PARAGRAPH 295-SALT. BRIEF OF THE WADSWORTH SALT CO., WADSWORTH, OHIO. Hon. OSCAR W. UNDERWOOD, WASHINGTON, D. C., January 11, 1913. Chairman of the Committee on Ways and Means, House of Representatives. DEAR SIR: I am inclosing herewith a letter from the manager of the Wadsworth Salt Co., and I most respectfully request that you give the same the careful consideration that the subject matter would seem to warrant. Very respectfully, PAUL HOWLAND. Hon. PAUL HOWLAND, Washington, D. C. THE WADSWORTH SALT Co., DEAR SIR: If you should be able to give any time to the matter of the duty on salt, which no doubt will be up before the Committee on Ways and Means this winter, the writer begs to direct your attention to a few conditions which exist, in the salt industry in general, which we would like to have you get before the committee in question, so that it will be at least a matter of record on this subject, and which we trust you will be able to have them give a little time or have examiners make personal examination and give them report of such findings. First. Salt (sodium chloride) is absolutely necessary to support animal life. Second. On account of the natural chemical affinity between salt (sodium chloride) and all forms of iron or steel, the resulting natural depreciation to the buildings and machinery in the salt industry is one of the greatest of any of the many industries of this country, making a very high repair and maintenance cost; the salt plants of this country are to-day an actual proof that this heavy upkeep charge can not be met from the revenue received from the sale of the product of these plants. The proof of this statement is a personal inspection of the plants themselves and a note made of the actual conditions. Third. That salt is being made and sold to-day by the maker at a price too low to make proper returns to the stockholders and to keep the plants in proper repair, to wit, a 280-pound barrel of salt, packed in hardwood barrels, 17-inch head by 284-inch stave, is sold by the maker at 85 cents per barrel f. o. b. cars, makers' plant; the barrel used in packing this salt can not be made for less than 40 cents, being quoted on the Minneapolis market at 44 cents each; this leaves 45 cents for the salt, or less than $3.25 per ton for the salt maker. Or this same grade of salt is packed in 100-pound light weight striped sewed seam grain bags and is sold at 22 cents per bag f. o. b. cars. These bags in large purchases cost from 6 to 7 cents each, depending on the cotton market at time of purchase. This leaves less than $3.25 per ton for the salt maker. Packing in barrels and bags of the above-named sizes is the chief style of packing for the American farmer; for town and city buyers the salt is dried and screened and packed in either paper cartons or cotton muslin sacks from 14 to 14 pounds each. The average style package is either a 4 or a 5 pound sack, where the freight charges are low, or a 3-pound sack where the freight rates are high, both or all of which are to retail to the buyer over the counter of the retail dealer at a nickel. Take, for example, a barrel of 74 pound sacks: the salt maker receives $1.75 for this style package, or 24 cents per sack, while in a barrel of 100 three-pound sacks the salt maker receives $1.90, or 19 cents per sack. In all candor, what the salt industry needs to-day, on account of its importance to human life, is some sort of Government control or guardianship, whereby an industry of such importance should be kept on a basis which would pay a fair return to the money necessary to build and maintain salt plants and keep the price as low to the consumer as such a condition would warrant, thus working no hardship on the consumer and giving the stockholder a fair return for his investment in the industry. The industry needs assistance and attention beyond any question or argument, but such attention and assistance should be something different than a suggested lowering of the rate of duty on foreign salt which is being worked by a party of importers who have no investment in the American salt industry and who have used every effort to keep the American salt industry at such a level that will not allow the American salt maker any other policy but to trade a new dollar for an old one. PARAGRAPH 296-POTATO STARCH. Other Governments have the salt industry pay a part or portion of the expenses of their governments, but in doing so the consumer is asked to pay a price on the salt used to keep the plants in condition for daily service and repair. We feel that the salt industry of this country needs a Congress to pick it up and put it on such a level that is in keeping with the importance of the product. I trust that I may have your assistance in this matter. PARAGRAPH 296. F. W. BOYER, Manager-Treasurer the Wadsworth Salt Co. Starch, made from potatoes, one and one-half cents per pound; all other starch, including all preparations, from whatever substance produced, fit for use as starch, one cent per pound. POTATO STARCH. TESTIMONY OF JOSEPH MORNINGSTAR, OF NEW YORK, N. Y. Mr. Morningstar was sworn by the chairman. Mr. MORNINGSTAR. Mr. Chairman and members of the Committee on Ways and Means, it has always been our contention that the consumers of this country are entitled to the free entry of all starches from whatever base. Starches, though falling under the category of manufactured