followed the case of United States v. Stone, supra, and it has been the practice since that decision in 1900 to admit all these papers described as grease-proof, pergamyn, imitation parchment, glassine, parchmyn, and japanin under the general classification of section 402, act of 1897. Since 1895 the above-described papers have been made in this country. The industry is new and, in view of the facts presented here, the case demands a new interpretation of the meaning of parchment papers and a consideration of the effect of section 7, supra, on the whole matter. 2. Parchment: A true parchment is the skin of a calf, sheep, or goat, prepared for writing on. Parchment papers, the term used in paragraph 398, should be given a broad construction and include all papers that are similar in appearance to the real parchment and derive their name from that fact. Grease-proof, pergamyn-one of the names of the imported grease-proof-and other papers manufactured by this company have many of the qualities of parchment papers and, while differing in name, are largely used for the same purposes. 3. Grease-proof: The grease-proof and parchmyn papers, which terms apply to all the papers manufactured by this company, in many cases are substituted for parchment paper; both our papers and parchment papers are largely used by meat packers in this country for the same purpose, viz, wrapping smoked meats, lining lard pails and tubs. They are also used interchangeably by grocerymen, bakers, confectioners, poultry packers, and soap manufacturers. Our papers are used because of the quality they possess of being practically impervious to greases. Parchment papers have the same quality. 4. Process of manufacture: Parchment paper which is used for the same purposes as the papers manufactured by this company is produced by subjecting paper known as "unsized" or "waterleaf," made of cotton or sulphite fiber, or both in combination, to a bath of sulphuric acid, which renders it practically impervious to grease, while the paper manufactured by this company is rendered impervious to greases by treating the sulphite fiber from which it is made in such manner, by mechanical appliances, as to gelatinize it, making the resultant sheet of paper very dense, nonporous, and therefore practically impervious to greases. 5. Similarity in appearance: The papers manufactured by this company are not only used as a substitute for parchment paper in many cases, but they are so similar to it that it is often difficult, except by an expert, to detect any difference at all between them. Attached hereto are samples of our grease-proof paper, marked " Exhibit A," of imported grease-proof paper, marked Exhibit B,” and of parchment paper, marked Exhibit C." 66 66 6. Requires skilled labor: The process of manufacturing the papers produced by this company requires the highest skilled and the highest priced labor used in the paper industry. The results obtained are the most perfect possible from the use of wood fiber. 7. Production limited: The care necessary to be used in the manufacture of these papers renders the production from a given unit of labor very small; therefore the cost of labor is a very important factor in the total cost of production. 8. Cost of production and labor cost: These papers are largely produced in Germany and Sweden, both of which countries export their product to this country where it is sold in competition with the same grades of paper manufactured here. Attached hereto as Exhibit G is a statement of the comparative cost of production of this class of paper, showing the cost of labor in German and Swedish mills to be about 42 per cent of the cost of labor in a mill of the same capacity in product to this country, where it is sold in competition with the same from which the paper is made is at least $10 per ton less to the German and Swedish mills than the price of American sulphite from which our paper is made. 9. Amount imported and American production: Effort has been made to obtain a correct statement of the amount of these papers imported into this country, but owing to the fact that they come in under the unclassified list, it has been impossible to obtain exact information. From the best information obtained-that is, from our knowledge of what is used by the large consumers and other information from the importers themselves, we believe that the amount exceeds 10,000 tons annually, all of which, representing a value of more than $1,000,000 per year, would be manufactured in the United States if adequate protection were afforded. It is certain, also, that the use of this class of papers is growing rapidly. 10. Cost delivered: On account of the low cost of labor and of raw material and the low cost of ocean freights, the Germans and Swedes are able to deliver this paper on the Atlantic and Pacific seaboards at a price varying from $10 to $15 per ton below our cost of production, as shown in Exhibit "H" attached hereto, which exhibit sets out the prices at which the foreign product has been purchased by New York importers from 1902 to 1908, inclusive. Exhibit "H" further shows that since 1905, when this company began the manufacture of these papers, the price of the foreign product, especially that grade known as "Parchmyn" has been reduced an average of $10 per ton below the price at which it was offered previous to that year. 11. Synonymous terms: The terms "imitation parchment, grease-proof," and " pergamyn" are synonymous terms, being simply trade names for the same grade of paper, and are applied to the grade of this paper which is nontransparent, and the terms "glassine," "parchmyn," and "japanin " paper are synonymous and are applied to the grade of this paper which is transparent. All of these papers are produced from the same basis, the transparent grade being the result of an advanced process to which the nontransparent base has been subjected. 