PARAGRAPH 295-SALT. I would not want him ruined in his business by free salt, and if you can conclude from your investigation of the matter that this might be the result, I would ask that you hesitate before proposing such action, and would rather have some duty on the article. Respectfully, yours, CHAS. M. GILBERT, STATEMENT SUBMITTED BY THE STERLING SALT CO., OF NEW YORK, RELATIVE TO THE DUTY ON SALT. To the COMMITTEE ON WAYS AND MEANS, Washington, D. C. GENTLEMEN: The mine and salt works of the Sterling Salt Co. are located at Cuylerville, Livingston County, N. Y., about 30 miles south of Rochester, and this statement is respectfully submitted to show that if any reduction is made in the duty on salt that it should only be a very slight reduction. The product of this company is a coarse salt, which is used very extensively for the manufacture of chemicals, for the manufacture of ice cream, the various uses of the packing houses, for salting fish, making brine or pickle for any purpose, and for many other commercial uses. More than two-thirds of our product is shipped into New England, New York, Pennsylvania, Virginia and Maryland; the balance is shipped principally to points in Ohio, Michigan, Illinois, and Indiana, a small amount being shipped by Lake vessels to Duluth, Milwaukee, St. Paul, etc. Our principal markets east of Buffalo are the large seaboard cities, including Portland, Boston, Providence, New Haven, New York, Philadelphia, Baltimore, and Norfolk, and cities adjacent and tributary to them, such as Salem, Lowell, Lawrence, Springfield, Hartford, Yonkers, Newark, Trenton, Wilmington, Richmond, and Washington. The imported salts which compete most directly with our product are the coarse solar grades shipped from the West Indies and from the Mediterranean ports of Italy, Spain, and Portugal. In both of these sections cheap negro or native labor is employed, and the hot tropical climate materially assists to produce a very cheap and satisfactory grade of salt. We do not have the exact figures as to cost of labor at these points, but consular reports and other authorities justify us in stating that it does not exceed 60 or 65 cents per day. The statement which we submitted to the Ways and Means Committee on November 19, 1908, showed that we employed 205 men and that our average wages amounted to $2.03 per day. We are now employing about 250 men and our wage average is $2.14 per day, a considerable part of our force being skilled or semiskilled labor. As labor is the principal expense in mining and preparing salt, the great advantage of the foreign producer is apparent. The supplies entering into our cost of production consist of coal, powder, timber for shaft and mine support and for brattices, rails, ties, engine-room and electrical-equipment supplies, burlaps for packages, etc., all of which have steadily advanced during the past few years. We operate a mine, and our product is produced, broken, screened and prepared by methods very similar to those used in the production of anthracite coal. Our costs, to the best of my knowledge, approximate those of mining anthracite coal, with the exception that a relatively small production increases our interest charges and because salt must be prepared and stored so that it is thoroughly protected from the weather. Our handling, storage, and shipping expenses are somewhat in excess of those on coal The method of manufacture of our foreign competitors is quite different. In the Mediterranean and Caribbean Seas, where their plants are located, the percentage of salt in the sea water is materially greater than off our North Atlantic coast, and the water or brine is evaporated by the dry trade winds and the hot tropical sun, thus producing what is commercially known as solar salt. This salt is most generally sold as coarse or rock salt, but it can be and in former years was very extensively ground and used for the purposes of ordinary domestic salt. Pumping at these foreign points is largely done by windmills and the labor performed by the natives or negroes. It is impossible for us to give you authentic figures on the cost of producing salt at these points, but we have been informed by authority which we believe to be reliable that it is materially less than $1 per ton of 2,000 pounds. The average selling price for export to the United States is about $1.40 per ton, which, considering that the plant or equipment represents a very small outlay, shows the producer a fair profit on the business. PARAGRAPH 295-SALT. A very large part of our product is marketed in the seaboard cities of the North Atlantic. The following table shows the average foreign freight, a fair average cost of foreign salt ex duty, and the freight rate on domestic salt from the nearest point o production to these various ports: We believe that no argument from us is necessary to satisfy the members of your committee that the American producer must get in excess of $2 per ton for his salt at the point of production in order to keep his plant running, and on the assumption that he is to net $2 per ton at his works, his salt will cost $1.80 per ton at Portland, Boston, Providence, and New Haven, $1.40 per ton at New York, Philadelphia, and Baltimore, and $1.50 per ton at Norfolk-more than a fair average cost of foreign coarse salt. We concede that the advantage that foreign salt has at the seacoast gradually diminishes as we reach inland points, but as the manufacturing industries which use a larger part of the salt consumed are located at or near the coast, a reduction in the tariff would very seriously and disastrously affect a large part of our business. The