PARAGRAPH 91-MICA.

The CHAIRMAN. As a general thing, we can not let witnesses swap, but in this case as you both come right together, and as Mr. Burgess follows you, you may swap places with him.

Mr. WELLS. Thank you.

BRIEF SUBMITTED BY MICA ASSOCIATION.

Committee on Ways and Means,

House of Representatives, Washington, D. C.

JANUARY 8, 1913.

SIRS: The above association, comprising persons, firms, and corporations engaged in business relating to mica as manufacturers, importers, dealers, and miners, whose names are subscribed hereto, respectfully petitions that the above-mentioned paragraph be amended to read as follows:

91. "Mica, unmanufactured, cut or uncut, three cents per pound and ten per centum ad valorem; built up mica, and all manufactures of mica, or of which mica is the component material of chief value, ten cents per pound and twenty per centum ad valorem.

This paragraph in the act of 1909 reads as follows:

91.

Mica, unmanufactured or rough trimmed only, five cents per pound and twenty per centum ad valorem; mica, cut or trimmed, mica plates or built-up mica, and all manufactures of mica, or of which mica is the component material of chief value, ten cents per pound and twenty per centum ad valorem." The changes asked are reductions of the duty as follows:

Much of the mica used in the various branches of industry is required to possess special characteristics which do not pertain to any mica mined in the United States. Especially is this true in the case of electrical machinery, which furnishes the largest field for the use of mica, there being no insulating material that can be substituted for mica in many electrical appliances. For instance, in commutators for motors and dynamos it is necessary to use either the amber mica of Canada or the India mica because of their being softer than the American mica and therefore wearing down uniformly with the alternate layers of copper.

The larger proportion of the mica consumed by the electrical industry is used in making built-up or reconstructed mica in the form of plates, boards, rings, segments, and special forms. This is an insulating material of vital importance to the industry, made of mica films molded together with an adhesive material into various forms. The greater softness, superior cleavage, and elasticity of the Canadian amber and the India mica make it requisite to use these grades to supply a product of the necessary quality.

In making mica lamp chimneys it is necessary to import the clear India mica, as no other mica can be obtained that possesses all the three requisite qualities as follows: Absolute clearness, perfect cleavage, and pliability, such that it can be rolled into cylindrical form without cracking.

The mica mined in the United States has its own field, chiefly for use in stoves, washers for spark plugs, etc.

Attached hereto and marked "Exhibit A," and printed on page 8, is a statement obtained from the Department of Commerce and Labor, showing importations of mica for 5 years ending June 30, 1912, which includes the period during which the act of 1909 has been in force, with the average value per pound of the mica imported and average ratio of the entire duty paid, figured on an ad valorem basis. From this it will be seen that the duty collected under the present act on mica imported during the 3 years

PARAGRAPH 91-MICA.

ending June 30, 1912, averaged 35.87 per cent ad valorem on the rough-trimmed mica and 37.12 per cent on the cut mica.

It seems to the petitioners that this is too high a rate of duty on raw material, the bulk of which is of a quality radically distinct from any similar native product and which must be imported regardless of the amount of the home product available.

Your petitioners respectfully submit that the present rate of duty on raw mica adds an unnecessary and unreasonable burden of cost to the price the American consumer must pay for those articles that must be made of the grades of mica that are not produced at home.

Attached hereto and marked "Exhibit B," printed at page 9, is a statement showing the actual imports of mica for the past 6 years, as in Exhibit A, but figured at the proposed rate of duty. Our proposed duty, figured on the importations of the last 3 years would average 19.45 per cent on the uncut, and 15.12 per cent on the cut mica. The price of amber and India mica has advanced continually for the past 5 years and very rapidly for the last year on account of the limited supply of this material and the increasing demand for same.

That the reduction of duty asked for on this schedule will not injuriously affect the production of American mica is shown by the fact that the home production increased in the years 1910 and 1911 over that of 1909 in spite of the reduction of $0.01 per pound on uncut and $0.02 per pound on cut mica provided for by the tariff act of 1909. This is shown by the statement annexed hereto and marked "Exhibit C," taken from the "Production of Mica in 1911," by Douglas B. Sterrett, published by the United States Geological Survey.

