tain colors are printed on this transfer paper. The paper is then sold to the potters and they transfer the colors from the transfer paper to the different articles of pottery requiring decoration. The pottery is then fired once more. Without the decalcomania the pottery industry in America could not exist to-day.

The CHAIRMAN. It would have to be done by hand?

Mr. PALM. Yes, sir.

The CHAIRMAN. Have you a specimen there where it has been transferred?

Mr. PALM. There is the material right on the pottery. [Exhibiting.] That is transferred.

We contend that the potter in America can not exist without decalcomania. He must have decalcomania, otherwise he is not in it. If you want to foster and help the pottery industry of America, this committee should put decalcomania on the free list instead of increasing the duty, although we do not ask that. We are satisfied as it is to-day.

The imports of decalcomania into this country do not exceed $400,000. It is a mere bagatelle. I have been amazed at the statements that have been made. It is like Colonel Sellers's "There are millions in it." Decalcomania is a little item, and the potter uses more than any other manufacturer in the world. The imports into this country of decalcomania amount to about $400,000 a year. The consumption here is in the neighborhood of between $600,000 and $800,000, just a small matter. We have been in business for a number of years. We could not compete by importing the decalcomania with the selling prices here, and consequently we had to open a factory, and we are running factories, and a number of others are also running factories. The item of decalcomania is so small that it does not cut any ice, and if you make any change in the duty you will simply hamper and jeopardize the manufacturers of America.

The CHAIRMAN. I think you have stated your point.

Mr. PALM. Yes, sir. If you put a prohibitive duty on decalcomania, you would simply give employment to about 400 people more and, on the other hand, you would probably knock out 5,000 people in the pottery business and several hundred thousand people in some of the cther branches, if you want to go that far.

Mr. UNDERWOOD. What is the rate of duty now?

Mr. PALM. Under paragraph 400 it was 20 cents a pound. The duty has been changed. Decalcomania has been kicked about like a football. It has been 35 per cent, 25 per cent, and 20 per cent. Mr. UNDERWOOD. What is it now?

Mr. PALM. The duty on decalcomania has been placed by one of the courts of Philadelphia, under paragraph 398, at 20 per cent ad valorem and 3 cents a pound.

The CHAIRMAN. We have access to those decisions.

Mr. UNDERWOOD. What does it amount to to-day, the 20 per cent ad valorem and the 3 cents a pound duty?

Mr. PALM. It depends on what kind of goods you import. If the goods are very expensive goods it would amount to more than 20 cents per pound. If the goods are cheaper it would not amount to 20 cents per pound. That is under the clause which is 20 per cent ad valorem.

Mr. UNDERWOOD. Is the rate 20 per cent on everything with the 3 cents added?

Mr. PALM. The rate is 20 per cent and 3 cents per pound, under section 398. Previous to that decision it was under section 400 at 20 cents per pound.

Mr. UNDERWOOD. You say that the ad valorem rate is about 20 per cent?

Mr. PALM. The ad valorem rate?

Mr. UNDERWOOD. Yes, sir.

Mr. PALM. Yes, sir. Now they have changed it to 20 per cent and 3 cents per pound.

Mr. UNDERWOOD. What is the rate of duty you are paying on this stuff when it comes into the country?

Mr. PALM. Twenty per cent and 3 cents a pound under the new ruling under paragraph 398.

Mr. UNDERWOOD. What does that amount to as an ad valorem rate? Mr. PALM. As an ad valorem rate?

Mr. UNDERWOOD. Yes, sir.

Mr. PALM. The ad valorem rate is 20 per cent. The 3 cents a pound does not amount to much; it is the 20 per cent.

Mr. UNDERWOOD. You say that about half of the product is made in this country and about one-half imported?

Mr. PALM. Yes, sir.

Mr. UNDERWOOD. How long has that been the condition?

Mr. PALM. Well, during the last four or five years, since several of these factories have established themselves and we have established ourselves.

Mr. UNDERWOOD. Has the business steadied down to a condition where one-half of the product is produced in this country and the other half imported?

Mr. PALM. Yes, sir.

Mr. BONYNGE. Where is your factory?

Mr. PALM. In Cincinnati.

Mr. BONYNGE. How large a place have you?

Mr. PALM. It is a pretty good-sized place.

Mr. BONYNGE. Is yours one of the large ones or one of the small ones?

Mr. PALM. Ours is one of the larger ones. There are only three or four others.