above table shows that $1.40 per ton, or 7 cents per 100 pounds, is reasonably necessary to equalize the advantage that our foreign competitors enjoy. There are no salt works in the United States located at the seaboard or with navigable water connections with the seaboard. In getting our salt to the seaboard the rate per ton-mile exceeds that of our foreign competitors by in some cases 10 to 1, and it does not seem likely that the railroads can reduce their freight rates in view of the constantly increased wages they are paying their employees. A trifling amount of our salt is exported by us into points in Canada adjacent to our point of production. A small amount of salt produced in Louisiana is exported to Cuba, and the records show that some salt from California is exported to Mexico, but the conditions make it impossible for us to export salt in any quantity. On the other hand, our foreign competitors, due in many cases to import duties and in some cases to an absolute prohibition of the importation of salt, enjoy their home market unmolested and ship their surplus to us, selling abroad much cheaper than at home, which principle has, we believe, been criticized and condemned by some of the gentlemen of your committee. For a very complete statement of the conditions with reference to the salt industry, we would respectfully refer you to the briefs submitted in past years to the Ways and Means Committee. Foreign freight rates are at present a little higher than rates mentioned in many of these statements, but this is about offset by the increased wages which the domestic manufacturers are now paying. Aside from these two items, the statements made in previous years to your committee are substantially in accord with the conditions of to-day. These briefs show at considerable length that the ultimate consumer would not likely benefit from a reduction of any part or even the whole of the present duty on salt. If the whole of the present duty was deducted in the case of a 3-pound bag, which is perhaps the size package usually bought by the average household, the cost of the bag would be reduced one-fifth of 1 cent. As the denomination of our money would not permit of making this exact reduction, it is quite evident that no reduction whatever would be made. The Sterling Co. does not, however, produce table salt, and wishing to confine our remarks strictly to our own product would say that a very large percentage of it is sold to the packers, chemical companies, ice cream companies, soap manufacturers, pickle manufacturers, and other large corporations or firms well able to prepare and argue briefs advocating a reduction in the import duty on salt, and the fact that these interests have never made any serious demand for a reduction in the duty indicates quite clearly that they believe they would obtain no appreciable advantage from it. Except in the case of the packing houses and a few other very large buyers, who buy their salt in large lots and transport it largely by vessel, foreign salt does not PARAGRAPH 295-SALT. reach the interior of our country. There are practically no farming communities so located that the farmer would benefit one iota from the removal of the entire duty on salt. We can not but feel that putting salt on the so-called 'farmers' free list," which was introduced some few years ago, was an action taken without due consideration and without the study that would have disclosed the indisputable fact that the producer would suffer and that the farmer would obtain no benefit whatever. You may ask how we can reconcile these two statemetns, but the explanation is quite simple. A commodity as cheap as salt on which the delivery cartage alone amounts almost to the price received by the producer, can not be profitably distributed or delivered except in connection with other articles, and it must properly and of necessity pass through the hands of the salt jobbers and the wholesale and retail grocers. If foreign salt can be landed at a lower price than the domestic producer is now receiving from the salt jobbers, he must meet this price or lose his trade. The jobber may or may not reduce his price, but whether or not the wholesale grocer obtains a lower price, there the reduction is sure to end. A cheap commodity like salt can not be generally distributed by the producer; he must depend upon the wholesale and retail merchants of the country to market his product for him, and while our experience has been that these men make only a reasonable profit on their sales of salt the expense they are put to for handling such a bulky product compels them to charge a price to the ultimate consumer which is anywhere from three to ten times the price received by the producer. Recent legislation, particularly State legislation, has been along lines which has materially increased the cost of production. We may mention one item, liability insurance, the cost of which is just three times what it was in 1908. There is an abundance of salt in this country and it is produced on a commercial basis in at least eight different States. It is found in so many different localities that it would be an impossibility for any group of interests to obtain any monopoly in salt that would exist longer than it would take to develop a new plant. There has never been any general complaint of the cost of the salt, either to the consumer or to the manufacturer using it as one of his supplies. Government statistics show a natural and normal increase in the production of the country, it having increased from 23,849,231 barrels of 280 pounds net (3,338,892 tons) in 1902 to 31,183,968 barrels (4,365,755 tons) in 