PARAGRAPH 277-LEMONS. A box of lemons in Italy is estimated at 42 kilos (92.6 pounds), making the rate per box 5.9 to 6.5 cents per box. The cost of unloading the car in Palermo varies from 2 to 3 lire (38.6 to 57.9 cents), or at the rate of about one-sixth of a cent per box. The cost of hauling from the car to the packing house in Palermo varies from eight-tenths to 1 cent per box, making a total cost of delivery of about 6.8 to 7.6 cents per box. The cost of delivering the fruit to the packing house varies from 3 to 13 cents where the fruit is hauled out of the grove on muleback, making an average cost of 6 to 8 cents per box. Packing of fruit for export-The final packing of the fruit is done in the packing houses of the exporters in Palermo, or other ports of export. The packing houses are located in the business part of the cities near the water front. The house is frequently the ground floor of a dwelling; or the box making and repairing, the receiving and shipping rooms, and the packing room may occupy the entire structure. There is little equipment in an Italian packing house. All the labor is performed by hand and from one-half to three-fourths of the labor is performed by women and children. The only equipment of note is the rows of benches into which the fruit is graded and the baskets used in grading and carrying the fruit in the packing house. The packing operation consists in unpacking the fruit as it comes from the groves, regrading, wrapping, packing the lemons into boxes and nailing on the covers and hoops. The packed boxes are then carted to the wharf, lightered in small boats to the steamer which is anchored a short distance away, and are loaded in the vessel that carries them to their destination. In the packing operations, the labor is usually divided into crews, consisting of one foreman, one woman sorter, three women wrappers, one boy to hand the fruit to one man packer, and one nailer to every four packers. In one large house where the operations were studied in detail, the wages paid in May, 1911, were: Women, 1 lire each; boys, 2 lire; packers, 4 lire; nailer, 34 lire; and foreman, 4 lire per day. The wages paid to the different kinds of packing-house labor in Palermo, 1911, is as follows: TABLE XXV.-Wages paid in a packing house in Palermo. The working hours are from 7 a. m. to 11 a. m. and from 12 noon to 5 p. m. Cost of packing fruit for export.-During 1911, the exporters in Palermo were invoicing the costs of the packing operations about as follows: Empty boxes of American sides, tops and bottoms, 80 centimes (15.4 cents); foreign grown boxes 85 centimes (16.4 cents); the cost of packing which includes labor of all kinds, nails, paper, tinsel, etc., from 50 to 60 centimes (9.65 to 11.58 cents), the usual invoice being about 55 centimes (10.6 cents); the transportation from the packing-house to the lighter from 0.25 to 0.45 lire (4.8 to 8.7 cents) and the cost of lightering from 0.04 to 0.32 lire (8 mills to 6.2 cents) the usual lighterage charge being 0.10 lire (1.9 cents). According to the invoices of the exporters, the average cost of the packing-house expenses from the time the fruit reaches the packing house till it is placed on the steamer is about 35 cents per box. Some of the exporters add insurance to the invoice amounting to about 0.5 centimes (9.6 mills). There is a charge also of 13 lire per invoice ($2.51) made by the consular agency, which adds from a small fraction of a cent to a cent and a half or more per box. Including the consular invoice, the insurance and the packing and transportation to the steamer, the cost per box varies from 36 to 42 cents per box, with an occasional higher cost for fruit handled under unusual conditions. TOTAL COST OF PRODUCING AND HANDLING LEMONS IN ITALY. From the foregoing data it will be seen that the costs of producing lemons in Italy may vary approximately as follows: PARAGRAPH 277-LEMONS. TABLE XXVI.—The average cost of producing lemons in Italy. Based on the cost of production, the f. o. b. value of a box of Italian lemons is approximately $0.91. There is no way in which the cost of producing the higher grades that are exported to foreign countries can be separated from the average cost given above because all grades are produced simultaneously on the same trees, and for at least 80 per cent of the crop all grades are purchased from the producer at the same price. The exporters place an f. o. b. value on the fruit exported, though this value bears no relation to the cost of production and may bear no relation to the cost of the fruit to the exporter, except in such cases where he purchases only the higher grades for export. The values of the fruit exported from Italy from 1897 to 1908 as given by the Italian Government varies from $0.515 to $0.772 per box for the fruit to which $0.39 per box should be added for packing charges and loading on the steamer. The f. o. b. value, i. e., the price which the exporter is willing to receive, as given by the exporters on their invoices has varied from 1903 to 1911, from a maximum of $2.11 per box in 1907 to a minimum of $1.38 per box in 1910 (page 23) the year following the passage of the Payne-Aldrich Act. The duty that the exporter would have to pay if all the fruit arrived in sound condition based on the average weight of 72.9 pounds per box is $1.09, but the refunds for decay during 1909 and 1910 were approximately 10 per cent of the duty paid, making an actual duty paid of approximately $1 per box. The duty paid on the boxes has not averaged over 4 cents during the last 10 years. The costs that are chargeable against a box of Italian lemons after arrival in New York, including the selling charges, are approximately as follows: TABLE XXVII.