Schoellkopf, Hartford & Hanna Co., Buffalo, N. Y.; Tartar Chemical Co., 135 William Street, New York City. The CHAIRMAN. Just one minute. I will say to the members of the committee that the clerk and chairman have tried to divide the time among these witnesses, and I will be very glad if the witnesses may be allowed to consume their portion of the time, and then if the committee desire to cross-examine the witness, let that time come out of the time of the committee, and not out of the witness's time. Mr. Howard has used up all of his time now, but if any member of the committee desires to ask him any questions they may do so; if not, we will call the next witness. VIEWS OF JOHNSON & JOHNSON, NEW BRUNSWICK, N. J., ON THE CHEMICAL SCHEDULE. NEW BRUNSWICK, N. J., January 28, 1913. Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, House of Representatives, Washington, D. C. DEAR SIR: In consideration of the tariff schedules, especially Schedule A, which applies to chemical and pharmaceutical preparations, etc., we desire to present the following facts for your consideration: While we do not contend that the manufacturers of these products need a high protective tariff, they should have a certain amount of consideration. Taking our own line as a basis it is a fact that nearly all of the goods which we manufacture originated and have been developed by American industry. The manufacture of these products has been followed and in some instances grossly imitated by foreign manufacturers. In many countries when we attempt to compete with European manufacturers in their home market we are met not only with conditions of lower cost of labor and lower cost of raw materials but a high protective tariff. For example, in Germany, where there are a large number of manufacturers of goods in our line, and which manufacturers have followed our methods and our goods, there is a tariff ranging from 25 to 60 per cent on manufactured products. Should manufactured products be admitted free of duty, in our line we would be met with a peculiar condition. of an almost prohibitive tariff in Germany, with German products admitted to this country either free or at a normal rate. Further, we believe that manufacturers in this line should be encouraged from the fact that in the case of great disasters, wars, and the like, experience has shown that our people must depend on American manufacturers. For instance, in such late disasters as the Galveston flood, the Johnstown flood, the San Francisco earthquake, the Spanish-American War, and the like, it was imperative that there should be a source of supply immediately accessible. This can only obtain where there is sufficient encouragement for home manufacture of these products. Our suggestions would be as follows: The duty on finished products should be of such a rate as to enable home manufacturers to compete with European manufacturers in the American market. This would encourage the home manufacture of these products. It would insure a revenue to the Government from continued importations. It would enlarge the demand for crude materials and encourage the manufacture of such other raw material and intermediate products as are now imported. If, as we understand is proposed in the bill now being considered, raw materials are taxed it will place home manufacture at a disadvantage. Should it be advisable to levy duties on crude materials for revenue purposes, then an increase of duty should also be made on the finished products for the encouragement and development of home manufacture. Respectfully submitted. JOHNSON & JOHNSON. DR. J. BEBIE, ST. LOUIS, MO., WRITES CONCERNING THE CHEMICAL SCHEDULE. Mr. OSCAR W. UNDERWOOD, ST. LOUIS, MO., February 1, 1913. Chairman Ways and Means Committee, Washington, D. C. DEAR SIR: The chemical schedule being now under discussion by the Ways and Means Committee. I am taking the liberty of submitting my views on the subject, an action to which I am prompted by my 12 years' experience as chemical engineer. H. R. 20182 as passed by the House of Representatives last fall contains the extraordinary feature of proposing to levy import duty on chemical raw materials, and lowering or removing the duties on finished products made from these very raw materials. While I can not conceive that it be the deliberate intention or purpose of a legislative body to cripple or destroy a hitherto flourishing and growing industry, it is certain in my mind that a tariff bill such as H. R. 20182, if it becomes law, is bound to so affect the now existing chemical industry of this country. The following few arguments should, I believe, substantiate my views. A great number of drug and chemical products can not be manufactured in this country in competition with European products, unless duty is levied as to offset the difference in cost of manufacture here and abroad. As is generally known, the higher cost of manufacture in this country over the cost in Europe is due to several causes-high wages paid to skilled and unskilled labor; higher salaries paid to chemists, engineers, and all other