PARAGRAPHS 95-96 CARBON. cent instead of 30 per cent ad valorem on brushes, plates, disks, and electrodes 30 per cent instead of 20 per cent. No. 96 we feel that there should be 45 cents per 100 feet instead of 35 cents; for petroleum coke-lighting carbons, 75 cents instead of 65 cents per hundred feet, lighting carbons made chiefly of lampblack or retort coke. First, our reason for the above request is that material and fuel are very much higher. Second, that labor is a very great item of expense; much lack of appreciation by public on the labor cost of finishing carbon products; close limits on size requires high-class labor, which is very much higher than in Europe. Our books are open at all times for inspection. Very truly, yours, Hon. OSCAR W. UNDERWOOD, PURE CARBON Co., R. A. DEMPSEY, President. CLEVELAND, OHIO, January 6, 1913. Chairman Ways and Means Committee, Washington, D. C. DEAR SIR: It is our understanding that Schedule B of the present tariff bill comes up for consideration in the near future. We, as domestic manufacturers, are vitally interested in paragraph 95 and believe that any reduction in duty would be extremely detrimental to the domestic manufacturer and domestic labor employed in the carbon business. In our opinion the present duty should be increased to 40 or 45 per cent and in support of such statement submit the following reasons: First. It is a well-known fact in the carbon business that the sale of carbon specialties in this country of French, German, and English make, such as disks, brushes, etc., as covered by paragraph 95, have increased greatly during the past few years, in fact very much more rapidly than similar domestic items. It is therefore very evident that a reduction in the present duty would further handicap the domestic manufacturer. Second. Fifty per cent of the cost of manufacturing brushes, disks, etc., is a labor cost, a large percentage of which is of a very highly skilled nature. In the majority of cases the trade demands that this class of material be finished to from one to two thousandths of an inch, and, as you are doubtless aware, labor producing these results must naturally be experienced and demands very much higher compensation than the foreign equivalent. We are sending you under separate cover samples of brushes and disks, showing the high finish and exactness spoken of. Any reduction of duty on articles covered by paragraph 95 would, in our opinion, be dertimental to the best interests of American labor. In regard to paragraph 96, while the duty on this section, which includes electriclight carbons, gives more protection than that of products coming under paragraph 95, still, in our opinion, it is not sufficient to make up the difference between cost of production at home and abroad, and a slight increase in duty would be only fair to American producers. Therefore, as we view it, both from the standpoint of the domestic manufacturer and his employees, the present duties on paragraphs 95 and 96 of schedule B should be maintained, and if possible increased. We sincerely trust you will give the foregoing expression of our views favorable consideration. Very truly, yours, THE NUNGESSER CARBON & BATTERY CO., To the Hon. OSCAR W. UNDERwood, CINCINNATI, U. S. A., February 12, 1912. Chairman Ways and Means Committee, House of Representatives, Washington, D. C. DEAR SIR: We are manufacturers of dry cell batteries and use carbon electrodes in large quantities. We understand that there is a bill introduced under paragraph 95 to place a duty of 20 per cent ad valorem on coal-gas retort carbon. This article is a by-product in the distillation of gas from coal. We are firmly under the impression that there is not over 15 to 20 per cent of retort carbon (used in making carbon electrodes and carbon brushes) manufactured in this country. The production as above stated of coal-gas retort carbon in this country is a very limited one. We are large users of coal-gas retort carbon, and a duty of 20 per cent would not protect home industry to any extent, but the duty would be an absolute hardship on us as well as other manufacturers of dry cell batteries, provided same was imposed. PARAGRAPHS 95-96-CARBON. We would respectfully and kindly ask of you to recommend to Congress that the crude retort carbon (ground or unground) be placed on the free list. We know full well that it is not the intention of Congress or the revenue department to impose a hardship on the American manufacturer of carbon electrodes, dry cell batteries, or carbon brushes. Thanking you in advance for any attention you may give this communication, we beg to remain, Very respectfully, yours, Hon. OSCAR W. UNDERWOOD, THE ROCK ISLAND BATTERY CO., Per M. S. ROSENTHAL, President. ST. LOUIS, January 4, 1913. Chairman Ways and Means Committee, Washington, D. C. DEAR SIR: We presume in the revision of the tariff that carbon products, covered by section B, which we manufacture, will be considered, and we trust you will pardon us for intruding on your valuable time in writing this letter. We kindly ask that the duty now covered by paragraph 95, on carbon brushes, electrodes, plates, and disks be fixed at 45 per cent ad valorem, and we also ask that the present duty covered by paragraph 96, on electric light carbons, be maintained. You understand that