PARAGRAPH 1-ACIDS.

Moreover, the cost of packages, transportation charges, and general expenses of doing business are much greater in this country than abroad.

Briefly, we have tried to give some of the items that make up the difference in the cost of manufacturing these products in this country and in foreign countries, and if we are to continue this manufacture of them there must be a sufficient tariff to cover the difference. The present tariff barely does this. We would not object to a reduction on the present tariff on the finished goods, provided a corresponding reduction were made on the raw materials, but the parity between the two must be maintained. If changes are made that prevent us from operating our factory the loss will fall not only upon ourselves and the men we employ directly, but in more or less degree upon the entire community, as the well-being of the people of a manufacturing town depends upon the constant operation of its factories.

We are not connected in any way with other manufacturers of these products in this country, and ask for no protection against manufacturers who are working under the same conditions as ourselves, but we do feel that we should be permitted to operate this factory and should receive the necessary protection to enable us to do so and sell our goods in this country in competition with foreign manufacturers who operate under entirely different labor and living conditions.

Respectfully,

Hon. O. W. UNDERWOOD,

RALPH L. FULLER, Secretary.

Chairman Committee on Ways and Means,

House of Representatives, Washington, D. C.

TANNIC ACID.

BRIEF OF MALLINCKRODT CHEMICAL WORKS ET AL., REGARDING MEDICINAL AND OTHER FINE CHEMICALS.

Hon. OSCAR W. UNDERWOOD,

Chairman Committee on Ways and Means,

House of Representatives, Washington, D. C.

DEAR SIR: Pursuant to your notice of tariff hearings, 1913, dated December 11, 1912, we beg to submit the following:

Our business is confined largely to the manufacture of medicinal chemicals. Our products are mostly those prescribed by the United States Pharmacopoeia. Our processes are not secret but generally known, and none of our articles are patented. We represent a distinct branch of the chemical industry which, because of special features, should be considered separately and apart from the industries manufacturing chemicals for technical purposes in very large quantities with the employment of machinery and in which labor is a small part of the cost and in which few expert chemists are required. In our industry, on the other hand, the expense of labor is a considerable portion of the cost and we are unable to employ machinery except to a very limited extent. We pay our workmen from $2 to $3 per day. In Germany similar workmen receive from 3 to 5 marks per day, equal to, say, $0.72 to $1.20 per day. We are somewhat

PARAGRAPH 1-ACIDS.

familiar with the conditions that obtain in the German factories in our line and from our own observations are convinced that the average German workman, at the lower wages, is more intelligent, more careful and efficient, and more amenable to discipline than the American workman. We attribute this largely to the training in the German industrial schools and German military system.

We beg to submit the following:

The paragraphs mentioned below indicate the paragraphs in the present tariff law.

PARAGRAPH 1.

Tannic acid or tannin.-Present rate, 35 cents per pound. Since this rate was enacted, conditions in this country have changed in the matter of solvents used, etc., and the duty could be reduced. We suggest that the phraseology with respect to this article in paragraph 1 read as follows:

"Tannic acid or tannin, over 70 per cent, 25 cents per pound; less than 70 per cent, 10 cents per pound.

This new rate would not prohibit imports but probably would cause an increase of imports.

Gallic acid. The present rate, 8 cents per pound. Taking the present lowest foreign cost at 30 cents per pound, the rate of 8 cents is equivalent to an ad valorem duty of 26 per cent. The Payne bill reduced the duty 25 per cent, from 10 cents to 8 cents. The present duty of 8 cents per pound is no more than sufficient to offset the difference in cost of manufacture.

We suggest that this article be included in the general provision of 25 per cent ad valorem duty.

