PARAGRAPH 23-GELATIN, GLUE, ETC.

portion thereof, depend upon that industry for their living. Our people, they say, move around from one place to another, and we never know whether our men are coming back from Saturday night to Monday morning.

Mr. RAINEY. If these new rates are put into effect, do you expect to cut down the wages?

Mr. DELANY. No, sir; not if we can help it.

Mr. RAINEY. Then what you want to have is a cutting down of profits?

Mr. DELANY. They were not very big last year. stand much cutting.

They will not Mr. RAINEY. Have you any objection to stating how large they were? What were your dividends?

Mr. DELANY. We are a partnership. I do not object to stating what my profits were last year. They were about eight-tenths of a cent per pound on a pound of glue. Mr. RAINEY. That does not mean much to us. What was your return on the capital you have invested? What dividends do you pay?

Mr. DELANY. We pay no salaries, and it amounted-I will have to go to memory on this without the payment of salaries, to about, I think, between 8 and 9 per cent. We had a total invested in our glue department of about $210,000, and our profits were between $17,000 and $18,000.

Mr. RAINEY. What you want to do is to maintain your 8 and 9 per cent annual dividends?

Mr. DELANY. We do not pay dividends. It is a partnership.
Mr. RAINEY. It is the same thing.

Mr. DELANY. But in corporations, of course, salaries are paid. There are no salaries charged at all in our concern.

Mr. KITCHIN. What is the value of the American output for 1912? Mr. DELANY. I should think about $10,000,000 of glue and gelatine; perhaps a little more.

Mr. KITCHIN. We imported less than a million?

Mr. DELANY. Dollars' worth?

Mr. KITCHIN. Yes.

Mr. DELANY. I think I can tell you.

Mr. KITCHIN. That is correct.

Mr. DELANY. 1912 is rather misleading, because there was a decision of the Treasury Department in 1911 which embraced a large quantity of sheet gelatin; 1910 is really the last year in which there is any division made between manufacturers of gelatin and glue. In the year 1910, the fiscal year, the importations of glue and gelatin amounted to $1,237,000.

Mr. KITCHIN. Glue in 1912 amounted to $772,842. It was separated in 1912.

Mr. DELANY. Glue alone, $770,130.

Mr. KITCHIN. Did the Payne act increase the tariff on glue?

Mr. DELANY. It did not.

Mr. KITCHIN. It did not?

Mr. DELANY. No, sir.

Mr. JAMES. What is the labor cost?

PARAGRAPH 23-GELATIN, GLUE, ETC.

Mr. DELANY. It depends a great deal on the kind of glue being made. In my own factory the cost of labor last year was about $1.80 or $1.85 per hundred pounds.

Mr. JAMES. What is the tariff on it now?

Mr. DELANY. The tariff ranges, on such goods as we make, from 2 cents per pound on the lowest bracket to 25 per cent on the next succeeding bracket.

Mr. JAMES. That is much greater than the labor cost, then.

Mr. DELANY. I have stated that with a rearrangement of the schedule, so glue and gelatine were separated, a 25 per cent duty all around on glue would be satisfactory, so far as production of revenue is concerned, and it is sufficient for the manufacturers.

Mr. JAMES. How much of a reduction would that be on the schedule?

Mr. DELANY. On goods below 10 cents per pound it would be a reduction of about 30 per cent.

The CHAIRMAN. That would be practically no reduction at all. What you contend for really is to maintain practically the present schedule, is it not?

Mr. DELANY. No, sir; I do not. I would much rather see the schedule rearranged so that gelatin and glue would be separated.

The CHAIRMAN. But the rate would amount to the same, would it not? You would not have much difference on the basis you suggest. Mr. DELANY. You would have 25 per cent on goods up to 10 cents per pound. I do not think there are many goods brought into this country between 10 and 16 cents a pound. I think that is the smallest end of the importation.

Mr. LONGWORTH. Is it not true the imports have increased almost every year for a long period?

Mr. DELANY. Yes, sir.

Mr. KITCHIN. And the exports have increased, too, have they not? Mr. DELANY. I do not think there has been much difference in the exports, because they are specialties. They are not competitive goods.

Mr. KITCHIN. We do export several hundred thousand dollars worth, do we not?

Mr. DELANY. Yes; I think so.

Mr. KITCHIN. And we do not sell it to the foreigner cheaper than we sell it to our own people, do we?

Mr. DELANY. I can not answer that question.

Mr. KITCHIN. You do not, do you?

Mr. DELANY. We do not export any at all.

Mr. HARRISON. By far the greatest amount of importations of glue that come in is valued at not above 10 cents a pound?.

Mr. DELANY. Yes.

Mr. HARRISON. Three times as much of the next class, and practically none at all of the high-grade class?

Mr. DELANY. That is what I say. There is very little glue coming into this country above 10 cents a pound.

Mr. LONGWORTH. Does not the importation uniformly increase every year?

Mr. DELANY. The importations increase every year, as shown by my record, which goes back to 1895.

PARAGRAPH 23-GELATIN, GLUE, ETC.

Mr. LONGWORTH. How much were they in 1895 ?

Mr. KITCHIN. How much were they last year?

Mr. LONGWORTH. Let us get 1895 first. How much were they in. 1895 ?

Mr. DELANY. $421,862.44.

Mr. LONGWORTH. How much were they last year?

Mr. DELANY. You refer to glue alone?

Mr. LONGWORTH. Yes.

Mr. DELANY. Last year, $770,130.

Mr. JAMES. This glue which they export has to be sold in competition with the world, does it not?

Mr. DELANY. No, sir; that is not a competitive glue. It is a packing-house product. Only the packing houses have the material to make it. It is a specialty.