professionals; higher first and maintenance cost of machinery, buildings, and general fixtures. The crude materials for many drugs and chemical products are not available in this country, therefore these products should remain on the free list in order to enable the American manufacturer using these raw materials to meet foreign competition with the finished products, in the manufacture of which these raw materials have been used. Only on that basis will it be possible for many branches of the American chemical industry to continue and to develop. To encourage such a development is not only in the interest of the many thousands connected directly or indirectly with these industries but it is also in the interest of the Government and the consumer, because it is an established fact that many of those products which are not manufactured in this country are selling at excessive prices and many products could be enumerated which are selling 30 to 50 per cent cheaper now that they are also manufactured in this country. The duty on these products, which made their home manufacture possible, therefore not only did not increase the selling price of these products, but was the actual cause of bringing it down to a reasonable figure. That the present duties are not of a prohibitive character is demonstrated by the fact that importation of dutiable products is steadily increasing, and the present tariff system and principle of levying duties should therefore be also satisfactory from the standpoint of Government revenue. On the other hand if duties should be put on raw materials, the importation would undoubtedly decrease to a great extent, because the manufacture of products necessitating such raw materials would be discouraged and stopped as soon as foreign competition would make such manufacture prohibitive. It is therefore more than likely that duties on raw materials would prove to be a very unreliable source of revenue. If, however, changes are considered necessary, due consideration should be given to the arguments submitted by the various manufacturing interests, because they are in position to give data and facts which make a thorough study of the subject possible. On that basis changes could be brought about for revenue purposes and with the object of doing away with some prohibitive duties as may exist at present and without the danger of inflicting serious damage to the industry. Having at heart not only my own personal interest as a chemical engineer, but also the one of the profession and the growth of the American chemical industry as well, I urge you to give that important branch of American manufacture in the coming issue a fair hearing and the chance for further development to which it is justly entitled. Yours, very respectfully, DR. J. BEBIE, 8717 McDonald Avenue. ALLERTON S. CUSHMAN, WASHINGTON, D. C., WRITES REGARD- THE INSTITUTE OF INDUSTRIAL RESEARCH, Hon. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, House of Representatives, Washington, D. C. DEAR SIR: I have followed with the closest attention the hearings of the Ways and Means Committee with reference to Schedule A. I have also given study to the bill, H. R. 20182, which was passed at the last session of Congress and which was framed on lines that, in the general average, called for distinct reductions on the finished products of American chemical industry and showed a tendency to place taxes on raw materials previously on the free list. My position as director of the Institute of Industrial Research, which calls for cooperative investigation work with a great number of chemical industries in this country, has led me to the belief that PARAGRAPH 1-ACIDS. the general policy of heavy reduction on finished products and increase of taxation on raw materials must inevitably tend to discourage and, to some extent, to destroy the chemical manufacturing industry of this country. There is probably no line of human industry, in my opinion, in which this country is more justified in seeking protection than in the chemical industries, nor is there any line in which we are more distinctly led, up to the present time, by Europe. Nevertheless, we have been making great strides in this country, especially in the last ten years. Many of our chemical industries are just struggling to get ahead at the present time, and although the labor cost against our chemical industry is much higher than the European cost, our American ingenuity and cleverness in adapting means to ends by substituting labor-saving devices is beginning to pull us out to even terms. I can not help but feeling that if the committee should in their wisdom give very careful heed to the arguments which have been filed by the manufacturers they will notice that, in respect to Schedule A particularly, there is very little indication of greed or desire for undue or unjustified profits. The taxation of the raw materials considered under Schedule A, as well as the substantial increase of duties on finished materials, will, in my opinion, operate only to the advantage of Germany and the other big manufacturing