merchandise, enter into most industries as raw material. The cornstarch industry in this country, with its unlimited supply of corn, is well able, without a protective duty, to hold its own against all foreign invasion. The potato-starch industry in this country, after decades in which it enjoyed abnormal protection, is hardly more advanced than when it first started, and the consumers of potato starch are now obliged to pay an exorbitant duty of 14 cents per pound on all such foreign potato starch as is being consumed in this country, with benefit to no one excepting a few primitive starch manufacturers. If there is to be a duty at all on starches, we certainly do not think that the products made under the auspices of coolie labor in the Far East, such as tapioca, cassava, and sago, should have free entry into this country when the starches of the sturdy German and Dutch farmers are taxed 1 cents per pound. Tapioca and cassava flour and starches, as also sago, should be taxed equally with all other starches coming into this country. It should be borne in mind that the labor entering into this manufacture of starch is but a very small percentage of its cost. All dextrines imported are now paying the excessive duty of 11 cents per pound. There is a big group of industries in this country which must have potato dextrine, and since there is no potato-dextrine industry in this country, for the obvious reason that there is no free material from whence to make potato dextrine, it is both unreasonable and unjust to exact 13 cents per pound on something which has become a veritable necessity and which is not procurable in this country. The present duty on glucose and grape sugar is 1 cents per pound. Grape sugar is made by but one concern in this entire country. Domestic glucose, which is made of Indian corn, is selling at time 78959°-VOL 3-13- -66 PARAGRAPH 296-POTATO STARCH. of writing at $1.94 per 100 pounds in open market. This refers to corn glucose at its heaviest—namely, 45° B. A barrel of glucose weighing 600 pounds, at $1.94 per 100 pounds, amounts to $11.64. The present duty of 14 cents per pound on 600 pounds of glucose amounts to $9. This is a fair example of what the present rate of duty signifies. Whereas no potato glucose is manufactured in this country, there is a duty of 1 cents per pound collected on all importations. Your honorable committee should take into account the notorious fact that there is but one universal price for cornstarch and cornstarch products in this country, thanks to prevailing economic conditions. In summing up, we beg to submit for your consideration the following important facts: Tapioca flour and starch, cassava flour and starch, and sago flour, all made under coolie labor conditions, are now free. Potato starch and flour made in highly civilized countries now pay a duty of 14 cents per pound. All other starches of whatever base now pay a duty of 1 cent per pound. Tapioca flour and starch as als cassava flour and starch, are chemically the same as any other starch, and so does sago fall under the category of starches. Why discriminate against starches manufactured under civilized and scientific auspices, in favor of coolie labor starches in the Far East? For the sake of consumers of starch in this country, we recommend that all starches of whatever base, should be admitted free of duty. Mr. LONGWORTH. What is your business? Mr. MORNINGSTAR. Importers and dealers in starches and dextrines in this country. Mr. McCALL. Do you import much starch now under the present duty? Mr. MORNINGSTAR. Not very much. This in all modesty. Mr. MCCALL. Have you any particular preference in factories in Germany? Mr. MORNINGSTAR. Yes, sir; we buy from one concern only in Germany, the largest one of its kind in the world. We handle their product exclusively. Mr. FORDNEY. This "sturdy German" that you are speaking about is really yourself, isn't it? Mr. MORNINGSTAR. No, sir; it is not I at all. I haven't a drop of German blood in my veins, to my regret. Mr. FORDNEY. These things that you state are on the free list are not produced in this country. Is that not why they are on the free list, because they are not produced in this country at all? Mr. MORNINGSTAR. Neither is potato glucose nor potato dextrine produced in this country, and there was cassava grown in this country at one time. Mr. FORDNEY. But the amount produced in this country is very little, and for that reason the article has been on the free list, but PARAGRAPH 296-POTATO STARCH. cornstarch is starch produced in this country, and for that reason there is a duty on it to protect the domestic industry. Mr. MORNINGSTAR. All the time it was being protected we were bringing in more and more goods. Mr. FORDNEY. And the Government got a good revenue from it. Mr. MORNINGSTAR. Yes; if you are in for revenue, this is a good revenue producer. Mr. HARRISON. I notice from the table here $458,000 worth of starch was imported in the year 1912, and during the same year we exported nearly $2,000,000 worth. Mr. MORNINGSTAR. Yes, sir. That shows that we do not need any duty at all on starch. Mr. HARRISON. Where is it made? Mr. MORNINGSTAR. In Maine, and a little was made in New York. Now the potato-starch industry in this country is based more or less upon calamitous crops. When we have poor potatoes, too poor for much of anything else, they make them into starch. Mr. FORDNEY. The