1911. The value given in 1902 was $5,668,636 (equal to $1.69 per net ton) and the value in 1911 was $8,345,692 (equal to $1.91 per net ton). When the so-called Payne-Aldrich tariff bill was being prepared, public hearings were held by the Committee on Ways and Means on the various schedules. The hearing on salt was called on November 19, 1908. A large number of salt manufacturers were present, and three representatives were selected to appear as witnesses and give full information. No one appeared asking for any reduction in the duty. Subsequently two statements favoring a reduction in the duty were submitted to the Finance Committee of the Senate by Messrs. William A. Hazard & Co., of New York, and C. M. Gilbert, of Savannah, Ga. I would respectfully refer your committee to Messrs. Hazard & Co.'s statement, which, though arguing in favor of a reduction, showed conclusively that the domestic producer could not profitably compete without some duty, and this paper advocated cents per 100 pounds on the coarse or rock salt and 4 cents per 100 pounds on salt evaporated by artificial heat; bags, burlaps, or other coverings to pay the same duty as if imported separately. The purport of Mr. Gilbert's statement seemed to be to show that the duty then collected, of $1.60 per ton, on salt in bulk is equivalent to an ad valorem rate of 901 per cent. As already explained in this paper, practically no salt is consumed at the point of production, and the freight averages about as much as the cost of the salt. It is somewhat misleading to figure the percentage on a cost that the public has practically no knowledge of, and if figured on a fair average cost at the principal points of consumption, 7 cents per 100 pounds would equal an ad valorem rate of about 35 per cent. In 1909 the duty on salt in bulk was reduced from 8 to 7 cents per 100 pounds, a reduction of 12 per cent. To sum up, our reasons for asking for a retention of the duty on salt are First. That the rate of wages at the point of production of competing foreign coarse salt averages about 60 cents per day as compared with our average of $2.14 per day. Second. That the natural advantages that our foreign competitors have for evaporating sea water by the hot tropical sun and dry trade winds more than offsets the advantages which we derive from the use of modern high-priced machinery. Third. That the relatively low ocean freight rates enable our foreign competitors to transport their product several thousand miles and land it at any point on our coast PARAGRAPH 295-SALT. at a materially lower transportation charge than we have to pay the railroads for transporting it several hundred miles to these same points. Fourth. Foreign coarse salt has an advantage in cost and freight of at least $1.50 per ton or 74 cents per 100 pounds at all of our coast points. Fifth. That a material reduction in the duty on salt would work great hardships upon all of the salt producers located in States bordering on the Atlantic Ocean or the Gulf of Mexico and would in no way benefit the public. Respectfully submitted. STERLING SALT Co., By EDWARD W. BROWN, Vice President. 29 BROADWAY, NEW YORK, January 17, 1913. BRIEF PRESENTED ON BEHALF OF THE MANUFACTURERS OF SOLAR SALT, IN THE COUNTY OF ONONDAGA, N. Y. The COMMITTEE ON WAYS AND MEANS, House of Representatives. GENTLEMEN: The manufacture of solar salt in the county of Onondaga is one of the older industries of the State of New York. The process of manufacture, as here conducted, consists of the pumping of the salt brine from the earth, when it is conducted through pipe lines to shallow wooden rooms or vats, where, as the salt precipitates, it is cultivated and, upon a crop being deposited, drawn to storehouses, screened, and graded, it then being ready for shipment. The salt fields or yards are located adjacent to and partly within the city of Syracuse and cover considerable territory. The vats or rooms are covered with movable wooden covers. The extent of the yards and the nature of the material necessary for the evaporation of the salt necessarily entails considerable expenses in their upkeep, amounting in an average year of production to about 30 cents per ton of the salt manufactured. Labor (unskilled) is paid $1.75 per day, and the labor cost, depending upon the production, amounts to from $1.55 to $1.67 per ton of 2,000 pounds of the salt manufactured. There is a fixed charge of 35.71 cents per ton of 2,000 pounds for furnishing and distributing the salt brine paid to pipe-line companies. The drawing in and other teaming amounts to from 18 to 22 cents per ton. The other expenses incident to the businesshardware, supplies, taxes, insurance, and selling expenses-bring the cost per ton (of 2,000 pounds) to about $2.80. Solar salt is sold mainly in the East, one of the principal markets being New York City. Freights by canal from Syracuse to New York are from $1.10 to $1.20 per ton and by rail, $2 per ton. Rail to Boston, $2.60 per ton, and corresponding rates to other eastern and southern points. Thus a ton of salt laid down in New York City would cost the manufacturer, if by water, from $3.90 to $4 per ton, and if by rail, $4.80 per ton, and $5.40 per ton laid down in Boston. Like other bulky products, the question of the storage of salt enters into the question of shipments, hence about 75 per cent of the product is shipped by rail. Canal shipments are limited to from May to November. The foreign imported salt, with which we compete, is produced in the West Indies and in the countries bordering upon the Mediterranean, and is made almost entirely from sea water, and by labor paid about one-third the