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paradoxical that they should not be able to compete in their own country against the same European competition, where they have no ocean freight and no import duty to pay.
Our principals do not in any way constitute a cartel and their two brands of decolorizing carbon, Norit and Purit, are sold by the petitioners and are, therefore, marketed in this country by distinct selling organizations. The connection of our principals with the Verein für Chemische Industrie A. G., Frankfurt, is merely for the purpose of assuring themselves of an adequate supply of a uniform wood charcoal, of which the German company is a large producer. The importations of decolorizing carbons from Germany are very small and if there are any cartels “flooding this market " it is not substantiated by the total tonnage imported, which was about 600 tons in 1928, or 15 per cent of the estimated domestic production. According to figures obtained from official sources, the importations were in 1927 and 1928, respectively, 593 and 658 short tons, but these figures include a certain amount of gas-absorbing carbon, which is in a class by itself.
There has been a wider application of decolorizing carbons during the last few years and it is therefore but natural that imports should in some measure increase but the ratio of increase of imported decolorizing carbons is extremely small in comparison with the domestic, proving that the American decolorizing carbon industry is amply protected.
With a large and growing tonnage, which we estimate at six to seven times the imports, there seems to be no reason why the earnings of American decolorizing carbon manufacturers should not show a satisfactory return on invested capital, unless it be due to their expensive selling organizations operating as separate corporations, which make it impossible to gain a true picture of their actual earnings from plant operations. American decolorizing carbon producers now enjoy about 85 to 90 per cent of the total consumption, which should be a very satisfactory share of the business, as the tonnage is divided among only two manufacturers. The real importance of the docolorizing carbon business lies not in the direction of the one or two producers who have but a limited investment and employ comparatively little labor, but rather in the direction of the large number of consumers of these carbons with millions of invested capital and with thousands of men employed.
There were two other decolorizing carbon manufacturers who went out of business some time ago but they were small units, incapable of competing, although prices at that time were much higher than they are at present.
There are two large gas-absorbing carbon manufacturers in the United States and these were capable of producing the largest part of our Government's requirements for gas-mask carbons during the World War. As far as we know, the Industrial Chemical Co., although in existence at the time, did not supply the Government with a single pound of gas-mask carbon, nor do we consider the raw materials nor the equipment used by American decolorizing carbon manufacturers suitable for this purpose. Gas-absorbing carbons are entirely distinct and have no decolorizing value.
While American decolorizing carbon manufacturers can look forward to a con tinued large tonnage and growth of their industry, imports seem to have reached their peak and will likely decrease, due to the intense competition of the Ameri can producers. The lowered prices quoted by American producers make it more and more difficult to compete and reduce the competition to one of quality rather than price. In fact one of the largest customers our principals ever bad here was lost three years ago and we have never been able to regain thi business.
Our principals have no desire to dump carbons in this market. They hav repeatedly assured us that they are not interested in this market if they ca not sell here with at least a reasonable profit. A revision of price recenti received from them actually shows an increase, particularly on the cheape grades. On the other hand, the extremely low prices quoted by America producers on large contracts seem to show either very low production costs or policy of rolling up tonnage and killing of competition.
Any increase in duty would give the two American decolorizing carbon mant facturers practically a monopoly of the business, resulting in higher prices, the disadvantage of the consumer. We consider the decolorizing carbon it dustry amply protected and respectfully petition your committee to retain th present duty of 20 per cent ad valorem.
In framing a new tariff bone char and decolorizing carbon should be co sidered on their own merits. While bone char is to some extent competiti
with decolorizing carbon and in price compares with the cheapest grades of American decolorizing carbons, it is the product of an entirely different industry, is produced from a different raw material, and is merely a char, as the name implies, and not an activated carbon.
May we also bring to the attention of your honorable committee that there are other “activated materials” than decolorizing carbons which are not carbons at all and have no relation thereto whatsoever. The term “activated materials" is indefinite, ambiguous, and misleading, and should not be mentioned in any paragraph which embraces decolorizing carbons.
L. A. SALOMON & BRO.,
GLIDDEN FOOD PRODUCTS Co.,
STATEMENT OF MARCH G. BENNETT, BOSTON, MASS., REPRESENTING THE AMERICAN LAMPBLACK MANUFACTURERS ASSOCIATION
Mr. BENNETT. My name is March G. Bennett. I am treasurer of Samuel Cabot (Inc.), Boston, Mass. I represent the American Lampblack Manufacturers Association, and I wish to thank the committee for giving me the opportunity to present a brief setting forth our desires. (Mr. Bennett submitted the following brief:)
BRIEF OF AMERICAN LAMPBLACK MANUFACTURERS ASSOCIATION
To the COMMITTEE ON WAYS AND MEANS,
House of Representatives, Washington, D. C. SIRS : The undersigned respectfully submit the following for your consideration and beg that you will grant the relief asked:
1. Paragraph : 73.
2. Request : Change from ad valorem to specific duty of 4 cents per pound, or if ad valorem duty, increase from 20 per cent to 50 per cent.
3. Reason: Competition from lampblack made in Europe, especially in Germpany and Belgium, where much lower labor, raw material, and manufacturing tosts prevail.
