PARAGRAPH 237–MACARONI. chamber to suggest for each singular commodity to this honorable committee what rate or rates would, in our opinion, combine the advantages of fair returns to revenue with the least burden upon the consumer. MACARONI, VERMICELLI, AND ALL SIMILAR PREPARATIONS. The present rate of 14 cents per pound on an article which, in the frugal diet of millions of our population and especially of consumers of small means, is a necessity, should be reduced to 1 cent per pound. The consumption of macaroni is now supplied, in almost equal shares, by foreign and domestic production. The latter has the advantage of cheaper flour, the protection of maritime freight (which on foreign macaroni is of about 9 cents per box of 22 pounds), of readier supply, of cheaper cost, selling from 77 cents for the cheapest grades to $1.10 for the best qualities per box, against average selling prices for the imported respectively of $1.35 to $1.45. Freight has increased on the imported article about 50 per cent in the past year. Importations of this article, which are mainly from Italy (supplying about 95 per cent of the total), have increased from 87,720,730 pounds in fiscal year 1907 to 114,779,116 in 1911, because the consumer demands the foreign article for certain specific qualities it possesses, i. e., higher glutenous content and better results in cooking, qualities these, which only the better grades of semola used abroad, and the climatic conditions under which the manufacture takes place, can secure. To facilitate its importations is, therefore, to secure to the consumer the advantage of a better nutrition, without any prejudice to domestic production, which, with the advantages of cheaper material, and cheaper cost of production through lower cost of power, finds an increased and prosperous market because of the reputation created to this food mainly through the instrumentality of the foreign product; so that domestic production can show to its credit an even more notable increase and prosperity than that shown by the foreign trade. A reduction of the duty to 1 cent per pound, such as recommended by this chamber, would still maintain to domestic production the advantage of about 25 per cent protection, with no prejudice to revenue. Cheese. The increasing consumption and importation of this important article of diet (from about 34,000,000 pounds in fiscal year 1907 to over 45,500,000 pounds in 1911) is a desirable feature from the standpoint of health and of notable benefit to revenue. The present rate of 6 cents per pound on the cheaper varieties of cheese is equivalent to an ad valorem rate of about 25 per cent and to a protection to domestic production ranging from about 30 to 40 per cent. Why such protection, when milk is produced in this country cheaper than in any other part of the world, owing to the abundance of fodder and the high-yielding productiveness of the animals compared with those of the countries furnishing the largest supply of cheese to the United States, is not easy to account for and all the more difficult to explain, when the fact is considered that foreign cheese, in its manifold types, does not enter into competition with the domestic article, from which it differs materially. The styles of cheese imported in the largest quantity from abroad are not produced in this country, save the Swiss cheese, and sell, as a rule, at a much higher price, being demanded for their peculiar characteristic qualities, which can not be reproduced in this country. Such cheese as Parmasan, Roman, Gorgonzola, etc., are imported because they can not be produced in this country, requiring for their production certain conditions of the dairy industry, pasturage, climate, and experienced hands which do not obtain here. These varieties are helpful in promoting the consumption of other important articles of American production (macaroni, rice, etc.). They enter largely into the consumption of the people of limited means who feel most keenly the present high cost of living. Under such circumstances, when the primary cost of the article has already increased for causes which are beyond remedial control, to which must be added the advance of about 50 per cent in freights, the additional cost caused by the present high rate of duty is heavier to bear than it was when better conditions prevailed regarding the primary cost of transportation outlays of this commodity. As no prejudice can derive to domestic production by reducing the present rate, nor to revenue, by reason of the probable increase in the demand which would thereby be stimulated, while a substantial relief would be felt by the consumer in the price PARAGRAPH 237-MACARONI. of this necessity, this chamber recommends that the duty on cheese be reduced from 6 to 3 cents per pound. Garlic. This article is not produced in the United States, but imported mostly from Italy and Mexico, in the fiscal year 1911 to the amount of 8,082,024 pounds, is used as flavoring in cooking or in the preparation of pickles and is subject at present to a duty of 1 cent per pound (under paragraph 261). It is worth from 3 to 4 cents per pound, so that it pays a duty equivalent to an ad valorem rate of over 27 per cent. There being practically no production in this country, the duty can not have any protective significance. The use of this vegetable, so popular among a number of the population originating from the Mediterranean and as a rule consumers of small means, seems to have a salutary effect as a disinfectant of the system and a preventative against certain troubles. Under such circumstances this chamber respectfully requests that it be exempted from