carbon products are principally manufactured by hand labor, and to illustrate this statement we are sending you under separate cover two brushes, which we trust will reach you in due time. Our worst competition now in the carbon business is from foreigners, and if the tariff is reduced the carbon industry in this country will be badly crippled. Carbon products are used almost exclusively by large corporations, and the price is not a matter of much concern to them, and we believe the Government would realize more revenue on a higher tariff on carbon products than on a lower one, as the percentage of carbon products now imported in this couutry is in excess to the quantity manufactured. We sincerely hope that you will give the carbon industry due consideration and will see that it is protected, as by so doing the cost of living will not be increased and you will protect an industry that needs protection in this country. Very truly, yours, AMERICAN CARBON & BATTERY CO., BRIEF SUBMITTED BY THE NATIONAL CARBON CO., CLEVE Hon. OSCAR W. UNDERWOOD, LAND, OHIO. NATIONAL CArbon Co., Cleveland, Ohio, January 6, 1913. Chairman Ways and Means Committee, House of Representatives, Washington, D. C. DEAR SIR: Since the present tariff law was enacted there have been some important developments in the electrical industry, among which is the advent of a long-burning flaming arc lamp, which can be used for either street or interior lighting. This lamp requires a carbon or electrode which is a combination of carbon and various chemicals, and on account of the radical change in the nature of same demands different treatment with regard to duty than grades which are enumerated in the present law. As near as we are able to estimate, the total annual consumption of high-grade carbons is 40,000,000 pieces, and we supply about one-half that number, the balance being imported from Germany and France. These carbons are composed chiefly of lampblack, and the present rate of duty as provided in paragraph 96 is 65 cents per hundred feet. We believe our facilities and experience enable us to produce highgrade carbons as cheaply as they can be manufactured in this country, but our operations have not been highly profitable, as is shown by the following table, which covers sales for the calendar years 1910, 1911, and 10 months of 1912: Net sales Jan. 1, 1910, to Oct. 31, 1912. Cost..... Profit. Per cent of profit on sales, 11. 34. Less annual depreciation charges, not included in cost of product...... Net profit........ Per cent of net profit, 5. 97. $1,551, 931.55 1, 375, 878. 83 176, 052. 72 83, 414. 55 92,638. 17 PARAGRAPHS 95-96 CARBON. These figures are taken from the sworn statement of Mr. F. D. Lawrence, auditor and assistant treasurer of our company; the depreciation charges are 5 per cent on buildings and 10 per cent on machinery and tools. We think it will be conceded that this is hardly a fair manufacturing profit, especially in a business which must necessarily follow the various developments in the field of arc lighting, in consequence of which some of the machinery and equipment may at any time become obsolete. In 1909, prior to the adoption of the present tariff law, the average selling price of by 12 inch inclosed arc carbons, the size which constitutes over one-half of the total number used, was about $23 per thousand, and the average price to-day is about $18.25 per thousand. If it were not for economies we have been able to effect in the manufacturing processes this branch of our business would show a loss instead of a profit of 5.97 per cent. The increasing cost of labor and raw materials endangers even this small profit, and we hope the facts presented will convince your honorable committee that the present tariff of 65 cents per hundred feet should not be disturbed. Under this tariff, the cost to the consumer has decreased, the importation is larger, being at least 50 per cent of the total consumption of high-grade carbons, and the revenue to the Government has also increased. We have frankly stated the actual results from this branch of our business, but, if in the consideration of this subject, with this information before you, a reduction is decided upon, we trust it will not be more than 5 cents per 100 feet, making the duty on electric light carbons made entirely from lampblack or retort carbon 60 cents per 100 feet. The use of electric light carbons made entirely from petroleum coke is constantly decreasing, and importation has not been large, which is probably due to the smaller supply of petroleum coke abroad, and also to the fact that in Europe lampblack is not much more expensive than petroleum coke. In the event that your committee concludes to reduce the duty on lampblack carbons from 65 cents to 60 cents per 100 feet, a similar reduction of 5 cents per 100 feet would naturally follow on the petroleum coke carbons, but, as stated above, we sincerely hope the rate on either will not be changed. For many years the carbons used in arc lamps for street and commercial lighting were manufactured with the object of having them as pure as possible, and such carbons contain less than one-fourth of 1 per cent of ash; i. e., material other than carbon. The light from carbons of this description comes chiefly from the incandescent points, and not the arc itself. Within