PARAGRAPH 35-LINSEED OIL.

oil. At the present time both china-wood oil and soya-bean oil are admitted free of duty, and both are competitors of linseed oil. Under the Payne-Aldrich tariff the duty on linseed oil was reduced 25 per cent, and now stands at 15 cents per gallon. The removal of this duty would, we think, permit the importation of foreign oil at all times and necessitate a heavy reduction in the price of domestic flaxseed.

Owing to a gradual reduction in the area devoted to flaxseed and the consequent curtailment of the crop the linseed crushers and paint manufacturers of this country have for some years been contributing generously to an educational fund for the purpose of encouraging the growing of the flaxseed and of educating the farmer in the proper treatment of the soil and on the sowing of the seed. Our efforts have met with considerable success, and this year for the first time in several years we have raised a crop sufficient for the country's needs and one that has been profitable and satisfactory to the grower. Now, if through the removal of the protection given to linseed oil the price of seed is forced to considerably lower levels, the farmer, we believe, will not find it profitable to sow flax, and in consequence the linseed-oil industry of this country (which at present represents a business of sixty to seventy-five millions annually) would be very seriously crippled, if not entirely ruined. We would draw your attention to the fact that the duty on oil is in no sense a bonus to the crusher. There is widespread competition and over providing capacity sufficient to keep a considerable number of presses idle all the time. Aside from the benefit to the grower the duty on oil only serves to equalize the values as between this country and Europe.

In this country the oil is the principal product and the oil cake the by-product, while abroad the reverse is the case, the value of oil cake abroad being nearly twice that of the oil cake in this country. Under these conditions we can not compete with the European manufacturers of linseed oil without protection. The present duty on linseed oil is only just sufficient to meet these conditions, and in consequence we believe that any reduction of the present duty would be a serious menace to the life of the industry in this country, if not, indeed, its complete undoing.

As we can see no commensurate gain to any class of Americans by lowering or removing the duty, we earnestly pray your committee to recommend the same for retention.

Respectfully, yours,

PARAGRAPH 36.

WM. O. GOODRICH,

Chairman Linseed Oil Committee, National Paint, Oil, and Varnish Association.

Fusel oil, or amylic alcohol, one-fourth of one cent per pound.

PARAGRAPH 37.

Hemp-seed oil, ten cents per gallon; rape-seed oil, ten cents per gallon. See S. L. Jones & Co., page 258.

PARAGRAPH 38.

PARAGRAPH 38-OLIVE OIL.

Olive oil, not specially provided for in this section, forty cents per gallon; in bottles, jars, kegs, tins, or other packages, containing less than five gallons each, fifty cents per gallon.

See Park & Tilford, page 67; F. S. Bright, page 267; Antonio Zucca, page 274; C. A. Mariana, page 278; Italian Chamber of Commerce, page 105; La Manna, Azema & Farnan, page 286.

OLIVE OIL.

STATEMENT OF DR. L. J. HUFF, OF LOS ANGELES, CAL., ON THE SUBJECT OF OLIVE OIL.

Dr. HUFF. Mr. Chairman and gentlemen, I have been delegated by the olive growers, nurserymen, and olive-oil manufacturers of California to appear before you representing their interests in the matter of a proposed reduction in the tariff on olive oil of 20 cents per gallon. We request that this duty be allowed to remain, as it is for the best interests of those concerned; and we believe that after you have thoroughly examined our statement and investigated our conditions you will agree that to preserve that industry the duty must be left

intact.

The proposed reduction of 20 cents a gallon, as far as we can see, will in no way reduce the cost of olive oil to the consumer for this reason: Ninety per cent of the olive oil sold to the consumer in the United States is sold in bottles and small cans called sixes (6 to the gallon) and contain 20 ounces of oil each. The average selling price in the United States is 80 cents per can or bottle. A reduction of 20 cents per gallon would be 33 cents per bottle. It is very obvious that the retailer would not sell at 75 cents and lose 13 cents per bottle of his profit, which profit is small enough at the present time. Neither would he make a 763 cents price.

We claim that the proposed reduction on an average annual import of 4,000,000 gallons, or $800,000, would go to the importer alone, and the Government would lose this revenue and not help the consumer, and work a very serious hardship on the olive-oil industry of California. Twenty cents a gallon reduction on 4,000,000 gallons would be a fine plum for the importer and absolutely no benefit for the consumer. The importer's argument has been that a 20-cent reduction would increase the sale and thereby increase the revenue. If you will follow the European markets you will find that all of the olive oil being manufactured is readily sold, and that each year the supply is far below the demand, and especially so on the better grades of oil which come in competition with the California products.

There was imported in the United States during the year ending June 30, 1912, 3,050,322.96 gallons of olive oil, valued at $4,335,294.25, on which a duty of $1,525,161.58 was paid, a value of $1.42 per gallon. This was in packages containing less than five gallons. There was also imported 1,709,923.67 gallons, valued at $1,729,491, on which a duty of $683,969.44 was paid, a value of $1.01 per gallon. This was in packages larger than five gallons. There was also 702,565 gallons of denaturized oil, on which no duty was paid.

In 1908 we were represented here before the Ways and Means Committee, and at that time we asked that the duty be retained on

PARAGRAPH 38-OLIVE OIL.

olives and olive oil, and it was. Note the result in four years: With the very small protection we have had we added 6,000 acres more olives, and of the 12,000 acres then growing and 50 per cent bearing— 3,000 acres of these have come into bearing-and we have planted 6,000 acres more, making at the present time a total acreage in the State of 18,000 acres, from which we are securing at the present time 8,000 tons for oil and 4,000 tons for pickles, a total of 12,000 tons. Four years ago the average net income was only $17 an acre. This year the average net income is $36.88 an acre-not a very large income, but still it shows what we can do with protection to this industry, and all of this would be lost if the duty on olive oil were removed. In 1908 the olive industry of California represented $4,500,000. To-day it represents over $7,500,000. There is in California to-day 375,000 acres available for olive trees, and, with proper protection, the time will come when we can nearly supply our own country with oil and olives.