—The charges against a box of imported lemons on arrival in New York. Wharfage, after fifth day, one-third cent per box. Importers are required to deposit 2 cents Marine fire insurance generally covers original cost of fruit f. o. b. Sicily, freight, duty, and Banking commission-One per cent on cost of fruit f. o. b. port of export; equals about.. Labor on dock, covering lining up of fruit, opening up of samples for lot, fixed charge per box.. Rebate 2d. on all lots for tariff fund. Rebate 3d. in addition all lots of 1,000 boxes or over... $1.095 .04 .003 .0075 .016 0.075-.08 .02 .344 .04 .06 ADDITIONAL BRIEF ON LEMON SCHEDule. The Citrus Protective League herewith offers a reply to certain erroneous statements and conclusions contained in the brief of the Italian Chamber of Commerce of New York, not heretofore having had opportunity to do so: Cost of production in Italy.-Attention is called to pages 5 and 6 of the brief of the Italian Chamber of Commerce referring to cost of production, and attention is called to the apparent errors shown on these pages. The cultural cost as stated is $96 per acre, which is $6 higher than is shown by the investigation of Mr. Powell. The production is there shown as 270 boxes per acre, which is 30 boxes less than shown by Mr. Powell, which results in a per box cost of 35 cents against 30 cents a box, shown by Mr. Powell. The picking cost is stated at 12 cents a box, which Mr. Powell does not give separately. The next item of taxes is not a cultural cost, and is not included 78959°-VOL 3-13- -61 PARAGRAPH 277-LEMONS. in the California cost. The next item of superintendence-$20 an acre is not a cultural cost and is not given the California costs, and can not be correct in view of the character of the industry in Italy, which is conceded to be in the form of small gardens where the work is done by the owner. The next item under the head of returns shows $1.16 per box. This is not a cultural cost, but the price at which the product is sold, which includes profits. By turning to page 6 it will be observed that instead of carrying the actual cost of 35 per box the selling price of $1.16 per box is assumed as the cost of production. The items of handling the fruit from the orchard to the ship is stated as first, grading at grove, 5 cents; cartage from grove to warehouse, 8 cents; repacking at ship port, 45 cents; which makes a total cost of handling from orchard to ship of 70 cents per box as against the figure of 61 cents shown by Mr. Powell's investigation, or a total cost of production and handling to the ship of $1.05 against Mr. Powell's figures of 91 cents. The further items given on page 6 of loss of culls in grading is manifestly incorrect, as the culls are used in by-products, and are not lost. The further items in this tabulation refer to cost in transit and in New York, which are not properly items of production cost. According to these figures when correctly stated, showing cost of a box of lemons in Sicilian ports to be $1.054 as against the cost in California of $1.88%, or a difference in cost of 73 cents per box, which equals approximately 1 cent a pound. The cost to the importer is evidently an improper method of comparison in fixing a tariff, for such price includes the profits to the grower and middleman in Sicily not based upon free competition but on an arbitrary price fixed by governmental monopoly. To assume such a basis gives the foreign importers complete power to destroy a domestic industry and fix an arbitrary price to the American consumer. Second. Reference has been made to the recent disastrous freeze in California as a reason why the duty should be reduced. This is said by the weather observers to be the first general freeze during a period of 60 years, and therefore can not be taken to be a valid reason why the California climatic conditions are unsuited to a development of the industry. The effect of the freeze will undoubtedly be to discourage the producers, and it would not seem to be good policy to further add to their discouragement. The effect of the California product in securing reasonable prices to the consumer is reflected in the markets following this freeze, and shows what the price of lemons would be if it were not for the California production. To show the effect this freeze has on lemon prices, we call the attention of the committee to the Fruitman's Guide, January 18, page 4, wherein it is said: "The big surprise of the week was shown at the