prices paid by us. It is made directly upon the sea coast, hence there is no expense for shipment by rail. Such saltthe imported solar-is delivered in New York, Boston, and other coast cities, at from $2.75 to $3 per ton (2,000 pounds), duty unpaid. Adding the duty of 6 cents per hundred pounds, or $1.20 per net ton, would make the imported salt cost the importer from $3.95 to $4.20 per ton. Salt if imported in bulk, which is mainly brought in by sailing vessels, must necessarily be in considerable quantities at each shipment; hence the storage facilities to which we have referred give the local manufacturers a slight advantage, in their being able to ship in carload lots. It will thus be readily perceived that the manufacturers of solar salt could not compete with the foreign manufacturers without the protection of the duty of 6 cents per hundred pounds. Again the western-bound rates, both by canal and rail, are less than the east bound. Therefore, without the duty the foreign manufacturers could send their salt considerable distances inland and sell the same for less than the cost of production to the producers of this country. Solar salt is used in the manufacture of chemicals, packing and preserving meats, curing hides, the making and packing of ice cream, melting snow, dissolved and PARAGRAPH 295-SALT. used for pickle, and for other purposes. When used for any such purposes its relative cost is so small that it does not enter into the price of the product paid by the ultimate consumer. There is produced in the United States (in upward of 15 States) annually about 6,000,000,000 pounds of salt of all kinds and for all purposes. The annual consumption of salt for all purposes is about 70 pounds per capita, and for domestic purposes alone, between 13 and 15 pounds per capita. So that the cost of salt to the ultimate consumer, based upon the manufacturer's price of about $3 per ton, is an exceedingly small item. And even should the ultimate consumer reap the benefit of the amount of the duty, which he would not in any event, the amount based upon domestic consumption would be less than 1 cent per capita per annum. Appreciating the fact that even should the duty upon salt be removed, they would not be benefited thereby, it will be found that there is no demand upon the part of the users of salt for the removal or reduction of the duty. The demand, if any, will come from the importer and the representatives of the foreign producers. Salt for domestic purposes must be put up in packages. These packages, bags, and barrels, and the packing, form a considerable element of cost. For instance, a bushel of salt (56 pounds), worth about 8 cents at manufacturers' prices, costs for bagging and packing about 6 cents. And a barrel to contain 5 bushels of salt (280 pounds), worth at manufacturers' prices about 40 cents, costs about 33 cents. These, together with the expense of transportation, including draying, handling, storing, insurance, commissions, and as well the profits of the wholesale and retail dealer, enter so largely into the cost to the ultimate consumer that the price of the salt itself forms but a very small element. A reduction of the price of salt of 40 cents per ton, or even less, by a remission or reduction of the duty, would drive from the market the manufacturers of this county, compel them to cease business, and the immediate benefit to the consumer (or rather the dealer) would be less than 1 cent per capita per annum, with the strong probability that upon our being driven from the markets, the price of the foreign article would be materially increased. The nature of the erections for the conduct of the manufacture of salt are such that the discontinuance of the business for even one year would render them entirely useless for such purpose. Taking off the duty of $1.20 per ton would by no means bring about the reduction of the prices of salt to that amount, unless it would be necessary for the importers to do so to obtain er ́ire control of the markets. The prices would be reduced (temporarily) only to the extent necessary to control the markets. It must be evident by reason of the prices of salt now prevailing that there is now here in the United States great competition among the manufacturers of salt. Such is the fact. Solar salt competes directly with both the mined and fine salt, both of which are used for the same purposes as the solar salt. The amount of salt produced in Onondaga County, about 70,000 net tons per annum, while not large in comparison with the total Nation's production, has in times past and now does form a considerable element in the maintenance of the present low prices. With the vast deposits of salt throughout the country, distributed over the various sections, North, South, East, and West, there never can be a monopoly. To place salt on the free list, or to even reduce the duty upon it, would mean the extinction of the business of its manufacture in this county, with consequent loss of employment by numerous people directly engaged in the industry, and as well the loss of a market for the various materials and appliances used in the business. In addition rendering valueless the extensive salt plants and erections, and exterminating an industry maintained for over a hundred years, one that has contributed much, not only to the material prosperity of the city of Syracuse, but to the State of New York. We therefore respectfully request that the present duty upon salt be maintained. Respectfully, W. G. CADY, 609 West Onondaga Street, Syracuse, N. Y. (For the solar salt manufacturers of the county of Onondaga, N. Y.) SYRACUSE, N. Y., January 18, 1913. |