starch industry in this country would be greater if we had greater protection from foreign competition, would it not? Mr. MORNINGSTAR. No, sir; the starch industry is rather an intricate business. Some manufacturers substitute the other starches, for instance, tapioca, but it is not as good as potato starch. Mr. HARRISON. The competition that Mr. Fordney mentions is the 2 per cent of imports compared to our native production. Mr. MORNINGSTAR. Yes; but there is a certain percentage of men in this country who would like to establish the business if they could do so without paying the penalty of 14 cents a pound. Mr. FORDNEY. You just said you imported your own production from Germany, didn't you? Mr. MORNINGSTAR. No, sir. Mr. FORDNEY. Then there is some importation, isn't there? Mr. MORNINGSTAR. Yes; there must be until Americans will have arrived at that scientific method of manufacturing starch that prevails abroad. Mr. FORDNEY. You are a foreign producer, aren't you? Mr. MORNINGSTAR. No, sir. I am a dealer in foreign starch, and also in American starch. Mr. FORDNEY. You are like all the importers. I have failed to find an importer that was not a free trader. Mr. MORNINGSTAR. I believe in protection, but I think it should be placed where it belongs, and it does not apply to this industry at all. It has had its fair chance, and it has not flourished under protection. STATEMENT OF MR. WILLIAM A. MARTIN. Potato starch is made from small and partly affected potatoes which are practically valueless for any other purpose. Its use is almost exclusively in cotton mills for sizing and sometimes for finishing. Practically none of it is used for household or laundry purposes, and none of it is exported. The value of the industry to the farmer is that whenever by reason of adverse climatic conditions the quality of the potato crop is impaired, the starch factories utilize a large quantity of undersized and poor potatoes, thereby affording the farmer a market for that part of his crop which would otherwise be of little value. Recognizing this fact, the State of North Dakota at PARAGRAPH 296-POTATO STARCH. one time passed a law paying a bounty of 1 cent per pound for all potato starch made within that State. Even with the present duty, potato starch can not be made at a profit from potatoes costing over 50 cents per barrel, such as are so used being the refuse stock of crops raised primarily for the table. The industry is confined to 70 potato starch factories in the county of Aroostook, Me., and 17 in the two States of Wisconsin and Minnesota, having an approximate value of $10,000 each, or a total investment of $870,000. The following figures are offered as showing the necessity of maintaining the present duty if this industry is to continue. All averages given are based on the past ten years exclusive of 1912, as the figures of that year are not yet available: Total potato starch manufactured past 10 years.. Total value at $0.038 per pound... Total number of starch potatoes used. Paid for same at average price, 45 cents. A ton of potato starch costs the manufacturer: 100 barrels starch potatoes, at 45 cents.. Overhead charges.. Operating expenses...... Total (or $0.0351 per pound)... Average profit last 10 years: Selling price... Cost.... Profit per pound (29 cents per 100 pounds).... Average price of foreign potato starch last 10 years.. Average price domestic potato starch last 10 years.......... Difference (or 10 cents per 100 pounds)...... pounds.. 200, 000, 000 $7,600,000 .barrels.. 10, 000, 000 $4,500,000 $45.00 15.20 10.00 70.20 0.0380 .0351 .0029 0.0240 .0150 .0390 .0380 .0010 It is very evident if the potato starch industry is to be maintained and continue to furnish a market for these otherwise valueless potatoes the present duty must be maintained. We would further suggest that although the total of the above figures seems insignificant, and its value to the farmers of the country as a whole too slight to be of importance, nevertheless, the factories being practically all located in one county of one State, the preservation of the industry is of enormous importance to the farmers of that section. BRIEF SUBMITTED BY BREWER & CO., WORCESTER, MASS. Hon. O. W. UNderwood, WORCESTER, MASS., January 13, 1913. Chairman Committee on Ways and Means, Washington, D. C. DEAR SIR: Referring to the matter of reconsideration of the tariff, particularly section 296, Schedule G, reading as follows: "Starch made from potatoes, 14 cents per pound: all other starch, including all preparations, from whatever substance produced, fit for use as starch, 1 cent per pound." We understand that there is some disposition on the part of the committee to reduce the tariff on potato starch from 14 cents per pound, as above stated, to 1 cent per pound. We do not think that this should be done, for the following reasons: The starch industry in this country has developed naturally, and small factories are placed at centers where raw material is easily obtained. There are some 60 to 70 factories in Maine, costing originally about $10,000 each and calling for an investment of nearly $1,000,000, including the western starch factories. The present potato-starch industry in this country is likely to be wiped out of existence by a further reduction in tariff. We are running a starch factory and, hence, have access to information of the experience of others. |