Sicily lemon auction on Tuesday. All previous winter lemon-price records were smashed. This was due in large measure to the certainty that California lemons will cut no figure in the campaign this year. Not even the oldest broker in the business can recall a time when lemons sold so high as recorded this week in the month of January. Everything was taken greedily. The market opened about $1.50 a box higher than the last sale and climbed swiftly and steadily. The average advance over the last sale was more than $2 a box. In some instances identical brands showed a rise of more than $2.50 a box. * * Third. It was erroneously stated by a member of this committee that the wages paid for picking California lemons was in some instances as low as $1.25 per day. The member was doubtless misinformed while in California, or his informant neglected to state that this wage included board, for there are no wages in the citrus industry as low as $1.25 per day. Most women and girls in packing houses receive from $2 to $3 per day, and thousands of women are making a good living amidst clean and pleasant surroundings and light work who would otherwise have difficulty in maintaining themselves, while the lowest wage paid field labor in California is $1.75 per day. The minimum wages paid to white labor is $2 a day, and from that to $2.50 a day, and we beg to submit the following affidavit from growers who are fully acquainted with the situation. A. F. CALL. CITY OF WASHINGTON, District of Columbia, ss: C. C. TEAGUE. A. F. Call, C. C. Teague, H. B. Chase, being duly sworn, depose any say, and each for himself says that he is a grower and shipper of lemons from California and is a large employer of labor and is thoroughly familiar with labor conditions throughout the citrus belt of California; that the lowest wage paid to field labor, including picking, is $1.75 per day; that the ordinary wage paid to American white labor is from $2 to $2.50 per day. That Oriental and Mexican labor commands a less price than white labor; PARAGRAPH 277-LEMONS. that the price of white labor has advanced during the last four years; that the wages paid to women in packing houses has advanced during the last four years; that this advance has been sufficient to give to American labor, both men and women engaged in the citrus production in California, its share of the increased tariff granted by Congress under the Payne-Aldrich bill. A. F. CALL. Subscribed and sworn to before me this 21st day of January, 1913. To the honorable members of the Ways and Means Committee of the House of Representatives. This chamber of commerce, in accordance with recommendations heretofore made on the revision of the tariff act of August 5, 1909, desires to submit to your committee the following statements in reference to the present duty on lemons and the necessity of placing them on the free list: Lemons, in their manifold uses, are generally recognized as an indispensable household necessity, necessary to health and comfortable existence. The juice of the lemon is highly refreshing and antiscorbutic, and the basis of many thirst-quenching beverages, for there is nothing that surpasses a lemonade made with the actual fruit and not from many wily substitutes often imposed upon consumers. The salutary virtues of the juice of this fruit, especially in warm weather and warm climates, are universally recognized. Owing to the importance that the consumption of this fruit has acquired in all civilized countries many of them admit it free of duty, so as to bring it within easy reach of the consumer. This is the case in the United Kingdom, Germany, AustriaHungary, Switzerland, Servia, the Argentine Republic, and, right at our doors, Canada, while in the countries where lemons are subject to duty the rate imposed is generally either only a nominal rate, as in the case of Roumania (10 cents per 220 pounds), or a small rate, as in the case of France and Bulgaria, where it is less than one-half cent per pound. It is only the United States which maintains on this commodity the highest tariff of any nation-1 cents per pound, plus the duty on shooks, taxing lemons at $1.18 per box, or one-third of 1 cent per lemon, as if lemons were a luxury and not a necessity. The most important source of supply for this commodity is Italy, or to be more precise, Sicily. The exportation of lemons from Italy is the object of a world-wide commerce, which has almost steadily increased during the last decade with all countries except the United States. The consumption of lemons in the United States is supplied from two sources: Italy, with boxes, 1,711,500 in 1912, against 2,485,500 supplied in 1907, and California, which shipped last year 2,003,000 boxes, against 1,097,300 in 1907. Roughly speaking, it may be stated that the annual consumption of lemons in the United States averages about 4,000,000 boxes, one-half of which are supplied by California and the other half by Italy. It will easily be seen that notwithstanding the conditions regarding the supply of the consumption in the United States, Sicily remains the dominant factor