PARAGRAPH 88-GYPSUM.

brought a revenue to the Government of about $195,000, which, of course, under the reduced 30 cents per ton, has gone down in the neighborhood of from $102,000 to $111,000 a year.

It is to be brought before the committee, however, that very little. of this remains to the Government, for the reason that the costs of inspection are of course very large and very great. There is this to be added, that we as importers have helped the Government very mightily, and have saved the Government many thousand of dollars of expenses by our system of weighing and looking after these things for the inspectors put there by the Government.

I feel in the very short time that the committee wants to hear me, and in view of the elaborate argument made three years ago, which is so handy to the committee, that there is very little to say except to point out to you that with that argument as a basis, with the other side, the opposition, fully represented (and I believe there is no opposition to-day), the committee reduced that to 20 cents, and in conference it was put at 30.

I would respectfully ask that it be placed on the free list.
The CHAIRMAN. Are there any questions?

That is all, Mr. Lessler.

MEMORANDUM TO THE COMMITTEE ON WAYS AND MEANS OF THE HOUSE of RepRESENTATIVES, REQUESTING THAT PLASTER ROCK OR GYPSUM, CRUDE, BE PLACED ON THE FREE LIST.

A duty of 30 cents per ton is levied on all importations of plaster rock or gypsum, crude, in section 88 of the Payne-Aldrich Tariff Act. It is respectfully urged that the time has come to place this article on the free list.

A very full hearing was had on November 24, 1908, before the Ways and Means Committee, at which it was urged to reduce this produce from 50 cents per ton, the rate fixed in section 91 of the tariff act of 1897. The argument, the examinations, and the letters concerning gypsum will be found in volume 1 of Tariff Hearings, pages 634 to 692. Based on this hearing and these arguments, the Committee on Ways and Means made the rate 20 cents per ton, which, in conference, was finally made 30 cents per ton and enacted into law as section 88.

The reasons advanced at that time by those in favor of the reduction obtain to-day, and the arguments against it are no stronger than those urged and advanced by the opposition.

The native mining of gypsum has not suffered because of the reduction of the duty, but has shown a gradual and healthy increase, both in the tonnage of the product and its value.

In 1909 the latest figures available of the domestic ton were those of 1907. The following is a table of the number of short tons mined and the value as given in the article "Gypsum" in Mineral Productions of the United States for the Year 1911:

It may also be noted that the census report of the Bureau of Manufactures on the gypsum industry shows an increase of 3 mills in the United States calcining the crude product. At the time of the hearings there were 79 mills and there are now 82. It would seem, therefore, that the domestic production has not been affected by the lowering of the rate per ton (20 cents) either in quantity or value, and that there is a healthy natural growth to the domestic industry. As a matter of fact, the importa

PARAGRAPH 88-GYPSUM.

tion of the crude gypsum is so small in proportion to the domestic product mined that its competition is really negligible. It might also be added that the use of the imported crude gypsum seems really a local proposition, with the railway freight rates considered and the differential against the seaboard manufacturers.

Just one word further as to the domestic product calcined. The price per ton to the consumer has kept pretty firm and nearly stable throughout the years intervening since 1909.

There has been no increase in the number of plants calcining the crude gypsum imported from Nova Scotia, Cape Britton, and New Brunswick. The crude gypsum is brought to the Atlantic seaboard to ports between the extreme points of Portland, Me., and Norfolk, Va.

The following table shows the tons imported and their value, with the amounts and duties paid from 1906 to date. These figures are taken from the Government publication, Imported Merchandise Entered for Consumption in the United States and Duties Collected Thereon. (See also, Imports and duties 1894 to 1907.)

On the amount imported during the year 1912, 264,382 tons arrived at the port of New York, valued at $303,538, and paying a duty of $79,314. From July 1, 1912, to November 30, 1912, there arrived at the port of New York 148,500 tons, valued at $170,560, and paying a duty of $44,550.

It would seem from these figures that there has not been a gain in the tonnage imported, while the domestic producer has gained largely.

