My predecessor speaks of bronze printing as being counted as three colors. The commercial term for bronze printing is one and one-half colors. There is no such thing as three colors at all.

The CHAIRMAN. That is all, I think.

Is there any other gentleman who can present anything new on this subject that has not already been said?"

Mr. WAGNER. Shall I leave these samples?
The CHAIRMAN. File your brief there.

Mr. WAGNER. Just one moment. It was said a while ago by my predecessor that there were no cigar labels exported to Europe. I have here some samples of the American Lithographic Company showing their agent in Holland, another one showing their agent in London, and another one showing their agent in Hamburg. They do export their cigar labels right into England and Germany in competition with those made in those countries.

BRIEF SUBMITTED IN BEHALF OF KAPPLER & MERRILLAT AND OTHERS RELATIVE TO CIGAR LABELS.

WASHINGTON, D. C., November 21, 1908.

COMMITTEE ON WAYS AND MEANS,

Washington, D. C.

GENTLEMEN: In the matter of the revision of paragraph 400 of the tariff act of 1897, so far as said paragraph applies to cigar labels, flaps, and bands.

BRIEF FOR IMPORTERS.

Cigar labels, flaps, and bands are produced by ordinary lithographing processes. Labels and flaps are interchangeable names for prints attached to any part of a cigar box. Bands are small lithographs wrapped around cigars.

Prior to the tariff act of 1894 no distinction was made between this class of merchandise and other lithographic prints. In that act (paragraph 308) separate provision was made for cigar labels, flaps, and bands at rates much higher than those prescribed for lithographic prints. This distinction was retained in paragraph 400 of the tariff act of 1897 and even a more unfair differential in rates was created. An abstract of the provisions of both acts follows:

Act of 1894.

Lithographic prints not exceeding .008 of an inch

per pound 20 cents. exceeding .008 of an inch but not exceeding .020 of an inch, and exceeding 35 square inches cutting size

per pound 8 cents.

Act of 1897. Lithographic prints not exceeding .008 of an inch

per pound 20 cents. exceeding .008 of an inch but not exceeding .020 of an inch, and exceeding 35 square inches but not exceeding 400 square inches cutting size

per pound 8 cents. exceeding 400 square inches cutting size

35 per cent.

Except for the addition of a provision for prints exceeding 400 square inches cutting size, the tariff act of 1897 reenacted the rates prescribed for lithographic prints in the act of 1894.

Cigar labels and bands were much differently dealt with. The line of classification was changed from ten colors to eight, increasing the duty on a large line that had been admitted at 20 cents per pound to 30 cents, an increase of 50 per cent. Goods printed wholly or in part in metal leaf were made to pay 50 cents instead of 40 cents per pound-25 per cent increase.

Mr. Louis C. Wagner, who appears before this committee now and who was here in 1897, testifies that this unfair distinction represents neither the views of the House nor of the Senate of that time, nor of either of the committees who had the Dingley bill in charge. As originally passed by both Houses the bill eliminated the distinction, but it was returned from conference in its present form. Being a measure of great importance it was enacted without further delay.

The subjoined table, referring to samples submitted, shows the operation of paragraph 400 of the present act on these two classes of lithographic prints:

Lithographic prints other than cigar labels.

(1) That cigar labels (small editions) produced in this country are sold to the trade for almost the cost of foreign goods, without duties added.

Example: Samples K, "Leila." The German cost for duplicate prints is $11.50 per 1,000 sets; duty added, cost $16.60. A domestic firm is now making a first edition of these labels, including outlay for lithography and embossing die, and selling the same at $16.50, agreeing to furnish subsequent editions at $12.50, against the foreign cost for like subsequent editions which, with duty added, is $16.60.

(2) If cigar labels were free of duty the larger editions, comprising the most profitable part of the trade, could not be imported and sold here without loss as low as like goods can be profitably sold by domestic lithographers.

Examples." La Elegancia," samples G, three pieces: Foreign cost for 50M, insides and outsides, $9 per 1,000; duty, $4.80; total, $13.80. Foreign cost for flaps "A. M. C.," $3.50; duty, $2.40; total, $5.90. Total German cost for set, $12.50; duty, $19.70.

This same design will be found on and inside of cigar box submitted, made in New York, copied from the imported and sold by the maker at not more than $10 per 1,000 sets, including the extra end label or color mark.

Recapitulation. Foreign cost for three pieces, $12.50, with duty, $19.70, against the selling price of not over $10 for domestic work of four pieces.

There are submitted samples of cigar labels originally made for Mr. Wagner in Germany and samples of the exact labels copied later by lithographers in New York. "Alexander Humboldt " set, collection E, five pieces to the set, made abroad in 50M sets, at $13.50 per 1,000 sets; adding duty makes the actual cost $23.40.

The same designs, samples F, are domestic work copied from the imported. This set has six pieces, an additional long back strip, and the manufacturers' selling price to the trade is $16.15 per 1,000 sets of six pieces. If the importers had furnished this additional back strip the German cost would be $15, or, with duty added, $25.65, against the selling price of $16.15 for domestic work."