countries. Only my close touch with the subject which I am discussing would justify my adding my word of appeal to you in respect to these matters. Very sincerely, yours, PARAGRAPH 1: ALLERTON S. CUSHMAN, Director. Acids: Acetic or pyroligneous acid, not exceeding the specific gravity of one and forty-seven one-thousandths, three-fourths of one cent per pound; exceeding the specific gravity of one and forty-seven one-thousandths, two cents per pound; acetic anhydrid, two and one-half cents per pound; boracic acid, three cents per pound; chromic acid, two cents per pound; citric acid, seven cents per pound; lactic acid, containing not over forty per centum by weight of actual lactic acid, two cents per pound; containing over forty per centum by weight of actual lactic acid, three cents per pound; oxalic acid, two cents per pound; salicylic acid, five cents per pound; sulphuric acid or oil of vitriol not specially provided for in this section, one-fourth of one cent per pound; tannic acid or tannin, thirty-five cents per pound; gallic acid, eight cents per pound; tartaric acid, five cents per pound; all other acids not specially provided for in this section, twenty-five per centum ad valorem. For boracic acid, see also Italian Chamber of Commerce, page 103; for thymol and terpin hydrate, see Verona Chemical Co., page 71. ACIDS. SALICYLIC ACID. STATEMENT OF DR. S. LEWIS SUMMERS, FORT WASHINGTON, PA. Dr. SUMMERS. Our Government and its citizens are being unjustly taken advantage of by a $100,000,000 corporation of Germany. Through the inequalities of our tariff laws, in conjunction with our patent laws, and the skillful manufacture and dissemination of defamation calculated to discredit competition, this special interest PARAGRAPH 1-ACIDS. has patented control of opportunity and deprived the noncombative sick of the use of what would best restore their health. This corporation is selling in the United States a long list of patent medicines at prices many hundred per cent in excess of the prices for what they sell the same products for to all other peoples. The druggists of the United States have to pay 43 cents per ounce for aspirin or acetyl-salicylic acid. There are most probably more than 10,000 ounces of it sold in this country every day. It costs the manufacturers of it less than 5 cents per ounce to produce it. All other peoples ean buy the same identical substance, made by the same corporation, for less than 10 cents per ounce. The excess extortion filched from the sick of the United States by this corporation of Germany for acetyl-salicylic acid will most probably exceed in 17 years over $20,476,500. The so-called patent on acetyl-salicylic acid was obtained from our Government by misrepresentation. The product was fully described in Current Literature by Kraut in 1869. They claimed that their acetyl-salicylic acid was different from that described by Kraut in that their's did not liquefy until it reached a much higher temperature and that it did not produce a violet color when added to a weak solution of chloride of iron. Our Patent Office has since acknowledged, when it issued patent No. 740702 on the sodium salt of acetylsalicylic acid, that if the medicine is made in exact accordance with the prescription written by Kraut in 1869 it would produce the identical acetyl-salicylic acid they claimed. As to the definite temperature at which the product is converted to a liquid condition, there is none. It will completely liquefy, with decomposition, if gradually heated to a temperature of 120° C., or 15° less than claimed in the patent. If our tariff is to be one of protection to American industry or one of evenness, then these medicines should be taxed on the basis of their selling prices in this country, and not taxed on the basis of the cost of their production in another country. The postal laws of our country are being violated by the Journal of the American Medical Association to the material benefit of this octopus corporation and some other favored German corporations who have combined in the restraint of trade. Under the regulations governing the use of the mails by publications at second-class rates, our laws provide that there shall be no discrimination between manufacturers in the use of the advertising pages. The Journal of the American Medical Association refuses the opportunity of making known the truth about American-made competing chemical compounds of superior value-on the technicality that all products advertised in the journal must be first approved of by its council on pharmacy and chemistry of the American Medical Association. This device is supposed to constitute this council as a "referee" and is supposed to bind those who are intrepid enough to submit their products to it to abide by its decision and forfeit the right to advertise in that journal. Do our laws tolerate such blatant deceit ? Thus the patent medicines made by the $100,000,000 corporations in Germany, who are in the combination to restrain competition in medicines in the United States, were approved of en masse, over six |