It might be added, and it is to be hoped, that this tonnage may become larger, as it involves the use of American ships, barges, and lighters and the employment of more men to carry the product.

At the hearing in 1908 it was urged that in addition to an absence of reason based on the protection theory for the placing of this duty, that it was not even a real revenue measure. At that time it was figured that the gross return to the Government was about $195,000 a year based on an importation in 1907 of 390,000 tons of crude gypsum. It must be remembered that the Government had to expend an appreciable part of this money to inspect and oversee the tonnage. Were it not for the fact that the importers aid the Government by the use of patented machinery, hoists, lefts, etc., in the weighing and inspection, there would be nothing left for the Government from this duty.

Based on the 1912 figure with the importation of 363,658 tons of unground gypsum, the gross revenue to the Government was $109,197; hardly a revenue producer of any importance to the Government, when the cost of inspecting and weighing is taken therefrom.

The 1897 tariff placed a duty of 50 cents per ton on crude gypsum (sec. 91), which was, as has been stated, reduced to 30 cents per ton in the 1909 bill. (See sec. 88.) The act of July 26, 1911, chapter 3 (Canadian reciprocity act), placed plaster rock or gypsum, crude, on the free list, probably on the theory of a general reduction on the raw material.

The figures and estimates as to production, costs in Canada and the United States of the mined product, as well as those concerning labor, freight rates (both water and railway) have maintained about the same parity as 1909, when adduced before this committee at the hearing on November 28 of that year.

It should be remembered, and it is true now as it was then, that your petitioners are situated in a large community, that their plants represent large investments, that they employ some thousands of laborers, skilled and unskilled, whose wages have advanced; that their plants are permanent, stable, solidly built mills, that each pays a large amount of taxes, to say nothing of the restrictions imposed by the authorities regulating the safety of the buildings and the health of the workers. All this means

PARAGRAPH 88 GYPSUM.

large sums of money, and the industry does need a lowering or abolition of the duty on the crude rock to maintain its stability in the face of a larger and larger domestic output, which has the advantage of cheaper initial cost, very much cheaper running expense, a decided differential in its favor in railway freight rates, and endless and bottomless pits with undeveloped areas as a source of supply of their raw material. It is respectfully submitted that plaster rock or gypsum, crude, be placed on the free list. Dated, New York, January 8, 1913.

J. B. KING & Co.,

WOTHERSPOON PLASTER MILLS (INC.),
Long Island City, N. Y.

(Counsel, Montague Lessler, 31 Nassau Street, Borough of Manhattan, New York City.)

BRIEF OF THE NEWARK LIME & CEMENT MANUFACTURING CO., NEWARK, N. J.

NEW YORK, January 6, 1913. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, House of Representatives,

Washington, D. C.

DEAR SIR: In considering the rearrangement of the tariff, I urgently recommend that crude gypsum be placed upon the free list. This is the raw material used in the extensive manufacture of plaster of Paris along the Atlantic coast of the United States. For many years until the present tariff was instituted-it was on the free list. The duty brings the Government very little revenue, and in addition to the direct handicap which it imposes upon the manufacturing business here, it entails other disastrous consequences upon plaster manufacturing concerns on the eastern seaboard. I do not believe in any instance the Government weigher actually weighs the cargo as discharged. Physical conditions are such to make necessary that the material should be weighed on the scales of the consignee, by his employees; the customs inspector only oversees the procedure in a general way. As a consequence, very unsatisfactory disputes as to quantities and settlements are continually arising.