Samples H, foreign work, cost $10; with duty added, $14.80. Samples J, domestic work, copied from the imported goods, is sold at less than $10.

The loose samples of Mi Favorita and La Gira labels submitted are German work. The inside label Mi Favorita and the set La Gira are printed in metal leaf. The same designs which appear on

and inside of cigar box and covers are domestic work, also printed in metal leaf and copied from the imported. These samples demonstrate that metal-leaf work is produced in America with the same facility and excellence as abroad, and the testimony will show that these specimens can no longer be imported in competition with domestic work.

The present duty of 50 cents per pound on this class of label averages 73 per cent ad valorem.

The foregoing data are drawn from the testimony of Mr. Wagner, whose business is importing and selling cigar labels.

We direct especial attention to the testimony of Mr. Jacob Laux, of Chas. Stutz Co., purchasers of American goods as well, which we summarize.

Sample No. 1, originally made in Germany and bought here at $27.50 per M sets, was afterwards reproduced here at $17.50 per M. Sample No. 2, sold in Germany, including duty, at $22.50 per M sets; reproduced here at $13.50 per M.

Sample No. 3 was made here and sold to Chas. Stutz Company in 200 M lots, ins and outs, at $5.40 per M. The very best price made on this set abroad in same quantities was $8 per M; if duty were added, the cost would be $12.80 per M.

Sample No. 4 was bought in May, 1901, from domestic lithographers by Charles Stutz Co., in an edition of 50 M (ins, outs, and flaps), which was reproduced from an imported design, at $12.85 per M for the three pieces. This was a reproduction of the La Elegancia set and flap "A. M. C." referred to in the testimony of Mr. Wagner, the total German cost, plus duty, being $19.70 M.

The testimony shows:

per

That the samples offered are typical of the whole line.

That the importation of cigar labels, flaps, and bands is confined to not over four or five firms, of which the witnesses represent the most important.

That in no single year under the present act have the importations totaled in value $200,000.

It needs no argument to demonstrate that here is what might be an important source of revenue cut off by the prohibition rates of the present act.

At the same time, the importing firms, one of which, after twenty years of effort, has constructed a business occupied solely with these lines, are being threatened with ultimate extinction.

It is also shown that American lithographers, besides possessing a practical monopoly of the trade in cigar labels on this side, have for many years invaded the foreign markets, particularly Germany, where imported labels are produced.

The lithography and printing of cigar labels, it is shown, have made such great advances in the last twelve years that the present rates, if at any time justifiable, are now clearly exorbitant.

Furthermore, German labor in this industry, it appears, is much slower than American, 4.000 sheets of paper constituting a day's run there against 6.000 to 7,000 sheets here in the same space of time.

Another difficulty the importers labor under is presented by the domestic imitations of their original designs, saving the American lithographer the expense of an original painting or sketch, and the work of the artist-lithographer who draws such design on stone. The

testimony shows the great saving effected by copying a design from the printed label.

The high specific duties forbid the foreign label being printed on the same weight of paper as used in the domestic goods, which show the embossing to better advantage after the label is pasted on the box by reason of the thicker stock.

More particularly referring to cigar bands, it is shown that these goods are made by domestic lithographers and sold to the trade at practically the same prices as they are sold for in Germany for export, excluding duty.

It is submitted that the provisions of paragraph 400 of the tariff act of 1897, relating to cigar labels, flaps, and bands should be revised as follows:

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 whole or in part in metal leaf, 10 cents per pound; if printed in eight or more colors, but not printed in whole or in part in metal leaf, 15 cents per pound; if printed in whole or in part in metal leaf, 30 cents per pound. Cigar bands, if printed in colors and bronze, 15 cents per pound; if printed in colors and metal leaf, 40 cents per pound.

The provision of paragraph 400, calling for bronze printing only, is purposely omitted, there being no such class of goods imported.

As the samples submitted in evidence show, about one-half the space of a label or flap is blank paper.

The value of such paper, it is shown, runs about 8 cents per pound, for which paper, under the present provision, the same duty is exacted as if the whole were covered by a design, as in the case of ordinary lithographs.

A separate provision is therefore suggested for cigar bands, which are entirely covered with printing and are, moreover, cut to shape. The testimony offered fully supports the revision asked and shows that the rates suggested to this committee are entirely in accord with ample protection to American industry.

Dated, Washington, November 21, 1908.

AFFIDAVITS RELATIVE TO CIGAR LABELS SUBMITTED BY JOHN G. DUFFY AND LOUIS C. WAGNER.

SATURDAY, November 21, 1908.

CITY AND COUNTY OF NEW YORK, State of New York, ss:

Jacob Laux, being duly sworn, says: I am a member of the Charles Stutz Company, of New York; the business of said company is the manufature of cigar boxes and the sale thereof, together with cigar labels and flaps, to the trade. I bave read the brief submitted to the committee on the 21st instant and do declare that the figures stated therein with reference to specimen labels sub