STATEMENT OF JOHN G. DUFFY, OF NEW YORK CITY,
TO CIGAR LABELS, FLAPS, AND BANDS.

RELATIVE

SATURDAY, November 21, 1908.

The CHAIRMAN. Mr. Duffy, do you want to be heard on cigar labels?

Mr. DUFFY. Yes, sir; on the labels, flaps, and bands.

The CHAIRMAN. Proceed.

Mr. DUFFY. Very well.

The CHAIRMAN. Can you not file a brief statement?

Mr. DUFFY. Yes, sir. There [indicating] is the brief, and I will be as brief as possible.

We desire to state, first, in answer to what has been said to the committee, that it is not true, at least of cigar labels, flaps, and bands, that they are not exported. We have with us here a foreign manufacturer of cigar labels, flaps, and bands who testifies that they meet a very sharp competition abroad from the American lithographer. It is also a fact that there has not been a single year under the Dingley tariff when there was imported into this country $200,000 worth of this item of lithographic prints. It is also a fact that the tariff of 1894 did not treat any more indulgently lithographic prints than they were treated in the tariff act of 1897. The cigar bands were thus treated in the tariff act of 1894; they were made dutiable under a number of colors, the lowest rate, 20 cents a pound, being applicable to 10 colors or less. The act of 1897 did not change the rate, but it did change the classification by saying "eight colors" or "less than eight colors."

Now, we think we have some standing before this committee on the proposition that it would be an advantage to allow the importation of cigar labels for the use of cigar manufacturers to be increased. Except for the bands, the cigar labels and flaps have not increased proportionately to the normal increase of business under this Dingley act. We represent a gentleman, Mr. Louis T. Wagner, who is the largest importer. It is a very small industry, the importing of cigar labels, flaps, and bands. There are only four or five firms engaged in it. Mr. Wagner, after twenty years devoted to building up the business, is now the largest importer.

The CHAIRMAN. What do you say the imports were?

Mr. DUFFY. Not over $200,000 in value.

The CHAIRMAN. Of domestic production is it much larger?

Mr. Louis C. WAGNER. Considerably so. Nine-tenths of the cigar labels are produced in this country and only about one-tenth imported.

The CHAIRMAN. You have a pretty good protection on cigars? Mr. WAGNER. I know nothing about the protection on cigars. The CHAIRMAN. I did not know what you considered good. Mr. GAINES. He said he is not a cigar maker. He is an importer of labels.

The CHAIRMAN. We will hear you briefly on this. You say it is not a very important matter?

Mr. DUFFY. It is important to our clients. I think I may point out here also, in answer to what has been stated, that the present rate of duty on cigar labels, as you will find on page 4 of our brief, is from 44 per cent up to 73 per cent, while just immediately above that you will see that the ad valorem equivalent of the other lithographic print duties runs to 27 per cent on the average. There is a clear injustice there. And now I want to come to the particular feature about cigar labels.

This is a cigar label [submitting specimens]. These things are generally about half paper.

The CHAIRMAN. We have seen them.

Mr. DUFFY. Yes. The paper costs about 8 cents a pound, and they put on that blank paper duties of from 20 to 50 cents a pound. We propose in the act to make a separate provision for labels and flaps, and a just provision, not grouping with them the bands. The bands are completely covered with lithographic work, and have to be

cut to shape besides. The label is usually more than half paper and not more than half lithography. We propose these rates, following the phraseology of the law exactly: "Lithographic cigar labels and flaps, lettered or blank, printed from stone, zinc, aluminum, or other material, if printed in less than eight colors (bronze printing to be counted as two colors), but not including labels and flaps printed in the whole or in part in metal leaf, ten cents per pound; if printed in eight or more colors, but not printed in whole or in part in metal leaf, fifteen cents per pound; if printed in whole or in part in metal leaf, thirty cents per pound. Cigar bands, if printed in colors and bronze, fifteen cents per pound; if printed in colors and metal leaf, forty cents per pound."

The CHAIRMAN. How much does one of those labels cost on a box of cigars?

Mr. WAGNER. It depends entirely on the number of pieces.
The CHAIRMAN. I mean, from the lowest to the highest?

Mr. WAGNER. If a set of four pieces is considered, which is an inside and an outside label and a flap and tag, the cost is about 41 cents a box, sometimes more.

The CHAIRMAN. You may proceed, Mr. Duffy.