All other acids not specially provided for in this section: Present rate of duty, 25 per cent ad valorem. We think this rate should be maintained so as to enable manufacturers in this country to exist in competition with foreign producers who have all the advantages of cheap labor, cheap scientific help, and cheap crude material to assist them. In connection with this clause we especially desire to mention

Pyrogallic acid. The manufacture of this article has only recently been successfully established in this country, after a number of years of experimentation. The effect has already been to reduce prices. A considerable sum has been spent by domestic manufacturers in establishing the manufacture and investment in apparatus and plant. The duty of 25 per cent declared on this article is not sufficient to offset the handicap under which American manufacturers are laboring, and should be retained.

PARAGRAPH 3.

Alkalies, alkaloids, etc.-Present duty 25 per cent.

This clause covers a multitude of medicinal chemicals produced not only by us but by numerous other small manufacturers. Medicinal chemicals are mostly made in small quantities, many of them in lots of only a few pounds or ounces. The operations have to be either conducted by or under the immediate supervision of expert experienced chemists. We submit that in medicinal chemicals purity is of

PARAGRAPH 1-ACIDS.

first importance. A small increase in the cost of medicinal chemicals is of no importance to the ultimate consumers, the sick. Medicinal chemicals are dispensed to the public through the pharmacists who charge mainly for their professional knowledge and skill, and whether the ingredients cost 2 or 5 or 10 cents or more, the prices of the prescriptions are made 25, 50, 75 cents, or $1. The original cost, therefore, bears but little relation to the price paid by the ultimate consumer. A large amount of capital is invested in this industry and a large number of skilled workmen and chemists are employed.

The present duty is, in our opinion, not sufficient to offset the high cost of manufacture in this country, and the importation of medicinal and other pure chemicals has been steadily increasing. Our industry is, therefore, not in a strong position to meet foreign competition, even under present rates. That the rate is in no sense prohibitive is shown by the value of the imports, which in 1911 amounted to $3,338,419 and yielded revenue amounting to $834,494.

One of the articles affected by this paragraph is:

Caffeine. This product is now imported quite largely into the United States in competition with home manufactures, and there should be no change, therefore, in the present rate, provided tea siftings-the raw material remain on the free list. With the present rate of 25 per cent on the foreign market price of caffeine--equal to about 76 cents per pound-American manufacturers can and do compete. If, however, it should be concluded to put a duty on tea siftings, then a corresponding increase of duty should be made on caffeine.

We desire to call attention to the error in the caucus print of H. R. 20182, in which appears the average unit value of caffeine as $1.66 per pound, 1910, and $1.82 per pound, 1911, whereas the correct value is $3.06 per pound, as shown in the letter from the Treasury Department under date of April 24, 1912.

PARAGRAPH 14.

Chloroform.-Present rate of duty, 10 cents per pound. Crude materials for the manufacture of this article are acetone, bleaching powder, and carbon tetrachloride, all of which are dutiable when imported into this country, and all of which the foreign manufacturers obtain without the payment of duty.

We believe that this rate of duty should be maintained.

PARAGRAPH 15.

All other products or preparations of coal tar, not colors or dyes and not medicinal, not specially provided for in this section, present rate of duty, 20 per cent ad valorem.

We strongly urge that if a change should be made in this section of the paragraph the words "and not medicinal" be retained, for the reason that this wording covers a number of intermediate coal-tar products used by home manufacturers as raw materials in the manufacture of medicinal products. The omission of this provision is likely to cause confusion, trouble, and expense in the classification of such intermediate products.

PARAGRAPH 1-ACIDS.

PARAGRAPH 21.

Ethers, sulphuric.-Present rate, 8 cents per pound.

Conditions surrounding the manufacture of this article are now such that we as manufacturers of this article recommend a reduction to 4 cents per pound.

PARAGRAPH 27.

Iodine resublimed.-Present rate of duty, 20 cents per pound. This rate of duty represents only about 7 per cent ad valorem, and we think is as low as it should be. Crude iodine is the crude material for the manufacture of this article, and is at present on the free list. If any duty is established upon crude iodine, then a proportionate increase of duty should be made upon the resublimed article.