duty. Likewise, this chamber respectfully solicits that dried red peppers, at present subject to a duty of 24 cents per pound (under paragraph 298), and which are not produced in this country, and are almost exclusively consumed by poor people, be placed on the free list. Preserved or prepared vegetables dutiable under paragraphs 252 and 253. Under these paragraphs are included tomatoes, artichokes, peppers, etc., preserved or prepared in tins, tomato sauce, and tomato paste, articles these subject to 40 per cent ad valorem, an exorbitant rate considering that they are articles of common use for a great number of our population and not luxuries. The importation of preserved tomatoes, of which Italy is practically the sole foreign provider, has, like that of tomato sauce, considerably developed of late years, so that of the former alone the importation increased from $541,080 in fiscal year 1907 to $859,395 in 1911, while that of tomato sauce has averaged in the last five years about $250,000 yearly. Preserved tomatoes are produced in this country far cheaper, as low as 772 cents per dozen of 3-pound tins f. o. b. at Baltimore, Md., against an equivalent of about 92 cents for similar goods f. o. b. Naples, with a difference therefore in the primary cost of production of about 15 cents. To the aforestated figures must be added, in the case of the imported tomatoes, the maritime freight of about 15 cents, while it is only 64 cents from Baltimore to New York, which difference, together with that in the primary cost of production, gives to the American article a natural protection of about 25 per cent, and to this must be added the present exorbitant tariff protection of 40 per cent ad valorem, bringing the total cost of the foreign article at New York up to $1.44 against 84 cents for the domestic article, which therefore enjoys a protection of over 71 per cent. The reason why preserved tomatoes are imported, notwithstanding the much cheaper domestic production, is that they are supplied to a class of consumers who, notwithstanding their small means, require them for their characteristic qualities of flavor, essential for the use to which they are destined, qualities that are not possessed in an equal measure by the domestic article. They do not compete with the domestic production, first because they are of different quality, second because of their higher primary cost of production, irrespective of duty. Freight on this, as on other preserved canned goods, has increased of late years to the extent of 50 per cent, another argument why they should not be subjected to the high rate of duty obtaining at present. These articles should be permitted to enter this country at a moderate rate of duty, because they are helpful to the consumption of alimentary paste, and a variety of other American foods, being used principally in the preparation of the dressing of these foods. Other advantages besides the above, showing both the necessity of a reduction of duty under this heading, as well as the fact that not the slightest prejudice would derive to domestic production from such reduction are: Less liability to deterioration from swelling of the domestic article, in comparison with the imported, which has to stand sea journey and change of climate; the fact that tomato sauce, artichokes, and peppers in tins are used exclusively by foreign people, and are not produced to any extent in the United States, thus eliminating any motive for protection, while the present duty, considering the small value of tomato sauce, ranging from 24 to 44 cents per 7-ounce tin, is excessive; the lower cost of tomatoes in this country than abroad, which would secure to any domestic manufacturer of this article a lower primary cost, rendering protection unnecessary. For the above-stated considerations this chamber, believing that no material loss would derive to revenue from the reductions suggested, respectfully recommends to PARAGRAPH 237-MACARONI. this honorable committee that the present rate of 40 per cent on preserved or prepared tomatoes and other vegetables, on tomato sauce and tomato paste, be reduced to 20 per cent. Fish. The importations under this heading include a variety of fish, such as tunny, anchovies, sardelles, etc., which are not produced in this country and have therefore to be imported, either under oil or salted. These commodities are already under the disadvantage of a high and increasing cost of production in the countries of origin, due to the scarcity of the yield from the fisheries and to the increased demand. The present rates of duty are unnecessarily high, and find no justification as protective rates, for no such fish is packed in the United States, while they only increase the cost of living to a numerous class of consumers. Tunny fish costs on the average 215 lire per 100 kilos, anchovies 135 lire, and sardelles 53 lire f. o. b. Genoa. There has been of late years an increase averaging from 10 to 35 per cent in the prices of these commodities, to which should be added the increase of 50 per cent in the freights. The present method of levying duties on fish is not devoid of considerable inconsistency and discrimination, because in the case of fish in oil, while it assesses the small packages up to a size of more than 33 and not more than 70 cubic inches with specific rates, it taxes the packages over that size at the rate of 30 per cent, which averages far higher, with no reason to justify such difference of duty on the same article. It is therefore apparent, for reasons of equity, that a flat rate on fish, both preserved in salt or in oil, based on the weight, would be far more acceptable than the present