In recommending the change in wording, which puts cut and uncut mica under the same rate of duty, we desire to effect a simplification of this provision and to eliminate the existing confusion in classifying imports, which frequently arises because of the varying methods of preparing mica for shipment in the various foreign markets, and to prevent the frequent discussion as to whether mica should be classified as "rough trimmed" or "cut," which is continually arising between the importers and the customs authorities and which has often resulted in litigation. Of the 7,276,312 pounds of mica imported in 5 years, as shown by Exhibit A, 84.6 per cent was unmanufactured or rough trimmed only and only 15.4 per cent cut or trimmed, so this proposed change in classification will affect only a small percentage of the total importation.

It will be noted that your petitioners do not ask for a reduction on built-up mica and manufactures of mica but respectfully urge that the phraseology of the latter part of this paragraph remain as in the present act. The foreign manufacturer of built-up mica or mica board, who pays no duty on his raw material, can export his product to the United States and pay the present duty at a lower cost than that at which the American manufacturer can turn out his product.

Under the present act the American manufacturers of built-up mica pay a duty on their raw mica of 5 cents per pound and 20 per cent. Therefore, on a basis of 14 cents per pound valuation for raw India mica films, the total duty amounts to an ad valorem rate of 55 per cent. The foreign manufacturer imports built-up mica board on an approximate valuation 54 cents per pound and pays a duty of 10 cents per pound and 20 per cent ad valorem, equivalent to an ad valorem duty of 40 per cent.

Thus the American manufacturer of mica products pays a higher rate of duty on the raw material which he must necessarily import than his foreign competitor pays on the competing finished product. This difference is further accentuated by the lower labor costs favoring the foreign competitor. We feel that it would be a serious injury to those of your petitioners who are engaged in manufacturing to reduce the rate of duty on manufactures of mica as comprised in the last part of the mica paragraph. It is stimated that well over 5,000 people are employed in working up mica into manufactured products in the United States, while not more than 350 or 400 are employed in mining American mica.

ESTIMATE OF EFFECT OF PROPOSED CHANGE ON IMPORTS.

As to probable decrease or increase in the imports likely to be brought about by the proposed reduction, it is difficult to estimate the effect of this change with any degree of certainty.

If business conditions continue as favorable as at present, it is fair to assume an increased importation, as it is shown by Exhibit A that after the reduction of $0.01 and $0.02 a pound in the tariff act of 1909 the importations for the three following years showed considerable increase.

PARAGRAPH 91-MICA.

Further, the prevailing upward tendency of the price of Canadian and India mica will tend to keep up the revenue from this source.

PROPOSED CHANGES IN PHRASEOLOGY.

Our suggestion as to change in phraseology applies only to classification as between "rough trimmed" and "cut" mica and our reasons for suggesting this change are set forth in a previous paragraph.

SUGGESTIONS AS TO ADMINISTRATIVE FEATURES.

This same change that we have recommended in regard to classification will tend to simplify the administration of the tariff act as regards the paragraph in question. Respectfully submitted. THE MICA ASSOCIATION,

Comprising Chicago Mica Co., Valparaiso, Ind., by A. W. Pickford, president; Joseph Huse & Son, Boston, Mass., by Fedr. R. Huse; The Macallen Co., Boston, Mass., by Louis McCarthy, treasurer; Mica Insulator Co., Schenectady, N. Y., by E. C. Wood, vice president; Eugene Munsell & Co., New York City, by Lewis W. Kingsley, president; North Carolina Mica Co., Boston Mass., by F. R. Huse, treasurer; The Palermo Mica Co., New York City, by W. H. Steinmuller, president; A. O. Schoonmaker Co., New York City, by A. O. Schoonmaker, president; Storrs Mica Co., Owego, N. Y., by A. P. Storrs, president; Watson Bros., Boston, Mass., by F. L. Watson.

CHARLES P. STORRS,
Secretary, Owego, N. Y.

EXHIBIT A.-Mica-Imports and duties.

[From H. Doc. No. 1504 and later information furnished by Department of Commerce and Labor.] UNMANUFACTURED OR ROUGH TRIMMED ONLY.

PARAGRAPH 91-MICA.

EXHIBIT B.-Estimated duty on mica imported for five years ended June 30, 1912, figured at proposed new rate, 3 cents per pound and 10 per cent ad valorem.

UNMANUFACTURED OR ROUGH TRIMMED ONLY.