In 1908, before the present tariff law was enacted, there were nine plaster manufacturing concerns in operation along the coast using Canadian rock-four in New York, one in New Jersey, one in Maine, one in Pennsylvania, one in Connecticut, and one in Boston. Now the number has been reduced to five, there being three in operation in New York, one in New Jersey, and one in Connecticut. This is due largely to the competition of plaster from the interior of the United States, which is, even at the seaboard, driving out of use that made from Canadian gypsum. It is only for the higher grades of product that the plaster made from Canadian rock is used throughout the interior of the country; and it is very unfair that this tariff discrimination should be made between the citizens of the same country. There is no foreign plaster imported, and the only effect of the duty is to give some United States manufacturers, who already have great natural advantages, an unfair advantage over their competitors. An indirect effect of the duty is also to impose an unnecessary tax upon the users of plaster of paris, who necessarily require this grad of goods. In conformity with the effect of duties on raw materials, the final cost to the consumer is reflected in a much higher price than that indicated by the tariff exaction itself. The arguments for and against this duty were set forth in the tariff hearings before the then Committee of Ways and Means, under date of November 24, 1908, copy of which I inclose herewith. I would especially call your attention in this pamphlet to the information regarding the gypsum combination of interior manufacturers. The evidence clearly shows artificial control of prices and a desire to control competition through tariff impositions.

PARAGRAPH 89-PUMICE STONE.

Trusting that gypsum will be placed upon the free list, and offering no objection to a corresponding reduction in the duty on manufactured plaster. I remain, yours, respectfully,

PARAGRAPH 89.

CALVIN TOMKINS, President Newark Plaster Co. (Successors to Newark Lime & Cement Manufacturing Co.)

Pumice stone, wholly or partially manufactured, three-eighths of one cent per pound; unmanufactured, valued at fifteen dollars or less per ton, thirty per centum ad valorem; valued at more than fifteen dollars per ton, one-fourth of one cent per pound; manufactures of pumice stone or of which pumice stone is the component material of chief value not specially provided for in this section, thirty-five per centum ad valorem.

PUMICE STONE.

STATEMENT OF ELMER R. MURPHEY, PRESIDENT OF JAMES H. RHODES & CO., CHICAGO, ILL., AND NEW YORK, N. Y.

Mr. MURPHEY. My name is Elmer R. Murphey, president of James H. Rhodes & Co., of Chicago, Ill., and New York.

The CHAIRMAN. What paragraph do you appear in reference to? Mr. MURPHEY. Paragraph 87, with reference to pumice stone. Mr. LONGWORTH. What is your business?

Mr. MURPHEY. We are in the pumice-stone business.

Mr. LONGWORTH. Are you an importer?

Mr. MURPHEY. We are grinders. We import our grinding rock and grind it here.

The CHAIRMAN. The paragraph you are interested in is 89.
Mr. MURPHEY. That is my mistake.

Pumice stone unmanufactured (pezzame), valued at $15 per ton or less, at 30 per cent ad valorem, per ton of 2,240 pounds, which, at 32 shillings per ton f. o. b. point of shipment, which is Canneto, Italy, is equivalent to a duty of $2.35 per ton.

Pumice stone wholly or partially manufactured (or powdered pumice), three-eighths cent per pound, or $8.40 per ton.

Net protection: Is the difference between $8.40 on the manufactured, which we use for grinding purposes, and the manufactured or powdered, or $6.05 per ton.

Lump pumice, one-fourth cent per pound: But under this wording the customs authorities have been assessing three-eighths cent per pound on any lump pumice which had the corners filed off, claiming it was partially manufactured.

Manufactures of pumice stone, or of which pumice stone is the component material of chief value, not especially provided for, 35 per cent ad valorem.

TARIFF DESIRED.

Pumice, unmanufactured, valued at $15 per ton or less, should be admitted free, as it is our crude material for grinding purposes.

Pumice stone wholly or partially manufactured should remain at three-eighths cent per pound.

Lump pumice stone should be admitted free. It should also include lumps which have been filed or rolled which is done for convenience in packing and to save breakage in transit and for no other purpose.

Manufactures of pumice stone or of which pumice stone is the component material of chief value not specially provided for, 35 per cent ad valorem.

Reasons for free items.-None of this product is produced in the United States. Reasons for duty of three-eighths of a cent on manufactured.-Pumice stone manufactured in Italy is being sold in bags f. o. b. docks New York at $18.50 per ton of 2,000 pounds (that is, after the United States duty has been paid).