recent years the so-called flaming arc lamp appeared, and the carbons used in them contain chemicals either in the soft core in the center, in the shell, or on the outside of it. With such carbons the light comes chiefly from the arc, which is much longer than the arc produced by the other carbons, and is of a flaming nature, hence the name "flaming arc." This flaming arc, resulting from the chemicals used in the manufacture of the carbon. gives a light which has four or five times the candlepower of that produced by inclosed arc lamps using the pure carbons, previously described. Many inventors were attracted to this promising field with the result that numerous types of lamps are now on the market requiring different kinds and grades of carbon, some of them quite complicated in their nature, and all demanding a high grade of labor to produce, on account of the care necessary in the handling of the ingredients. The percentage of chemicals used varies from 5 to 50 per cent, and by placing the minimum at 5 per cent the character of the carbons can be definitely fixed to distinguish them from the ordinary grades, thereby eliminating all chance for error in classifying them for duty. We are firmly of the opinion that a specific duty on regular lampblack and petroleum coke carbons, with 100 feet as the unit, should be continued. They are packed in standard cases, usually containing 1,000 pieces each, and this basis provides for an easy and positive administration by the customs department. The prices of these carbons are confined to very narrow limits, the range being about $8.50 to $11.50 per 1,000 feet for petroleum coke carbons and $15 to $25 per 1,000 feet for ordinary lamp black carbons. We do not believe, however, that such a basis is equitable when applied to flaming carbons on account of the wide variation in shapes, sizes, weights, and grades, and because of the wide range of prices varying from $30 to $160 per 1,000 feet. While the possibilities of development are large, it being claimed by some that the flaming carbon will eventually supersede all other grades, it will undoubtedly be some time before they become standardized to the extent that other grades are at present. It would be difficult to provide specific rates which would properly meet these conditions, and it is, therefore, our recommendation that an ad valorem vasis be applied to all flaming carbons. Under the present law the duty on chemicals used in these flaming carbons is from 15 to 45 per cent, on lampblack 25 per cent, and on retort carbon 20 per cent. These PARAGRAPHS 95-96-CARBON. are raw materials for the carbon industry; and in view of the fact that these materials are much cheaper in Europe than in the United States, also that the cost of labor in the foreign factories is at least 70 per cent less than in the United States, we respectfully ask that these flaming carbons or flaming electrodes be assessed at an ad valorem duty of not less than 45 per cent. To provide this, we suggest the insertion after the duty on lampblack carbons, in paragraph 96, and preceding the duty on filter tubes, of the following: "flaming or luminous arc-lamp carbons or arc-lamp electrodes having flame-producing chemicals in the core, on the surface or mixed homogeneously into the body thereof, or manufactured in such manner that the weight of any materials other than carbon is more than 5 per cent of the total weight, 45 per cent ad valorem." We are confident that the foreign cost of flaming arc carbons plus cost of transportation to this country and a duty of 45 per cent will total an amount considerably less than the cost of manufacture of the same size and grade in this country under the most favorable conditions and that the duty requested will provide a continuance of the abundant foreign competition which has always existed in the carbon industry. The ad valorem rate we have asked to cover flaming arc carbons will provide for. a duty in proportion to their value and will result in a reduction of from 10 to 15 per cent in the duty on the styles of flaming arc carbons which have been in use for several years. With regard to that portion of paragraph 95 relating to carbons and reading as follows "carbon, not specially provided for in this section, 20 per cent ad valorem, electrodes, brushes, plates and discs, all of the foregoing composed wholly or in chief value of carbon, 30 per cent ad valorem" we understand that the first clause is intended to cover retort carbon or any other manufactured form of carbon used as raw material, but does not include lampblack, which carries a duty of 25 per cent as provided in paragraph 45. Lampblack and retort carbon are important raw materials in the manufacture of the carbon articles enumerated in the second clause, and labor constitutes from 40 to 60 per cent of the cost, and in some of the more highly finished articles it is more than 75 per cent of the cost. In the case of carbon brushes many of them are imported with flexible copper cable terminals commonly called "pigtails" attached, and these copper cables if imported separately would be assessed with a duty of at least 45 per cent. We understand, however, that both carbon brush and copper connection, the latter usually being worth more than the brush, are admitted at 30 per cent duty. The first