PARAGRAPH 256. PARAGRAPHS 256-257-EGGS. Eggs, not specially provided for in this section, five cents per dozen. PARAGRAPH 257. Eggs, dried, fifteen cents per pound; eggs, yolk of, twenty-five per centum ad valorem; albumen, egg or blood, three cents per pound; dried blood, when soluble, one and one-half cents per pound. EGGS. BRIEF SUBMITTED BY THE JOHN LAYTON CO., NEW YORK CITY. The COMMITTEE ON WAYS AND MEANS, Washington, D. C. NEW YORK, February 1, 1913. GENTLEMEN: We, the John Layton Co., of No. 90 West Street, this city, are incorporated under the laws of New York, and are engaged in the importation and sale of fresh foodstuffs throughout the northeastern part of the United States. Among such products are eggs taken out of the shell and frozen, and frozen egg yolk, egg white or albumen, and mixtures thereof. The merchandise is imported in hermetically sealed cans of 40 pounds capacity. It is prepared by breaking and removing the egg from the shell, placing in the containers, and freezing solid. It is shipped to this country and held in cold storage until sold for consumption to bakers, who buy it in its original container and after thawing out use it in the same manner as shell egg. The bakers prefer this product, owing to its necessarily high quality and purity, to the domestic cold-storage shell egg, which they are obliged to use during a greater part of the year. This merchandise contains no preservative or adulteration whatsoever and is absolutely wholesome. At the ports where we have entered the merchandise, viz, New York, Boston, Philadelphia, it is subjected to inspection and analysis by the Federal pure-food officials and again examined by the local authorities of the various States and cities wherein consumed. In no instance has the quality of our product been questioned. The provision of the act of August 5, 1909, under which our importations are classified are as sollows: Paragraph 256 (mixed frozen egg yolks and whites).-Eggs, not specially provided for in this section, 5 cents per dozen. Paragraph 257 (separated yolks or whites).—Eggs, dried, 15 cents per pound; egg, yolk of, 25 per centum ad valorem; albumen, egg or blood, 3 cents per pound. Our first importation of frozen egg was made in 1909 and was assessed for duty as being similar to egg yolk, at 25 per centum ad valorem. After assessing our entries at this rate for about a year, and after we had contracted heavily for the sale thereof, the customs authorities reclassified all that had been entered and assessed it under paragraph 256 as eggs at 5 cents per dozen. By estimating that 11 eggs were contained in a pound, the number of dozens in a shipment was computed. As our merchandise has a market value at the place of exportation of 5 cents per pound, the duty assessed is practically 100 per cent. This rate is greatly in excess of most rates in the act of 1909 and considerably above the rates applied to foodstuffs. When to this is added insurance, freight, refrigeration, storage, customs charges, cartage, selling expenses, interest on money involved, etc., it is clear that the rate of duty is prohibitive. Such importations as we are making are made to be sold at times when market conditions permit. If the original classification-i. e., the classification upon which we began business, had prevailed, we would have no reason to complain, for we were then able to compete with the price of eggs in this country. Having in our first year, under the 25 per cent classification, become established, we have continued even at a loss to import in varying quantities sufficient to hold our customers, hoping that relief might come through tariff revision. Frozen egg is in this country a staple article of commerce. This is borne out by the engagement therein of large packing interests, who, having facilities for freezing their products, refrigerator cars, and cold stores, are able to put the article upon the market at a minimum cost, and with a duty of practically 100 per cent greatly undersell us. The question may be asked, why use frozen egg? The same question applies to the cold-store shell egg. Hens will not lay the year round. For four months the supply exceeds the demand, and this extra supply must be preserved for the balance of the year as are other frozen products, such as meat, butter, fish, poultry, etc. PARAGRAPHS 256-257-EGGS. That frozen egg was not, at the time of the enactment of the act of 1909, in the mind of Congress in adopting the foregoing phraseology, is evident by lack of a specific provision therefor. It certainly would not provide a "dozens rate" to be assessed upon a frozen or liquid substance. Provision was made, however, for the two parts of an egg, namely, egg yolk and egg albumen. These articles have been long dealt in, being used for tanning, chemical, and other manufacturing purposes. We can not believe that Congress would have enacted a provision exacting 100 per cent duty on frozen egg when it has provided a duty of 3 cents per pound on egg white or albumen and a duty of 25 per certum ad valorem on egg yolk. Egg yolk and egg white go to make up the whole egg, the percentage being 60 per cent yolk and 40 per cent white. The appraised value of egg