PARAGRAPH 237-MACARONI. Owing to competition with the foreign product it has been impossible to make any progress in the business under the present rate of duty, and we know of no American plant that is on a dividend-paying basis. To still better illustrate the precarious state of this industry, we herewith attach a list of over 150 factories that we know have been obliged to discontinue the business in the last seven years. It is a well-known fact that there is an existing prejudice in favor of imported goods in our line, and the tariffs in force since 1895 have proved inadequate to protect American manufacturers so that they could produce goods on a profitable basis, and to further illustrate this fact we respectfully call attention to the steady increase of importations from Italy, as follows: 1903-1904, 36 per cent; 1903-1905, 83 per cent; 1903-1906, 156 per cent; 1903-1907, 192 per cent; 1903-1908, 225 per cent; 1903-1909, 280 per cent; 1903-1910, 300 per cent. Italy is shipping into the United States 80 per cent of her macaroni exports, the difference, 20 per cent, is distributed over the balance of the world. Why should these conditions exist? Notwithstanding the fact that the United States is one of the greatest producing countries in the world, we know of no record that shows that any American macaroni manufacturer has been able to ship his product to Europe. The imported macaroni is sold in this country to the consumer at the same price as in Italy, and this is made possible by the bounty under guise of a drawback allowed by the Italian Government. See extract from Daily Consular and Trade Report, No. 3449, April 7, 1909, page 3, as follows: "Italy, in the years 1906, 1907, and 1908 exported to the United States, according to Italian statistics, an annual average of 88,000,000 pounds of macaroni (this represents four-fifths of all the macaroni shipped from Italy), which yielded the United States $1,300,000 in revenue; the Italian Government paid to the Italian miller (eight-tenths of the macaroni manufacturers are millers) about $760,000 in cash as an inducement to export it." This shows, without a shadow of doubt, that the drawback bounty, which the Italian manufacturers secure from their Government, is the Italian manufacturers' profit and permits them to sell at or below cost. Furthermore, the foreign manufacturers ship to the United States all surplus stock on consignment, which is sold many times at a loss. About 50 per cent of the macaroni sent to the United States is on this basis. There is a great difference in the cost of labor in Italy, one franc being equal in purchasing power to the American dollar, and the cost of the raw material in Italy is far below the cost in this country. A further fact to be considered is that the climate in Italy permits open-air drying, which is obviously far less expensive than the indoor methods necessarily used in this country. The cost of labor is fully 663 per cent in favor of the foreign manufacturer. In addition to this, a day's work in this country is but 9 hours, as against 12 to 14 hours per day for the foreign manufacturers, showing an increase in working hours of 33 to 50 per cent in favor of the manufacturers abroad. They have a further advantage in that they do employ women and children at very low wages. Through the efforts of the Department of Agriculture in educating the American farmer in the raising of durum wheat, it is possible for American macaroni manufacturers to produce a quality equal to that manufactured abroad. The necessity of maintaining at least the present rate of duty is one that affects the laborer, the farmer, the miller, and affiliated industries, is of great importance, and should receive careful and judicious thought; and if the country is seeking a tariff for revenue and not to protect profits, the cause of our industry deserves consideration. In preparing this brief we are appealing to you to help an American industry which is yet in its infancy and which at the present time is most seriously menaced. With assurances of our high regard, we remain, Respectfully, THE NATIONAL ASSOCIATION OF MACARONI MFRS. OF AMERICA, FREDERICK E. RUHLING, Secretary to Committee. Committee: C. F. Mueller, of C. F. Mueller Co., Jersey City, N. J.; Frank L. Zerega, of Zerega Co., Chicago, Ill.; John P. Zerega, of A. Zerega Sons, Brooklyn, N. Y.; John A. Anger, of Anger Baking Co., New York; F. E. Ruhling, of Anger Baking Co., New York; S. S. Savarese, of Savarese Macaroni Co., Brooklyn, N. Y. PARAGRAPH 237-MACARONI. List of macaroni and noodle factories out of business since July 1, 1905—Continued. PARAGRAPH 237-MACARONI. List of macaroni and noodle factories out of business since July 1, 1905—Continued. STATEMENT BY AMERICAN MACARONI CO., CAMDEN, N. J. Hon. WILLIAM J. BROWNING, House of Representatives, Washington, D. C. CAMDEN, N. J., January 13, 1913. DEAR SIR: We are advised that on Monday, January 20, the Ways and Means Committee will hold a hearing on Schedule G, agricultural products and provisions. In all