12. Waxed or paraffined papers: At the present time we understand that all imported waxed or paraffined papers are classified and dutiable as surface-coated papers under paragraph 398. This class of paper is used interchangeably with glassine, parchmyn, and japanin papers by confectioners, bakers, grocerymen, packers, butchers, soap makers, and others for wrapping merchandise, where it is desirable to use a transparent paper for showing the contents of the package and a paper impervious to grease, to protect the customers' hands from the greases or fats of the contents of the package. Attached hereto is Exhibit D, showing sample of waxed papers, and Exhibits E and F, showing samples of glassine, parchmyn, and japanin papers, all of which in many cases are used for identically the same purposes. 13. Process of manufacture: Waxed paper, made for the purposes above stated, is made of sulphite fiber and then coated with paraffin, which gives it a transparency and renders it partially impervious to water and greases. Glassine paper is made of the same material and rendered transparent and partially impervious to grease and water, as heretofore stated, by mechanical processes, and is preferred by many users for the reason it is not coated with paraffin and contains no oils, greases, nor chemicals, and because of its purity is an ideal food wrapper. 14. Classified as surface-coated papers: Since both classes of paper, viz, waxed paper and glassine, are not only similar in appearance, but are made from the same material and are used for the same purposes, they should therefore be classified the same as surface-coated papers, under the authority of section 7. 15. General: It will be noted that no request is made for an increase of tariff rates affecting the paper industry, but this grade of paper which is now being imported into this country and which comes in direct competition with the same grade of paper manufactured by this company and other manufacturers of the United States is now made dutiable under the unclassified list at 25 per cent ad valorem. We have shown that some grades of this paper are used interchangeably with parchment paper; that for many uses they are equally as good as the parchment paper. We have shown that other grades of this paper are used interchangeably with waxed papers, now classified as surfaced paper; that for many purposes they are as good as waxed paper and for many purposes very much better; that it requires an expert to detect the difference between the two classes of papers, and that the labor required to produce it must be as skillful and as expensive as that used to produce parchment paper. For these reasons it was the 61318-SCHED M-09-16 evident intention of the Congress which passed this act that this paper should bear the same duty as the parchment paper and that it should be classified in paragraph 398, under Schedule M-pulp, papers, and books. All of which is respectfully submitted to the consideration of the Ways and Means Committee of the House of Representatives. HARTFORD CITY PAPER COMPANY, By B. A. VAN WINKLE, General Manager. Exhibit A, sample of imitation parchment, or grease-proof, made by Hartford City Paper Company. Exhibit B, sample of imitation parchment, or grease-proof, imported from Germany. Exhibit C, sample of parchment made in this country. Exhibit D, waxed paper, classified as surface-coated paper under paragraph 398. Exhibit E, sample of white glassine, parchmyn, and japanin paper, made by Hartford City Paper Company. Exhibit F, sample of white glassine, parchmyn, and japanin paper, imported from Germany. EXHIBIT G. Cost of producing grease-proof and glassine papers, at Hartford City Mill, August 1, 1908. The total labor cost in an American mill producing 8 tons of greaseproof and glassine papers is $169.99 per day. The entire conversion cost, not including raw material, is $390.96 per day, or $48.87 per ton of production. The above statement of cost of producing imitation parchment, grease-proof, pergamyn, glassine, parchmyn, and japanin papers in the mill of the Hartford City Paper Company are made up from the records as they appear upon the books of the company on August 1, 1908, and are true, as I verily believe. B. A. VAN WINKLE, EXHIBIT H. Itemized statement of cost of making grease-proof and glassine papers in Klara Fors, Sweden. The total labor cost in a Swedish or German mill producing 8 tons of grease-proof and glassine papers is $85.71 per day. The entire conversion cost, not including raw material, is $261.91 per day, or $22.74 per ton of production. Total conversion cost__ Conversion cost, per ton, based on 8 tons production___ Cost of sulphite if bought--- Recapitulation of cost. Cost of sulphite if produced at mill, per ton paper.. Sizing Total cost___. $261.91 32. 74 28.00 35.00 $30.80 32.74 1.50 65. 04 The above statement of cost of making grease-proof paper in the Klara Fors (Sweden) mill was given to the Hartford City Paper Company by one of the owners, and is thoroughly reliable. EXHIBIT I. Comparison of wages per day of paper-mill employees in Sweden and America. |