PARAGRAPH 3-OILS.

We are working with a process at the present time to materially reduce the price of oxalic acid, and if the United States Congress will allow this duty to remain as it is for the present we will be able to cheapen the commodity to the consumer if the process on which we are working fully materializes.

In addition to all the foregoing we are manufacturers of 22 per cent dark commercial lactic acid. There are three manufacturers of lactic acid in the United States at the present time. Originally the duty on this commodity was 4 cents, then reduced to 3 cents, and is now 1 cents. We are perfectly willing that the duty should be taken off if you see fit, as we have perfected our process to such a degree that we are to-day selling these goods to the consumer at 2 cents per pound, package included, f. o. b. our works, and this to the amount of 2,000,000 pounds per year, with the prospects of a large increase in consumption during the ensuing year.

The CHAIRMAN. Mr. Emery, I do not like to limit you, but you have already had 20 minutes.

Mr. EMERY. I am ready for any questions.

The CHAIRMAN. Does any gentleman desire to ask Mr. Emery any questions. [After a pause.] That is all.

PARAGRAPH 2.

Alcoholic compounds, including all articles consisting of vegetable, animal, or mineral objects immersed or placed in, or saturated with, alcohol, not specially provided for in this section, sixty cents per pound and twentyfive per centum ad valorem.

PARAGRAPH 3.

Alkalies, alkaloids, distilled oils, essential oils, expressed oils, rendered oils, and all combinations of the foregoing, and all chemical compounds, mixtures and salts, and all greases, not specially provided for in this section, twenty-five per centum ad valorem; chemical compounds, mixtures and salts containing alcohol or in the preparation of which alcohol is used, and not specially provided for in this section, fifty-five cents per pound, but in no case shall any of the foregoing pay less than twenty-five per centum ad valorem.

For sodium cyanide, see also Roessler & Hasslacher Chemical Co., page 372; for sodium sulphide, see also W. H. Nichols, jr., page 36; for formaldehyde, see also Dr. S. Lewis Summers, page 14; for perilla oil, see also S. L. Jones & Co., page 259; for sulphide of soda, see also General Chemical Co., page 40; for aqua ammonia, see also Michigan Ammonia Works, page 98.

OILS.

BRIEF SUBMITTED BY SPENCER KELLOGG & SONS.

Mr. OSCAR W. UNDERWOOD,

BUFFALO, N. Y., January 4, 1913.

Chairman Ways and Means Committee, Washington, D. C. DEAR SIR: We respectfully request that the following communication be made a part of the hearings by your committee of the proposed changes in the chemical schedule and the free list of the present tariff law:

During the past two years we have been investigating the crushing in the United States of various oil seeds, nuts, and beans grown in foreign countries, with the idea of competing with Europe and the

PARAGRAPH 3-OILS.

United Kingdom, each of which is now extensively engaged in this branch of manufacture and is exporting the oil to this country in great quantities.

In our investigations we have discovered that, although none of the raw materials, with the exception of peanuts, is grown in the United States, there is under the present tariff law either a sufficiently heavy duty imposed upon these raw materials and a proportionately low duty on the resultant oil, as to render economic manufacture in the United States a practical impossibility, due to the necessity of importing a dutiable raw material and manufacturing a duty-free product in competition with Europe where the raw material is imported duty free. Or there is no duty on either raw material or oil, which makes it impossible to compete with Europe owing to their cheap freight rates on raw materials, their cheap labor, and their ready market for the by-products (oil cake) almost none of which can be marketed in this country. This condition results in American consumers being forced to buy foreign oils through importers and brokers on foreign terms, paying higher prices than necessary and having little recourse in the case of inferior quality.

We believe that the oils enumerated below can be manufactured in this country with the same success that they are now manufactured in foreign countries, and that the result will be the starting in the United States of industries hitherto untried with the further result of better and cheaper oil to the consumer.

Let us repeat that none of these oil seeds or nuts is grown in this country, with the exception of peanuts, which article is treated separately in the detailed explanation below. Therefore there can be no injustice done the American farmer by lowering the duty on the materials enumerated below and allowing their crushing in this country.

Some of the materials, the crushing of which we have investigated, are not specifically provided for in the tariff act, thus bringing them under the n. s. p. f. clause for oil seeds or 25 cents per bushel of 56 pounds.