yolk is under 5 cents per pound at the place of exportation, which, at 25 per centum ad valorem, equals about 14 cents per pound duty. In other words, if an importation arrived, say, of 100 cans consisting of 60 cans of yolks and 40 cans of whites, we would be required to pay for that quantity which represents 100 cans of frozen egg, and dutiable at 5 cents per dozen or pound, a duty of only 2 cents per pound by reason of its being imported separately as yolks and whites. Statistics compiled in connection with the Payne Bill show that with a rate of 3 cents per dozen under the act of 1894, importations of eggs were as follows: While at the rate of 5 cents per dozen under the act of July 24, 1897, importations an average importation for 10 years of 252,400 dozens, valued at $22,550 and netting an annual revenue of $12,620, or a duty nearly 60 per cent ad valorem. The importations may be explained in part in that they consist of duck as well as hen eggs imported by Chinese resident in the United States who live exclusively upon their native products. While in the year ending June 30, 1912, we learn that there were imported 1,098,000 dozens, valued at $150,981, due largely to imports by ourselves, it is infinitesimal when it is considered that the annual egg consumption of the United States is 1,500,000,000 dozens per year, valued at $281, 157, 000. The figures as to annual consumption of eggs in the United States does not include the miscellaneous consumption by householders obtained from the barnyard. In any event the importations during the past year are less than one-fifteenth of 1 per cent of the egg consumption of the country. It can not be said that the lack of importation is due to over supply in the United States. That is evident by our common knowledge of high prices for eggs during the past year as well as the fact that practically no eggs are exported by the United States. It is interesting to note by the last report of the Bureau of Labor that the price of eggs in the past 10 years has advanced 86 per cent. The only shell-egg competition our country can expect must come from Canada. Her supply hardly equals her demand and an attempt to export to this country would find our duty prohibitive. Practically all foreign countries are obliged to import eggs in large quantities, principally from Russia and China, either in frozen or liquid condition. Shell eggs can not be brought from distant points, as it is impossible to keep them at a regulated temperature and the large space they occupy in shipping PARAGRAPH 258-HAY. makes the freight rate too high. They are also fragile and perishable. It is therefore to the frozen and liquid egg that the world must look to for relief at time of lack of supply. The liquid egg is prohibited entry to this country, having been found to contain preservatives not sanctioned by the pure-food authorities. We also feel that to classify our frozen egg as shell egg is unfair in that it has a limited market. These importations should be encouraged, as they put upon the market a necessary and wholesome article that replaces the inferior quality of shell eggs sold to the same trade Therefore, if Congress decides to retain the present rates of duty on shell eggs, egg yolk, egg white or albumen, we ask that a specific provision be inserted for frozen egg removed from the shell, or mixtures of egg yolk, and egg white or albumen, at say 1 cent per pound. This would be more in accord with the combined rates on egg yolk and egg white or albumen, respectively, and will enable us to import and compete with the cold-storage eggs and frozen product of this country, as well as bring to the Government increased revenue. But if Congress decides that the duty on shell eggs, egg yolks, and egg whites or albumen be reduced, we ask that the rate on frozen egg removed from the shell or mixtures of egg yolk and egg white or albumen be given a proportionate reduction or admitted free. This will bring increased revenue or put such products upon a competitive basis. But if Congress decides that shell eggs, egg yolks, and egg whites or albumen be put upon the free list, we ask that frozen eggs removed from the shell, now calssified as "eggs not specially for," frozen egg yolk, frozen egg white or albumen, and mixtures of egg yolk and egg white or albumen also be put upon the free list; and we would further ask that the language inserted in the new act be made so clear that the intent of Congress will be carried out by the customs officials without doubt as to the proper classification of the merchandise. The witness was duly sworn by the chairman. Mr. DONOVAN. Mr. Chairman and gentlemen of the committee, I have prepared a paper advocating the putting of hay and straw on the free list. I am here representing the Coal Merchants' Association of New York City, by A. F. Rice, commissioner; Natural Ice Association of America, by Harold W. Cole, secretary; New York Team Owners' Association, Joseph Orr, president; Retail Dry Goods Association of New York City, by Leslie Graff, secretary; Contractors' Protective Association of New York City, James J. Larkin, president. These associations represent something like 20,000 to 25,000 horses and a