Thus, the United States custom records demonstrate that the Italians can grind, pack, and deliver at the dock at New York ground pumice stone at $11 per ton. We are willing to produce invoices, quotations, and refer to importations at this figure.

PARAGRAPH 89-PUMICE STONE.

American cost of production of powdered Italian pumice stone.-In 1908 was $23 per ton, but since that time is higher because of the grinding rock costing more in Italy, ocean freight rate being 75 cents per ton higher (with a further advance scheduled for 1913), and the duty being over $1 per ton more, so that our present cost of producing is over $25.51 per ton.

Conclusion as to the facts.If the unmanufactured pumice, which is our grinding rock, came in free it would reduce our cost of production $2.35, which would give us a net cost of $21.15 per ton, as compared to the cost of pumice ground in Italy of $18.50 per ton f. o. b. New York, which we are obliged to compete with.

The present ocean freight rate from the Lipari Islands to New York on Italian ground pumice stone is 14 shillings per ton or $3.45 in American money per long ton. On the unmanufactured or pumice in small lumps which we grind the rate is 18 shillings 6 pence or $4.56 per ton, owing to its greater bulk, thus putting us to an additional disadvantage of $1.11 per ton in ocean freight alone.

Wages in Italy. With which we compete in selling American ground powdered pumice. The women and girls who work in the pumice get 20 cents per day and the men get from 60 cents to $1 per day of 11 net hours in the summer and 10 hours in the winter. This is from personal knowledge of the writer gathered during his several visits to Italy and information gathered by our buyer in Italy, and is supported by the statistics at the Washington, D. C., Department of Commerce and Labor as to the average daily wage in Sicily.

The difference in their cost of production is made up largely of labor and wages, rent, etc. We append a schedule as to the wages in Lipari in 1912, where all the pumice stone is ground, and the wages we pay:

We have no advantage of the Italian grinder because of any labor-saving machinery, for we both use practically the same kind of a plant.

Wages in our Brooklyn, N. Y., mill.-In Brooklyn we pay from $2 to $3 per day of 10 hours' work and close half a day on Saturday.

Our rent in Brooklyn is $3,150 per year. In Italy our warehouse of practically the same dimensions costs us $300 per year.

Furthermore, this pumice is ground by prison labor who are paid 10 cents per day by the Government and thereby forced to work in the mills in order to exist. The Government has held they were technically not convicts because locked up only at night.

Letter No. 90178 of December 13, 1912, from the Treasury Department, Washington, D. C., written after the personal investigation of United States Consul Garrels on a visit at the Lipari Islands in August, 1912, reads in part as follows:

"Part of the product of the pumice stone mills at Canneto, Lipari, is manufactured by criminal convicts who are undergoing the fourth degree of punishment prescribed by the Italian penal. They are furnished lodging at lire 0.50 ($0.096) by the Government, which is not enough to keep them, and they work in the pumice mills, etc., to make a living. About 70 are employed in various grades of labor in the pumice-stone mills, where they earn from 2 lire (40 cents) to 4 lire (80 cents) per day, and this is the scale of wages for common labor and is in keeping with that obtained generally in Sicily in the districts more remote from the larger manufacturing and industrial

center.

"It is the opinion of the department that the term 'convict labor' as used in section 14 applies only to the enforced labor of convicts and does not include labor voluntarily rendered to individuals.

"For adequate compensation under sentences similar to those mentioned it is therefore also of the opinion that the manufacturer of pumice stone under the conditions cited above is not convict labor within the meaning and intent of the said section 14 and the pumice stone so manufactured is not prohibitive importation under this section.” * (J. F. Curtis, Assistant Secretary.)

Therefore, we may not expect relief from the law prohibiting the importation of merchandise manufactured by convict labor.

Estimate of increase or decrease in imports.-These changes in duty would make no difference whatever in gross imports of all grades, as the article is such an unimportant one. The average buyer purchases from one to five barrels and less than