system of partly specific and partly ad valorem rates, which too frequently lead to controversies between importers and appraisers in establishing market values. This chamber is in favor of a flat rate of 1 cent per pound in packages of not over 5 pounds upon fish packed or preserved in oil or in salt, and of a flat rate of one-half cent per pound when in packages of over 5 pounds. Filberts-There is no production of filberts in the United States, and they are mostly imported from Italy to the amount of about 14,000,000 pounds in 1911. These nuts pay a duty of 5 cents per pound if shelled, and of 3 cents if unshelled (under paragraph 281). It is difficult to account for such high duty, since there is no domestic production to protect, while for revenue purposes a milder rate would probably yield as much as the present by encouraging importations and their use in confectionery and at table. This chamber recommends that filberts be included in paragraph 283 as "nuts of all kinds, shelled or unshelled, etc.," dutiable at 1 cent per pound. Respectfully submitted, LUIGI SOLARI, President. BRIEF OF ATLANTIC MACARONI CO., NEW YORK CITY. The COMMITTEE ON WAYS AND MEANS, WASHINGTON, D. C., January 20, 1913. House of Representatives, Washington, D. C. HONORABLE GENTLEMEN: We beg to submit the inclosed brief for your kind consideration, and beg to assure you that any further information or enlightenment will be cheerfully given at the present hearing or at any time at your request. Respectfully, yours, ATLANTIC MACARONI CO., New York City. [Inclosure.] WASHINGTON, D. C., January 20, 1913. COMMITTEE ON WAYS AND MEANS, House of Representatives, Washington, D. C. HONORABLE GENTLEMEN: It is our opinion that in order to place the macaroni industry in this country on an encouraging basis and permit it to compete on terms of equality with the imported article, an increase of one-half cent per pound, bringing the tariff to 2 cents per pound, would be fair and equitable. The present rate of duty has permitted some domestic manufacturers to survive, but records show that over 50 per cent of those who entered this business have been com PARAGRAPH 237-MACARONI. pelled to abandon it, mostly bankrupt. This has not been brought about by the formation of any sort of combinations, as the market is absolutely "open," resulting in very keen competition; but neither competition, lack of ability, nor ignorance of the business can account for such a large percentage of failures; and they can only be justly attributed to the invasion of foreign manufacturers operating under many advantages. Not Among these advantages is labor in Italy and lack of restrictions on same. only have we to contend with the cheaper male labor of Italy, but there longer hours are exacted; minors are largely employed; and there are no restrictions of the hours of employment of females, and both women and children are paid a mere pittance. While the stringent labor laws in effect in most of our States are laudable and have our hearty approval, they place us at a decided disadvantage, and which should be compensated in some form to encourage macaroni manufacturers here to continue. Other advantages in Italy are climatic conditions which permit natural open-air drying, enabling the manufacturers to erect, maintain, and operate their plants at a minimum cost, whereas in this country we are compelled to resort to artificial drying, involving great cost in equipment, maintenance, and operation, and consequently a heavier overhead charge. Moreover, the drawback allowed by the Italian Government is in effect a bounty to Italian macoroni manufacturers, and this, coupled with low freight rates by subsidized steamship lines, makes it possible for foreign manufacturers to invade the markets of this country. What else can explain that over 75 per cent of the macaroni exported from Italy finds its way to this country, and that even though the foreign manufacturers purchase wheat here, they can afford to bring it abroad, with all the expenses and risks involved, manufacture it into macaroni and send it here and after payment of duties, freights, and other expenses sell it at the same price per pound as it is sold in Italy. And still further-records fail to show any exportation of macaroni from this country to Europe or even to Canada, our nearest neighbor, where the duty is equal for Amerícan and foreign production, and freight rates favor the American manufacturer. If the American manufacturers are to be placed on a par with their foreign competitors, there now is only one way to offset the advantages enjoyed by the foreign manufacturer, and that is by a just and equitable duty on the foreign product. Statistics show that importations under the present duty have immensely increased (suffering only temporary checks due to cholera scares and the Italian-Turkish War), and this would tend to show that even admitting an increase in consumption, the American manufacturers have made but little progress. It therefore stands to reason that any decrease of the present duty would mean the arrest of whatever progress has been made and would result in the foreign manufacturers dominating this market to the extent of a monopoly. This is not a question of fear but of fact. On the other hand, an increase in the duty as we suggest would not only place the American industry on a competitive basis, but we believe that the Government would enjoy the same or greater revenue, and, at the same time, act with justice to domestic manufacturers. It should be further considered that any curtailment of this industry would not only bring hardship to invested capital, but affect those employed, and