PARAGRAPH 28.

Iodoform.-Present duty, 75 cents per pound.

Crude iodine is the crude material for this article. If crude iodine is allowed to remain upon the free list, where it is at present, then the duty on iodoform, we suggest, can be established at the minimum rate of 50 cents per pound.

PARAGRAPH 31.

Magnesia, calcined medicinal.-Present duty, 7 cents a pound. In 1911, 65,739 pounds were imported into this country, yielding duty amounting to $4,598. The above imported quantity is probably more than is altogether manufactured in this country.

PARAGRAPH 41.

Opium.-Crude or unmanufactured, and not adulterated, containing 9 per cent and over of morphia, $1.50 per pound; opium of the same composition dried, powdered, or otherwise advanced beyond the condition of crude or unmanufactured, $2 per pound; morphia or morphine, sulphate of, and all alkaloids of opium and salts and esters thereof, $1.50 per ounce; cocaine, ecgonine, and all salts and derivatives of the same, $1.50 per ounce; coca leaves, 5 cents per pound. We believe that the present duties on opium and morphine are in proper relative proportion and should remain unchanged. lieve that any considerable further advance of duties would induce extensive smuggling and an evasion of duty, as has been the experience in the past when very excessive rates have been imposed. We believe, too, that the present duties on coca leaves, cocaine alkaloid and salts are sufficiently high and on an equitable basis and should not be changed. If, however, it is concluded, as was proposed in H. R. 20182, to advance the duty on coca leaves 100 per cent, from 5 cents per pound to 10 cents per pound, the advance on cocaine and salts should not be less than 75 cents, making the specific duty $2.25 per ounce. It requires 10 pounds or more, according to the quality of coca leaves, to make 1 ounce of cocaine hydrochloride. Making the same rate of advance on both leaves, alkaloid, and salts would therefore really be reducing the duty on the latter.

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PARAGRAPH 62.

Hydriodate, iodide, and iodate of potash.-Present rate of duty, 25 cents per pound.

This is equivalent to less than 10 per cent on the present import costs. Crude iodine is the crude material for the manufacture of this article, which is at present on the free list. If any duty is established upon crude iodine, then a proportionate increase of duty should be made upon the articles in this paragraph. These articles contain over 77 per cent of iodine.

PARAGRAPH 65.

(No. 1.) Medicinal preparations containing alcohol, or in the preparation of which alcohol is used, not specially provided for in this section, 55 cents per pound, but in no case shall the same pay less than 25 per centum ad valorem.

Should any change be made in this paragraph, we strongly recommend that this section of the paragraph be retained as it now reads. In the manufacture of many articles covered by this section, alcohol, being the chief material, is either decomposed or lost in the process of manufacture, and therefore does not appear in the finished product. Any change in the above wording would therefore be likely to cause confusion and enable the entering of such articles under other classifications with a consequent loss of revenue to the Government. The imports under this paragraph paying the specific rate of 55 cents per pound are apparently on the increase, as shown in the following tabulations:

(No.2.) Calomel, corrosive sublimate, and other mercurial medicinal preparations, present rate of duty, 35 per cent ad valorem.

At the present time there is a duty on mercury, which is the crude material for the manufacture of these articles, of 7 cents per pound. As these preparations contain about 80 to 85 per cent of mercury, the actual tariff afforded is equivalent to only about 20 per cent. We think therefore that this rate of duty should continue. If it is deemed wise to reduce the duty upon the metal mercury, then a proportionate reduction could be made in these preparations. Imports of these preparations have been constantly increasing, notwithstanding the above-mentioned duty, so that while the imports in the year of 1900 were 16,647 pounds the imports during the year 1912, in so far as we have been able to ascertain, far exceed the rate of 100,000 pounds per annum. We would suggest that this part of the paragraph be made to read as follows:

"Calomel, corrosive sublimate, red precipitate, and all mercurial medicinal preparations, 35 per cent."