Mr. DUFFY. We make the same classification on cigar labels printed in less than eight colors, bronze printing to be counted as two colors, but not including labels and flaps printed in whole or in part in metal leaf, ten cents a pound. This is on page 8 of our brief. But if printed in eight or more colors, but not printed in whole or in part in metal leaf, fifteen cents a pound. If printed in whole or in part in metal leaf, thirty cents per pound. Cigar bands, if printed in colors and bronze, fifteen cents per pound; if printed in colors and metal leaf, forty cents per pound.

The CHAIRMAN. You need not read your brief. That will be filed. We will read that.

Mr. DUFFY. I trust the committee will.

The CHAIRMAN. Now, if you have any other matters to state outside, please state them.

Mr. DUFFY. We just desire to file some samples.

The CHAIRMAN. To the same effect?

Mr. DUFFY. Yes.

STATEMENT OF LOUIS C. WAGNER, NEW YORK CITY, ON THE SUBJECT OF CIGAR LABELS AND DUTIES THEREON.

SATURDAY, November 21, 1908.

Mr. WAGNER. I beg to submit, Mr. Chairman, samples of the labels made in Germany and samples from some designs copied from the German and made in this country; made in this country because you can no longer import them because of the existing high rate of duty. These samples will show that the labels are the same in workmanship in every respect. For instance, I submit here a sample of a label called "Alexander Humboldt." This is it, right here. [Submits sample.]

The CHAIRMAN. Do you ask to have it put on the free list?

Mr. WAGNER. No, sir; I am a protectionist. I believe in protection, but I do not believe in prohibitive rates. I want a decrease in the rate because I think I am justified in asking for it. "Alexander

Humboldt" costs in Germany $13.50 a thousand sets for an edition of 50,000 sets. That is the cost in Germany, and including the duty, it will make the cost $23.40. The same design, sample F, which is composed of the same number of pieces-in fact one additional sheet, if we had made that additional back strip originally-costs $15 in Germany, and with the duty paid they cost $25.65, and they are being sold and printed here for $16.15 per thousand sets.

Now, if the importers had furnished this additional back strip, the cost on the other side, including the duty, would be $25.65, and without the duty $15; but that is sold right here to the trade for $16.15. Here is another, "La Elegancia." That consists of three pieces, and the foreign cost of 50,000 sets is $9 per thousand. The duty added makes it $13.80. The foreign cost of the flap, which is the third piece, is $3.50, and the duty included makes the total cost of $5.90. In other words, the German cost of these pieces is $12.50, and with the duty added, $19.60. The same design on this box [indicating] is sold by the domestic lithographer to the trade at less than $10 per 1,000 sets against a foreign cost of $12.50, or, with duty added, $19.60. The CHAIRMAN. Have you that all written out?

Mr. WAGNER. Yes, sir.

The CHAIRMAN. Kindly file it with your brief. We have not time for that.

Mr. WAGNER. All right.

Mr. UNDERWOOD. You say you are a protectionist, but not a monopolist?

Mr. WAGNER. No. I say I am a protectionist, but I do not believe in prohibitive rates.

Mr. UNDERWOOD. That is monopoly.

Mr. WAGNER. We contend that from the time we get the first edition of labels from abroad we can not get orders for subsequent editions, because the designs are being copied in this country and sold for less than we can import them for. We go to the expense of making costly sketches and from these the lithography on stone is made by experts, while in copying the imported design here from a printed label there is no expense for sketches, and the lithography from printed copies is usually made by apprentices at a cost of only one-half that if made from sketches.

Mr. DALZELL. You claim that the duty is prohibitive?

Mr. WAGNER. Yes; that the duty is prohibitive so far as reprints go, but not for the first edition.

Mr. DALZELL. You want it reduced so that the German and the American can come into competition with each other?

Mr. WAGNER. That I ask for a reduction to enable us to import duplicate editions of every design originally our own but being copied in domestic work and sold to the trade below the cost of German goods, and not because we want to compete with domestic work. That is not at all possible under existing duties and even without any duty at all, larger editions will be excluded anyway.

Mr. UNDERWOOD. What do you want the duty reduced to?

Mr. WAGNER. The 20-cent rate to 10 cents and the 30-cent rate to 15 cents, and those at 50 cents to 30 cents.

Mr. UNDERWOOD. You think that would be fair competition?

Mr. WAGNER. These rates would still be more than ample protection to domestic industry for small lots and yet excessively high for larger lots.