reflect on the farmer whose wheat is consumed, box manufacturers, paper mills, nail manufacturers, printers and others, whose products are also used. As marconi is admittedly ne of the most wholesome and nutritious foods, and at an extremely low cost in comparison with meats, we believe the development of this industry in this country should be assisted as much as possible, and the consumption encouraged as it may offer a solution of the problem of the high cost of living for people with small income. Respectfully submitted. ATLANTIC MACARONI CO., BRIEF OF C. R. SPLIVALO & CO., SAN FRANCISCO, CAL. Hon. JULIUS KAHN, C. R. SPLIVALO & Co. (INC.), House of Representatives, Washington, D. C. DEAR SIR: Having received information that the Ways and Means Committee of the House of Representatives is about to hold hearings on Schedule G, agricultural 78959°-VOL 3-13-33 PARAGRAPH 237-MACARONI. products and provisions, and fearing lest the tariff now existing on alimentary paste might be cut down, we offer you the following facts as a protest to any reduction in the tariff on this line of imported goods; which facts we beg of you to present to the committee, together with such other information or arguments you may deem proper. The principal reason for this protest is that by taking off the small duty now in force, of 14 cents per pound, it would place the manufacturers of these goods in the United States at a great disadvantage, compelling, in all probability, the large factories to go out of business. There is no article of food imported into this country wherein there exists such an enormous difference in the cost of manufacture between Europe and the United States as there is in the manufacture of alimentary paste. In Italy macaroni is the principal food of rich and poor. There are thousands of small and large factories employing the cheapest kind of labor. The small factories are operated mostly by families men, women, and children. The pay for the best workmen in the large factories is 24 francs per day of from 12 to 15 hours, as the requirements of the business demand. Only one-third of the work is done by able-bodied men; the other two-thirds is done by women and children, whose pay averages 1 franc per day of 12 or 15 hours. These are facts that can be corroborated by the American consuls in Naples, Genoa, Lyons, or Marseille. As against these wages we pay our best workmen $2.75 per day of 84 hours, and ordinary workmen $2.25 per day of 8 hours. We do not employ women and the law does not permit us to employ boys under 14. If the small protection that has been afforded us is taken away, how can we compete with the foreign manufacturers? The statement is often made that the imported paste is far superior to the domestic and, therefore, that we are not in direct competition with the imported article, because the people that want good macaroni must have the imported. This assertion is not true at this time. It was true years ago, when this line of business was almost exclusively in the hands of ignorant people of small means. Now the United States can boast of possessing factories that are models in the use of fine machinery, perfect in cleanliness, and managed by scientific men, who make a study of the properties required in the flour for the production of the best article and who do turn out as good an article as any made in France or Italy. If we were not so greatly handicapped in the matter of wages we would have no fear of competing with the foreigners in their own country. In connection with this it may be proper to state that the Agricultural Department has distributed among many farmers of the Middle West durum wheat to be planted especially in arid lands. Durum wheat is in reality macaroni wheat. It is very hard and contains a large amount of gluten and is used almost exclusively in the manufacture of macaroni flour or semolina. It would place the Government in an anomalous position for one department to encourage the planting of wheat for macaroni and another department to discourage the same by admitting free products made from the same quality of wheat in another country-building up an industry and destroying its market. This industry is young, but rapidly growing. The government should encourage and protect it. It helps the farmer, the miller, the lumber manufacturer, the paper manufacturer, the tin manufacturer, etc., besides giving employment to thousands. The only item in our favor in competing with the importer is the item of freight, which is now a small item and is offset by far by the low cost of manufacture. We hope to have presented our case clearly, but if any member of your honorable body requires any further information on the subject, we shall be prompt in giving it, if within our power to do so. Hoping you will grant our petition and by your vote and influence have the present duty remain, we are, Gratefully, yours, C. R. SPLIVALO & Co. BRIEF OF THE NATIONAL ASSOCIATION OF MACARONI AND NOODLE MANUFACTURERS OF AMERICA. The COMMITTEE ON WAYS AND MEANS, JERSEY CITY, N. J., January 16, 1913. House of Representatives, Washington, D. C. HONORABLE GENTLEMEN: As a committee representing the National Macaroni Manufacturers' Association of America, and voicing the sentiments of all other manufacturers with large capital invested throughout the country, we earnestly request your support in at least upholding the present rate of duty on macaroni, which is 14 cents per pound. For some years prior to 1895 the duty was 2 cents per pound, when the highest importation was 12,804,395 pounds, whereas under the duty of 14 cents per pound the importation showed, in 1910, 118,817,376 pounds. |