As this branch of manufacture has been neglected in this country up to this time, we feel that this chemical schedule of the PayneAldrich Tariff Act has become obsolete and that it should be changed in order to allow manufacturers to build up new oil industries in this country similar to those abroad. There has been during the last 10 years a tremendous growth in the oil seed crushing industry in Marseilles, Rotterdam, and the other centers of Europe, most of which growth has been occasioned by the increased demand for oil in the United States. It is our hope that if the schedule is changed the United States may be enabled to retain this large business and thereby improve the condition of both the manufacturer and the consumer. We have given this matter much study and we respectfully submit to your committee the request that the following be the rates of duty on the following materials. We have given in this schedule a detailed description of each seed, its resultant oil with the present and suggested duty; a record of the imports into the United States from September 1, 1911, to September 1, 1912, of each oil and following this date a condensed paragraph giving materials and the suggested duties.

PARAGRAPH 3-OILS.

Shea nuts, present duty n. s. p. f.; suggested duty, free. Shea-nut oil, present duty n. s. p. f.; suggested duty, 2 cents per pound.

This nut is a native of India and is not grown in the United States. It is inedible. The oil when refined is used for edible purposes and when raw for soap-making purposes. This oil was classed under "all other oils" in the import record.

Soya bean, present duty n. s. p. f.; suggested duty, free. Soya-bean oil, present duty free; suggested duty, 2 cents per pound.

A native of Manchuria. Inedible. Not grown in the United States. Oil used for paint purposes and for soap making. Imports during 1912, 26,230,061 pounds.

Mowra seed, present duty n. s. p. f.; suggested duty, free.

Mowra oil, present duty n. s. p. f.; suggested duty, 2 cents per pound.

This seed is a native of India. Inedible. Not grown in the United States. Resembles the peanut. Oil used for soap, and, when refined, for edible fats. No imports during 1912.

Niger seed, present duty n. s. p. f.; suggested duty, free.

Niger oil, present duty 25 per cent; suggested duty, 2 cents per pound.

Native of India. Not grown in the United States. Inedible. Oil used for soap and, when refined, for edible purposes. Classed under "all other oils" in imports.

Sesame seed, present duty, 25 cents per bushel; suggested duty, free.

Sesame oil, present duty, free; suggested duty, 2 cents per pound. Native of India. Not grown in the United States. Oil used for soap and edible purposes. Imports during 1912. Classed under "all other oils."

Palm kernels, present duty, free; suggested duty, free.

Palm-kernel oil, present duty, free; suggested duty, 2 cents per pound.

Native of Africa and South America. Not grown in the United States. Inedible. Oil used for soap, and, when refined, used for edible purposes. Oil imports during 1912, 29,323,889 pounds.

Peanuts, present duty (shelled), 1 cent per pound; suggested duty, free.

Ground nuts, present duty (unshelled), cent per pound; suggested duty, free.

Peanut oil, present duty, free; suggested duty, 2 cents per pound. Native of Africa. Oil used for edible purposes. Imports during 1912, 6,878,237 pounds.

Peanuts are grown in some of the Southern States, but are almost entirely exported to France or used here for roasting or eating. These are of a superior quality to the African nuts and are in consequence used for edible purposes and command a premium and are not crushed. The African peanuts, on the other hand, are used entirely for crushing purposes and do not, therefore, compete with the American peanuts. The American nut is grown in quantities insufficient even to supply the demand for a roasting peanut. We

PARAGRAPH 3-OILS.

will suggest that the words "for crushing purposes only" be inserted in the new schedule as applying to peanuts.

Candlenut, present duty, free; suggested duty, free.

Candlenut oil, present duty, n. s. p. f.; suggested duty, 2 cents per pound.

Not grown in the United States. Used for burning and soap purposes.

SUMMARY.

Free list. Shea nuts, soya beans, mowra seeds, niger seeds, sesame seed, palm kernels, ground nuts or peanuts for crushing purposes only, candlenuts.

Duty 2 cents per pound.-Shea-nut oil, soya-bean oil, mowra oil, niger oil, sesame oil, palm-kernel oil, peanut or ground-nut oil, candlenut oil.