in the lemon supply of the world's markets. This is an important condition in its bearing upon the great variation in prices caused by competition on all the markets throughout the world requiring this fruit. The setting out of new groves proceeds in California remarkably slow, and, judging for the future from the experience of the past, it would require, under the most favorable circumstances, at least another 15 years for California to produce this commodity in a quantity approaching the requirements of domestic demand. Meanwhile, she would have the consumers of the United States continue to pay the exorbitant duty of $1.18 per box, and cause them to pay the high prices stimulated by the high tariff, as foreign competition will be nullified. The anxiety of California to secure the continuation of the supply of this commodity grown in this country, which was one of the pleas by which she obtained, and endeavors PARAGRAPH 277-LEMONS. to maintain, the present exorbitant rate on lemons, is not entirely disinterested, and is wholly misplaced, considering that while California could not, even in 15 years from now, place herself in a position to supply the needs of domestic consumption, she intentionally overlooks the fact that Sicily can far better secure the continuation of the supply than could California, as shown from the present status of the lemon industry in that State. Allowing for the greater supply required through the increase of population and for eventual shortage of crops or loss by frost, an eventuality anything but rare in that State, as witnessed even recently by the loss of most of the 1913 crop, it may be assumed with reasonable certainty that California would not in 15 years from now be able to wholly supply the requirements of domestic consumption. Even allowing the hypothesis that she were able to do so in a somewhat longer period, say in 20 or 25 years, would it be advisable to hand over to the interests of a small section of one State the entire control of the market of this commodity, and to deprive the consumer of the benefits derived from foreign supply, both in quality and price? The notable increase of duty on lemons was secured by California at the last revision of the tariff, through incorrect information regarding the lemon industry in Italy, information that was at that time at least 10 years old. Conditions had notably changed during that lapse of time. Lemon growing in Sicily has become much more expensive, through many reasons The cost of labor has almost doubled itself, owing to the influence of the chambers of labor, not only in raising wages, but also in reducing the hours. Emigration, besides increasing the cost of labor, has developed a scarcity. The groves are old, and the land has been exhausted through continuous cropping under the same culture, so that heavy fertilization is required, which increases notably the cost of production, and reduces to a minimum the returns. The old trees are more liable to disease, requiring the application of fungicides, which further adds to the cost of production, while production is gradually reduced after a certain age is reached. The long and hot summers, with no rainfall to speak of, render irrigation indispensable, and water has to be supplied to the trees every 15 days from May to October. Few are the groves, located in valleys, which enjoy the benefit of cheap water from the old wells; the greatest number are located on plains, or on hillsides, where expensive work of piping for the distribution of water and for drilling deep wells (sometimes even 200 feet deep) is required, together with machinery for raising the water. The yield from the oldest groves, as well as from those planted in heavy soils, has diminished. Many of the groves are not provided with roads, and transportation has to be done by means of loading on the back of mules for all materials handled, from fertilizers to fruit. The groves are often damaged by heavy winds, which throw down the fruit, and turn into a loss what would otherwise be a profit. Heavy taxation, national, provincial, and municipal, which hangs as a millstone about the necks of the growers, reduces further the profits of this culture, which used to be more remunerative in the past. The cost of land varies considerably, according to location and irrigation advantages, being estimated at about $400 per acre, unplanted. The cost of setting out the groves, working the land, raising the trees, and keeping up cultivation to bring the grove to normal production is estimated at $800 per acre and more for groves located on the hillsides, which require masonry work to terrace the land and piping to distribute the water. An acre of lemon grove contains from 170 to 180 trees, and the cost of hoeing, fertilization, irrigation, and pruning averages yearly about $96 per acre. Picking the fruit costs about 12 cents per box, and as the average yield per acre is 270 boxes, 40 per cent of which is suitable for exportation to America, selling on the tree on the average at about $1.16 per box, the account of outlays and income will be as follows: |