The total cost of harvesting and delivering olives in Europe to the factories rarely exceeds $7 per ton, while our cost is seldom under $20 per ton.

The average cost of California olive oil in the tanks is $1.85 per gallon, and the average selling price is $2 per gallon, giving the manufacturer a profit of 15 cents a gallon.

We use only the best sanitary mechanical methods for extracting oil, while in Europe a large percentage of the oil is extracted in the most crude and filthy manner imaginable, a large portion of it being done by the orchardist himself, and in many instances with only the use of the feet and hands.

Labor is a matter which enters largely into the California product. The entire labor pertaining to all the olive industry in Europe, including field laborers, manufacturing laborers, office help, etc., is $1.04 per day. In California, including the same help as mentioned above, it is $2.47 per day.

Heretofore the by-products have been more or less wasted. Now we have started to extract from the pomace the foots oil. This oil is what is termed mechanical oil, used to a large extent by soap factories and silk manufacturers, and its extraction heretofore has been done only in foreign countries.

Another serious handicap that we have is the matter of freight. Olive oil can be laid down in New York or Chicago from Europe for 7 cents a gallon. It costs us 15 cents a gallon to deliver it to any point from Denver east, and 18 cents to 20 cents a gallon to deliver it from California to what is known as the Northwest; that is, through Montana and Idaho.

I have a detailed schedule here, which I will ask to have made a part of my statement.

The schedule referred to by Dr. Huff is as follows:

Average land value per acre, 9,000 acres of bearing olive trees all varieties, $250. Low value here caused by mountain and low land with orchards not cultivated or properly taken care of.

Average land value per acre, 9,000 acres growing but not bearing, $325. Higher value of land caused by quality of soil, higher state of cultivation with water facilities. Average yield of olives per acre in California, 1 tons. Low average yield is brought about by approximately 3,000 acres bearing, but not yet under full state of cultivation.

PARAGRAPH 38-OLIVE OIL.

Average price received by grower for three years, 1909-1912, 9,000 acres, oil olives on trees, $22 per ton.

Average cost irrigation, cultivation, fertilization, and pruning, 18,000 acres bearing and not bearing, $8.50 per acre. Low average caused by large amount of early planted acreage not being cultivated or irrigated.

Net average receipts to grower per ton for oil olives, $13.50.

Average price received by grower, 1909 to 1912, for pickling olives on trees, $62 per ton. Forty per cent of all olives produced in State are pickling olives, balance oil olives.

Net average receipts by grower for pickling olives, $53.50 per ton.

Net average receipts by grower for both oil and pickles per acre, $36.88.

Average cost of picking, 9,000 acres, $17.50 per ton.

Average cost shipping expense per ton, $3.50.

Net amount paid to grower for approximately 12,000 tons produced in 1911, $442,560. Of this tonnage, 4,000 tons were pickles representing 1,200,000 gallons and 8,000 tons of oil olives representing 280,000 gallons of oil.

Average cost of manufacturing olive oil for past three seasons including cost of fruit, manufacturing (not including selling expense or other expense pertaining thereto), $1.85 per gallon. Based on annual output of five largest factories, 90,000 gallons per year.

Average cost of curing and canning ripe olives including cost of fruit (not including selling expense or other expense pertaining thereto), $0.617 per gallon. Based on annual output of five largest factories, 409,998 gallons.

Average paid for labor field work including farm help and olive pickers, $2.17 per day.

Average paid for manufacturing including packing, shipping, selling, operating and office help, $2.76 per day.

Average paid for European labor, including field labor, where any paid, manufacturing plants and shipping stations, $1.04 per day. Covers, Italy, France, and Spain, approximately 400 orchards and 30 mills. Average labor in Greece is 84 cents per day.

Average cost of manufacturing California olive oil for past three seasons (1909, 1910, 1911).

PARAGRAPH 38-OLIVE OIL.

Average cost of pickling and canning California ripe olives for past three seasons (1909, 1910, and 1911).

Mr. HARRISON. It has been frequently stated before this committee that California produces about 5 per cent of the olive oil consumed in the United States. If that is so, you want a tax on the other nineteen-twentieths of the olive oil to protect that 5 per cent?

Dr. HUFF. We claim that if the tax which is now upon olive oil were removed that it would not affect the consumer at all.

Mr. HARRISON. Is not this an endeavor on the part of these small producers in California to make the people in the East pay their freight rates, through the tariff?

Dr. HUFF. I do not think it is. I think it is an endeavor on the part of the people of California to build up a business that is young and has shown that it can be built up.

Mr. HARRISON. At the expense of the rest of the United States? Dr. HUFF. I do not see how the expense would figure, because I do not think the consumer could get his oil for any less.

Mr. NEEDHAM. California produces about 10 per cent of the consumption in this country, instead of 5 per cent.

Dr. HUFF. Yes, sir.

Mr. NEEDHAM. How much has your investment in the olive business increased since the Payne law was enacted?

Dr. HUFF. From four and a half to seven and a half million dollars. Mr. NEEDHAM. Is there enough land in the States of California and Arizona to produce ultimately enough olives and olive oil to meet the home demand?

Dr. HUFF. I think there is.

Mr. NEEDHAM. Has the price of olives gone up in recent years, or the price of olive oil?