In conclusion, may we express the hope that our requests will be granted and the chemical schedule changed according to our suggestions. Should this be done, we are sure that great benefit will result to both the American manufacturer and the American consumer. Very respectfully, yours,

Hon. OSCAR W. UNDERWOOD,

SPENCER KELLOGG & SONS (INC.).
GEORGE H. SICARD.

BUFFALO, N. Y., January 10, 1913.

Chairman, Ways and Means Committee, Washington, D. C. SIR: We wish to respectfully call your attention to the inclosed letters which we have sent to the. Chairman of the Committee on Ways and Means, of which we understand you are a member.

We desire to point out the good results that would accrue to consumers of oils as well as to the manufacturers, should our ideas of duties be followed.

Of course, the removal of the duty on the raw materials (shea nuts, soya beans, mowra, niger, sesame, palm kernels, peanuts, and candlenuts) would encourage the starting in this country of crushing industries in competition with this branch of manufacture in Europe. This would result in great benefit to the consumer for the following

reasons:

(1) It would enable him to buy oil direct from the manufacturer and not through brokers, as is now done, thus saving him the broker's commission.

(2) He would also be saved the loss that almost invariably results through leakage when oil is imported, which leakage can not be and is not covered by any exporter under 1 per cent.

(3) The consumer would also have direct recourse in case of inferior quality of the oil, to a reputable American manufacturer, governed by the same laws as the consumer, and anxious to please, knowing that his trade depends entirely on his reputation here in this country. But, in case the manufacturer should not show any disposition to adjust the claims of the consumer, the latter could refuse to pay the bill, and would thereby have a lever with which to force the manufacturer to come to terms, and in case this should fail, recourse could be had to the law, which treats manufacturer and consumer alike.

PARAGRAPH 3-OILS.

As the matter now stands, in case of inferior quality, the consumer can only file his claims with the broker, who forwards them to the manufacturer. In case this gentleman does not desire to settle, the matter must be referred to arbitration, which arbitration is never held in the United States, but is usually held in the country and city of the manufacturer. In case the arbitration proves unsatisfactory to the American consumer, as is usually the case, his only recourse is the law, as he has none of the manufacturer's money in his possession, due to the universal custom of paying sight drafts before the documents can be obtained and the cargo unloaded. Of course, any such lawsuit would be tried in the manufacturer's country and under its laws, and would, in all probability, result unsatisfactorily to the

consumer.

(4) It would enable him to get away from the purchase of oils on foreign terms and contracts, dictated by the manufacturers, which terms are highly unfavorable to consumers in this country.

We have further asked for a duty on the corresponding oils (shea, soy bean, mowra, niger, sesame, palm kernel, peanut, candlenut) for the following reasons:

Aside from the oil produced from these seeds, there is a residue or oil cake, which is used for cattle feeding. This material finds a ready market in Europe, but due to the large supply of fodder in this country, there is very little demand here. It is, therefore, necessary to export all of this oil cake and pay the freight to Europe in order to compete with the European oil cake. The freight rates to Europe on oil and oil cake are about on a parity. But, as there are about 40 pounds of cake to 15 pounds of oil in a bushel of seed, the freight on the oil cake to Europe will be correspondingly higher per bushel or gallon than the freight on oil from Europe, and, therefore, the American manufacturer is working under this disadvantage and also under the disadvantage of the difference between raw material freight to Europe and America. Oil mill labor is also cheaper in Europe than in the United States. We, therefore, feel that a 2 cents per pound duty on oil would be just in order to encourage competition with Europe for the oil business of the United States. And we further feel that, if our suggestion of duties is followed, at least four or five oil-seed crushers in this country will begin experimenting with the seeds enumerated above, and that there will be keen competition among these firms for the oil business of this country-this resulting in the general lowering of prices.

Before closing, we would further call your attention to the inclosed letter on linseed oil and seed. (See under par. 35, p. 259.) This question is, of course, familiar to you, but we would like to impress the fact that when both raw material and finished product are dutiable, if there is to be any reduction of duty made, it should be made to each correspondingly.

We would further reiterate our statement that there is no linseed oil trust, and that on the contrary the business is now conducted on such a competitive basis that the profits have been reduced to a minimum and money has been lost by the company erroneously termed, "The trust."

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