consumption of over 100,000 tons of hay and straw per annum. I present a paper given me by these various associations authorizing me to represent them at this hearing: Mr. J. P. Donovan, of 24 Stone Street, New York City, is authorized to advocate the placing of hay and straw on the free list, representing us, the undersigned, as consumers and feeders of hay and straw. PARAGRAPH 258-HAY. This paper was signed by the firms mentioned in the table below: Name. Coal Merchants' Association of New York City, by A. F. Rice, commissioner... The hay crop of the United States amounts to about 70,000,000 tons, according to the last figures of the Department of Agriculture for the crop of 1912. The 1911 crop, a short crop year, was about 50,000,000 tons. The previous five years crops had run something over 60,000,000 tons on the average. The larger production shown for 1912 was due in part to a change in the methods of figuring by the Department of Agriculture. The increase in production of merchantable timothy and clover hay was not as great as these figures for 1912 would indicate. Of this production about 20 per cent only ever leaves the farm. The New England, Middle Atlantic, and Southern States do not produce any surplus hay, but have to draw on the States of Ohio, Michigan, Indiana, Illinois, and Wisconsin, as well as the States west of the Mississippi River for their supplies. Until the great increase of population in the Middle West and the development of large urban centers rivaling in their consumption the cities of Atlantic seaboard, this surplus hay was sufficient to take care of the country's needs without causing violent fluctuations in prices, except in rare instances. The crops of New York and Pennsylvania are almost entirely consumed within these two States, either on the farms or in the cities within the States. Any small surplus goes to New England, which enjoys equality of freight rates with New York City. Under existing conditions the great consuming markets East and South are dependent on hay that has to be hauled by the railroads 500 to 1,200 miles to the markets. The railroads have raised the classification of hay from sixth class to fifth class on account of its great bulk, and there is no prospect of any relief by a reduction in freight charges. The eastern Provinces of Canada, the only section of the North American Continent outside of the United States where timothy, clover, and alfalfa can be raised, produce something like 10,000,000 tons of hay per year on the average, only about one-sixth to oneseventh of the United States crop. Before the recent great development of the Canadian Provinces, both east and west, there was a large surplus of hay each year for export to the United States and Europe, but that surplus has been reduced by the introduction of extensive dairy farming and the large European demand for dairy products. However, there is still some surplus hay in these Provinces that could be brought to our eastern and southern markets by rail and water routes and help reduce the much higher prices the eastern and southern consumer is paying for forage as compared with his PARAGRAPH 258-HAY. competitor in the Central West. The western Provinces of Canada do not produce any hay for export and probably will not, as their lands are devoted to grain production and cattle raising and will continue along these lines for years to come; in fact, these Provinces are buying hay now in eastern Canada. The present duty of $4 per ton on hay was levied not as a revenue measure but purely for protective purposes at a time when hay ruled at prices one-quarter to one-third less than present figures. This duty produces no revenue of consequence, except in years of extreme scarcity and high prices in the United States-a time when the tax is a severe burden on the consuming public. It has been practically a prohibitive duty, as shown by the record of importations during the past five years, depriving one section of the country of a natural source of supply for a commodity almost as essential to its economic existence as bread is to man. Hay is used in the East and South for feeding dairy cows and dairy horses. The milk supply of our large cities is a most important factor in our daily existence, and anything that increases its cost to the great bulk of our city population is certainly against the public interest. Horses are still used and will continue to be used for many generations in city transportation by contractors of both public and private construction, retail and wholesale trucking, and all the highly competitive retail trades. The increase in the cost of food for man has also extended to the animals the human race needs for daily service. The horse is no longer a luxury used by the man of leisure, but a commercial necessity, especially among the poorer class of trades. The cost of trucking is a large item in our commercial centers, and the increased cost of animal food has had much to do with creating the present conditions. The city of New York alone consumes from 1,200 to 1,500 tons of hay per day, and any increase in the cost of feeding horses in this great congested center of population is a most serious proposition. These |