EXHIBIT C.-Production of mica in the United States, 1909-1911.

[From "The Production of Mica in 1911," by Douglas B. Sterrett, Department of the Interior, United States Geological Survey.]

SUPPLEMENTAL BRIEF SUBMITTED BY THE MICA ASSOCIATION JANUARY 9, 1913.

COMMITTEE ON WAYS AND MEANS, House of Representatives.

SIRS: Referring to the comment of Mr. Peters during our hearing on January 8 as to quantity of imports of mica during the last three years, we beg to call your attention to the fact that the comparison made in our original brief is based on the fiscal years ending June 30, 1908 and 1909. As compared with those two years, the imports of mica for each fiscal year since the reduction in tariff made by the Payne bill have been larger than the imports in either 1908 or 1909. Figures given in our original brief, Exhibit A, are divided under the headings "Unmanufactured or rough trimmed only" and "Cut or trimmed."

Respectfully submitted.

THE MICA ASSOCIATION,
CHARLES P. STORRS, Secretary.

PARAGRAPH 91-MICA.

STATEMENT OF MR. S. H. BROWN, ON BEHALF OF THE ASHEVILLE MICA CO., ASHEVILLE, N. C.

Mr. BROWN. Mr. Chairman, Mr. Vance Brown, who requested permission to make a statement before you to-day, has been detained at home on account of sickness, and he has requested me to either read or present this brief in his stead, with your permission. The CHAIRMAN. You may do so. What is your name? Mr. BROWN. Hubbard D. Brown. I am a brother of Mr. Vance

Brown.

The CHAIRMAN. Are you informed about the question which is being presented?

Mr. BROWN. Yes, sir; I am a practical mica man.

The CHAIRMAN. All right.

Mr. Brown thereupon read the statement of Mr. Vance Brown, as follows:

CHAIRMAN WAYS AND MEANS COMMITTEE,

ASHEVILLE, N. C., January 8, 1913.

House of Representatives, Washington, D. C.

DEAR SIR: We have been given to understand that the importers of mica, both the dealers and large users, expect to take advantage of the declared intention of the Democratic majority to lower the tariff, and at this time ask a substantial reduction on pure mica, and that built-up mica be left as it is. They will ask either that mica be put upon a straight ad valorem basis instead of as now a specific 5 cents and 10 cents per pound and 20 per cent ad valorem, or for such a change in the wording that either way there will be a very substantial reduction in the amount of duty collected on what they import, but not on what they manufacture.

While we are also importers of mica, we are the largest handlers of the domestic product, and the miners of this section rather look to us to put forward their protest against any change in the present schedule on this article.

The Payne-Aldrich bill, on the request of the importers, made a reduction of 20 per cent on the specific duties, so that it is felt that at this time it is not necessary to again

lower it.

The production of mica in this section has gradually increased. The United States report for 1912 is not yet available, but it will show a substantial increase from this section over 1911, possibly 25 per cent. This mica is principally produced by hundreds of small miners and bought from them by several dealers who manufacture it into various shapes for the consumer. The wage paid at the mines is from $1.25 to $2 per day. In the dealer's factory, where it is worked up, the wages are from 75 cents to $2.50 per day. On the whole the average in both would be somewhere near $1.50 per day.

Practically all the mica imported that comes in competition with this product is received from India, much of it by way of London.

In India the wage scale, in the production and working up of the raw material into the various grades for sale to the importer in this country, runs from 10 to 20 cents per day, so that in a free market it is certain that the production of this section could not compete with this Indian production. While it is true that at the present time, because of the demand being greater than the visible supply, the price of this Indian product has advanced very considerably in the past year, this condition will be bound to increase the output both there and here, and such advance should be taken into consideration only over a series of years the same as a tariff act would effect.

In reference to the request that the specific duty be removed: Taking the 1911 figures of the United States Geological Survey report, the specific duty should have been about $78,000 and the ad valorem $100,000, and it might be argued that the placing of ad valorem at 40 per cent would raise even more revenue, but inasmuch as the greater bulk in weight is of the small, less valuable pieces, even allowing nothing for undervaluation that might be practiced, it would be found that 40 per cent ad valorem duty would neither raise nearly so much revenue nor would it give nearly so much protection to the domestic producer as the present schedule.