clause of paragraph 95 reads: "Articles and wares composed wholly or in chief value of earthy or mineral substances, not specially provided for in this section, whether susceptible of decoration or not, if not decorated in any manner, 35 per cent ad valorem; if decorated, 45 per cent ad valorem." While copper coating, tinning, and copper connections may possibly not properly be termed decorations, it is certain that many of these carbon articles are highly finished products and that labor forms a large part of their cost. Developments in electric motors and generators have made the brush business more complicated, so that instead of the plain rectangular carbon block formerly used the demand is for highly finished pieces with bevels, holes and slots and metal connections securely attached thereto. This is also true of other carbon articles used in connection with electrical apparatus. Most of this work is done by hand, and in order to compete with the products of the German and French factories some readjustment is necessary. We believe that the duty on these manufactures of carbon should be at least as much as provided in the paragraph just quoted and respectfully request that the balance of the paragraph be changed to read as follows: "Unmanufactured carbon, not specially provided for in this section, twenty per centum ad valorem; electrodes for electric furnace, electrolytic and battery purposes, brushes, plates and disks, all of the foregoing composed wholly or in chief value of carbon, thirty-five per centum ad valorem; if metal plated or having metal attachments, forty-five per centum ad valorem." We have suggested a slight change in the wording of this clause in order to more specifically describe electrodes and definitely distinguish them from lighting carbons which are frequently referred to as lamp electrodes. In conclusion permit us to call your attention to the fact that the French tariff is 75 francs per hundred kilos. This is equivalent to 79 cents per hundred feet on by 12 inch regular high grade electric light carbons and a correspondingly high ad valorem rate on brushes and similar carbon products. The German tariff is 30 marks per hundred kilos but according to bulletin of the Department of Commerce and Labor entitled Tariff Series No. 7, the German Government imposes an internal-revenue tax PARAGRAPHS 95-96-CARBON. on imports of electric-light carbons which is from two to three times the amount of the customs duty and in addition to it. This is equivalent to an ad valorem duty of about 123 per cent on by 12 solid carbons and 189 per cent on the same size of cored carbons. The foreign manufacturers of high-grade carbons are located chiefly in Germany and France and supply not only their own countries but all of the balance of the world, with the exception of about 50 per cent of the consumption of high-grade carbons in the United States. Respectfully submitted. NATIONAL CARBON COMPANY, The following statement of net sales, cost, gross and net profit on high-grade carbons for the period of 2 years and 10 months ending October 31, 1912, has been by me verified and found correct: Net sales Jan. 1, 1910, to Oct. 31, 1912.. Profit.. Less annual depreciation charges, not included in cost of product.... Net profit..... Per cent of profit on sales.. $1, 551, 931. 55 1, 375, 878.83 176, 052.72 83, 414. 55 92, 638. 17 11.34 5.97 F. D. LAWRENCE, Auditor and Assistant Treasurer. Subscribed and sworn to before me this 4th day of January, 1913. [SEAL.] HOWARD L. BARKDULL, Notary Public. MEMORANDUM OF CHANGES SUGGESTED IN DUTIES ON CARBON PRODUCTS, PARAGRAPHS NO. 95 AND 96. 95. Beginning with the word "carbon" strike out balance of paragraph and insert the following: "Unmanufactured carbon, not specially provided for in this section, twenty per centum ad valorem; electrodes for electric furnace, electrolytic and battery purposes, brushes, plates, and discs, all of the foregoing composed wholly or in chief value of carbon, thirty-five per centum ad valorem; if metal plated or having metal attachments, forty-five per centum ad valorem." 96. After the words "sixty-five cents per hundred feet" and before the words "filter tubes" insert the following: "Flaming or luminous arc lamp carbons or arc lamp electrodes having flame-produc ing chemicals in the core, on the surface, or mixed homogeneously into the body thereof, or manufactured in such manner that the weight of any materials other than carbon is more than five per centum of the total weight, forty-five per centum ad valorem." Hon. OSCAR W. UNDERWOOD, NATIONAL CARBON CO., Cleveland, Ohio, January 9, 1913. Chairman Ways and Means Committee, Washington, D. C. DEAR SIR: In view of the statements made at the hearing on the 8th instant by Hugo Reisinger, an importer in New York, relative to the tariff on carbon products, paragraphs 95 and 96, and particularly his statement that the National Carbon Co. is a trust and has nearly all of the carbon business in the United States, we beg to state that this company is not a trust, it is not interested in any other carbon company, and it has not a monopoly of the business in this country. We manufacture a complete line of carbon products, including electric-light carbons, flaming arc carbons, carbon brushes, carbon electrodes, carbon specialties, wet and dry |