Mr. JAMES. If it is not a competitive glue, why do you want a high tariff over here to protect you against competition?

Mr. DELANY. That is a very small proportion of the production of the country.

Mr. JAMES. Then on that you would not need any tariff at all, because it is not competitive?

Mr. DELANY. I do not suppose the packer cares much about it, one way or the other.

Mr. DELANY. May I be permitted to make a correction of a question Mr. James asked me a moment ago?

The CHAIRMAN. Yes, sir.

Mr. DELANY. Mr. James asked me a question as to the percentage of profit in our glue department last year. We are also engaged in the manufacture of curled hair, and I had in mind the total profits of our business when I told him 14 per cent. The amount of capital we had invested in our glue department last year was about $210,000 and our profits were between $17,000 and $18,000 in that depart

ment.

Mr. JAMES. What is the other commodity you manufacture?
Mr. DELANY. Curled hair.

Mr. JAMES. Curled hair?

Mr. DELANY. Yes, sir.

ADDITIONAL STATEMENT FROM NATIONAL ASSOCIATION OF GLUE AND GELATIN MANUFACTURERS.

WASHINGTON, D. C., February 4, 1913.

Hon. OSCAR W. UNDERWOOD,

Chairman Ways and Means Committee.

DEAR SIR: In response to a request for a constructive suggestion in regard to the wording of paragraph 23, Schedule A, of the existing tariff act, we respectfully suggest that the maximum revenue that can be collected and that will also permit full and free competition with the domestic product can be realized by the adoption of the following phraseology and rates of duty, to wit:

Glue, glue size, insinglass or fish glue, and prepared fish sounds other than crude or dried or salted for preservation only, twenty-five per centum ad valorem.

Gelatin in sheets, emulsions, or any other form, and all manufactures of gelatin or or which gelatin is the component material of chief value, not specially provided for,

PARAGRAPH 23—GELATIN, GLUE, ETC.

valued at not above thirty-five cents per pound, thirty-five per centum ad valorem; valued at above thirty-five cents per pound, forty-five per centum ad valorem; agaragar, or Japanese isinglass, twenty-five per centum ad valorem.

Taking the above-named articles into consideration, we beg to refer to the reports of the Bureau of Commerce and Navigation for a period of 14 years, from 1899 to 1912, inclusive, during which time 57,755,892.90 pounds of glue, valued at not over 10 cents per pound, were imported into this country, of which the value was $4,085,585.49 and the duties collected were $1,443,898.26, as shown by the table annexed hereto.

These figures show the average invoice price to have been 7.07 cents per pound and the average rate of duty to have been 35.34 per cent. From the best information that can be obtained, about 25 per cent of these importations consisted of hide-stock glue, and the greater part of which was used for one specific purpose, and the average invoice price for which is about 9 cents per pcund; the remaining 75 per cent equal to about 43,316,919 pounds, was therefore invoiced at about an average price of 6.43 cents per pound, on which the average rate of duty was 38.86 per cent, and at this valuation a duty of 25 per cent would place such qualities of glue in this market at a cost of slightly over 8 cents per pound, a price sufficiently attractive to encourage an increase in importations to such an extent that the revenue derived therefrom would exceed the amount of duties now collected. Glues carrying an invoice price of 6.43 cents per pound enter more fully into general use than glues imported for specific purposes, hence the opportunity for increased importations.

We recommend an ad valorem instead of a specific rate, for the reason that the higher the price of glue the greater is its amnufacturing cost, and while the specific rate imposed in H. R. 20182 would be equivalent to over 15 per cent on glues of an average value of 6.43 cents per pound, it would only be about 11 per cent on glues valued at 9 cents per pound, which appears to us as a discrimination against the makers of the better qualities.

We also respectfully submit that the rate of duty which we suggest is an average reduction of over 28 per cent from the present schedule on glues valued at not over 10 cents per pound.

We request higher rates of duty on gelatin than on glues for the following reasons, viz:

First. The labor expense per pound to manufacture gelatin is much greater proportionately than in glue.

Second. The operation of the national and State pure-food laws has imposed within the past three years certain exacting requirements upon the makers in the United States, which have resulted in greatly increasing the cost of manufacturing gelatin (the larger part of which is used for edible purposes), whereas the European manufacturers do not have to comply with similar requirements in their own countries.

Third. The rates of duty asked for by the gelatin manufacturers of the United States will permit of lively competition and produce the highest possible revenue for the Treasury of the United States without any burden to the consumer.

Fourth. Gelatin valued above 35 cents per pound imported into the United States is for photographic purposes only and practically all of it is consumed by one concern.

PARAGR PH 23-GELATIN, GLUE, ETC.

Fifth. Furthermore, gelatin is a commodity that enters into the manufacture or production of luxuries quite altogether.

All of which is respectfully submitted.

CHARLES DELANY,

President National Association of
Glue and Gelatin Manufacturers.

Totals of sworn statements of profit and loss given to Senator Charles F. Johnson, of Maine, by the most prominent glue manufacturers of the United States for a period of 12 months ending in 1912.

Showing a percentage of profit of 0.66/100 of 1 per cent. The above figures are the totals of statements sent to Senator Johnson in response to a request to the individual glue manufacturers of the National Association of Glue and Gelatin Manufacturers that such sworn statements be sent.

81 FULTON STREET, New York, N. Y.

RUFUS W. POWELL,
Secretary National Association of
Glue and Gelatin Manufacturers.

Imports into the United States of glue valued at not above 10 cents per pound, including glue improperly reported as gelatin under above valuation, under specific rate of duty of 2 cents per pound.

[Collated from Reports of Commerce and Navigation, 1899 to 1912, inclusive.]