probability there will be an attempt to reduce the tariff on macaroni. Any reduction in the present tariff means the closing of the macaroni factories which are now in operation and the consequent loss of a large part of the many millions of dollars now invested in manufacturing macaroni, and the absolute crippling of all new plants now under construction. The United States Government introduced into this country at a vast expense the durum wheat, which is used almost entirely by manufacturers of macaroni or similar products. With the reduced tariff on macaroni or kindred products the American consumption of durum flour is gone. We urge you to oppose any downward change in tariff on macaroni products as the percentage of profit is now so small that a downward revision means the flooding of our markets with foreign-made goods at a price which will render any competition impossible. Very respectfully, yours, AMERICAN MACARONI CO., SUNDRY STATEMENTS CONCERNING MACARONI. GUANO & RAGGIO, Philadelphia, January 13, 1913. Hon. WM. REYBURN, United States Congress, Washington, D. C. DEAR SIR: We are informed that actually the fate of the macaroni industry will be decided next Monday (January 20), with the probable tariff cut-off to appease the popular cry of "high cost of living." As manufacturers we protest strongly against any change, as it would in no way benefit the consumer, being that the wholesalers and retailers are the ones reaping the profits of sometimes 400 per cent. The domestic article is placed on the market at as low a margin of profit as possible, and "no tariff" would result in flooding the American market with the foreign product, which would not only injure the manufacturers, but also all lines used in our trade. Attached herewith hand you status of our business and also a comparison of the cost and hours of labor, here and abroad. PARAGRAPH 237-MACARONI. There are hundreds of macaroni factories in the State of Pennsylvania and thousands in the United States, so we sincerely trust you will see how needy is your cooperation. Advancing thanks, we are, respectfully, yours, Capital..... Machinery (included in capital). Flour used annually.. Wooden boxes used annually. Papers used annually. Twines used annually. Printings used annually. Coal used annually. Machinery repairs annually.. Strawboard cartons used annually. STATUS OF OUR FIRM. GUANO & RAGGIO. Wages and salaries, annually.. COMPARISON OF COST AND HOURS OF LABOR. Foreign labor laws admit children to work from ages of 10 to 16, whereas under our laws they must be over 16. The foreign daily hours are 12 and Sunday forenoon, while our day's work averages 10 hours. American skilled labor is paid from $1.75 to $2.50 per day. Hon. D. R. ANTHONY, Jr., Washington, D. C. GUANO & RAGGIO. THE CONTINENTAL CEREAL Co., MY DEAR MR. ANTHONY: We understand that the Ways and Means Committee of the House of Representatives are holding hearings daily, preliminary to preparing a bill to present to the special session of Congress which President Wilson will call to revise the tariff. Monday, January 20, is set for hearings on Schedule G, agricultural products and provisions, and you know the tendency will be to cut tariffs in this schedule to satisfy the popular cry against the "high cost of living." We want you to protest against a change in tariff on macaroni, which is now 1 cents per pound. The fact that the United States Government has spent vast sums of money in introducing macaroni wheat into this country and that the increased acreage is being sown every year in the arid regions of the West with this wheat, which is used almost absolutely in the manufacture of macaroni, should be a strong argument for you to use with the Ways and Means Committee against making it possible for the foreign products to be admitted upon any more favorable terms than those it now enjoys. Remember that the tariff now is not sufficient to equalize the cost of production at home and that the American product is placed upon the market at as low a margin of profit as is possible, and that the result of "no tariff" or with the reduction of the tariff would be to flood the American market with the foreign product at the expense of the American manufacturer without in any way reducing the price to the consumer, besides making the cost to the Government to introduce durum wheat an enormous waste of money. We are placing in the hands of jobbers our manufactured macaroni at 5 cents per pound in packages and 4 cents per pound in bulk. This goes to the consumer at the rate of 3 pounds for a quarter for the package goods and 4 pounds for a quarter for the bulk goods. You will note at a glance that the above prices to the consumer is a very cheap article of food, and as stated above if there is any further reduction on account of change of tariff it would almost close every macaroni manufactory in this country. Hoping that you will lend your aid to assist us, with the many other macaroni manufacturers, to keep in existence, we are, Yours, very truly, CONTINENTAL CEREAL Co. |