4. The manufacture of lampblack is an essential industry, since many American products can not be made without it. It is one of the oldest industries in America. Lampblack is the lightest in weight and the strongest in coloring power of all pigments. For these reasons small quantities only are required in any particular compound. It is sold at low prices, and owing to this lightness and strength its proportion of the cost of any compound in which it is used is infinitesimal.
As evidence of the importance of the lampblack industry to other industries of this country and to the national defense, it can be cited that it is essential in the rubber, electric-carbon, paint, printing ink, paper, and many other industries, and that during the war the increased use of lampblack was such as to require a great expansion of capacity. This fell off after the war, and the American manufacturer was further distressed by the cheap competition from abroad below referred to.
5. Owing to the higher costs of labor and raw materials in this country in recent years, the manufacturing costs of American lampblack have been so much higher than those in Germany and Belgium that millions of pounds of lampblack have been imported from these countries. Wages in this country for lampblack workers are $4.50 to $5 per day, and for the same workers in
Belgium and Germany, we are informed on reliable authority, 50 to 60 cents per day.
Lampblack is made in a number of different grades, and low-grade lampblacks have been dumped in this country at very low prices, as low as 234 cents per pound, package included, at a time when American cost of production was more than three times as much. The present manufacturing cost of such a black in this country is about 6 cents per pound. This low-priced foreign lampblack, falling into the hands of middlemen, is not sold to the consumer at valuation prices, but at prices sufficiently below American prices to secure the business. High-grade foreign lampblacks are now being imported at a valuation of approximately 6 cents per pound. For the same grade of black the present domestic cost of production is about 10 cents per pound. In this case also the imported black does not reach the consumer at the valuation price. In spite of the lower cost of raw material and labor in the foreign countries mentioned, it is obvious that neither the low-grade or high-grade blacks can be delivered in this country at these prices, package included, with profit to the foreign manufacturer, unless figured as dumping.
Lampblack is made from burning coal-tar oil. In other words, this product is just as directly a coal-tar color as aniline dye is. It is made chiefly from that fraction of the coal-tar distillate-i. e., the naphthalene fraction—which is perhaps the greatest source of aniline dyes. The German manufacturers in their production of coal-tar distillates for their dye works are able to produce this oil at very much cheaper prices than are possible in this country, and in that way to dispose of any surplus of this cheap oil manufactured into cheap lampblack with cheap labor by sale through middlemen in the United States.
Recent reports from Government sources indicate that prices of coal tar and its products are becoming lower still in Europe, which is an additional threat to American manufacturers of lampblack and an additional reason why further protection should be granted.
6. Paragraph 73 reads as follows:
" Par. 73. Gas black, lampblack, and all other black pigments, by whatever name known, dry or ground in or mixed with oil or water, and not especially provided for 20 per centum ad valorem."
It will be observed that in this paragraph lampblack is classified with gas black and with various other black pigments, the latter being of entirely different origin and character from lampblack. The only relation that they have to lampblack is that they are pigments and are black. They are made by grinding charred bone, charcoal, and similar things, while lampblack is made by burning coal tar creosote oil, mainly the naphthalene fraction, in elaborate furnaces and large settling and cooling houses, plants of large area which involve large expense of construction, and also very high upkeep charges because the structures are disintegrated by the high heats.
Gasblack also differs from lampblack, and should be treated differently and separately. Gasblack is made by burning natural gas through burners and this black is made practically exclusively in the United States. It does not reed protection and if the duty now provided for gasblack should be transferred and become a part of the increase in the duty on lampblack no loss of revenue or injury to industry would result. Although of similar chemical composition to lampblack, gasblack differs in its characteristies, and also because of its exclusive manufacture in America, it should be separated from lampblack.
We therefore beg to request
1. That lampblack be separated in the schedule from gasblack and other black pigments.
2. That the duty be increased, preferably by the application of a specific duty of 4 cents per pound, or if ad valorem duties are to be applied, to 5 cent ad valorem.
The above facts and arguments are concurred in by the American Lampblack Manufacturers Association. Respectfully submitted.
SAMUEL CABOT (INC.), By MARCH G. BENNETT,
BRIEF OF STANLEY DOGGETT (INC.), NEW YORK CITY COMMITTEE ON WAYS AND MEANS,
House of Representatives, Washington, D. C.: Following a very thorough investigation we have just completed in connection with the production and distribution of lampblack, we most heartily recommend, based upon our latest findings which are also backed up by 50 years of experience as manufacturers, wholesale distributors, and importers of various different colors and chemicals, including lampblack, that the present duty be reduced to 15 per cent which is the rate that applied prior to the 1922 change in the tariff.
Through close contact with the consuming trade we have learned that for a certain part of their production (this part in most cases the smallest but connected with certain specialities) they prefer certain grades of black which are made in Europe, which we believe is principally due to the fact that last referred production seems to be easier for them to grind, thus curtailing manufacturing expenses, besides gives them certain shades and tints, or we may specifically state, effects that are more pleasing to the eye according to the opinion of experts than they can obtain with American made lampblacks.
If following our most recent survey of conditions we had thought for a moment that the imported blacks were in any way going to interfere with or jeopardize the business of the American producers would not think of making recommendation as above, but we are certain there is no chance of conflict along the last referred lines since from the best statistics we have been able to obtain we see that the American lampblack industry has been gaining ground very rapidly. In checking figures back as far as we have been able to get them, we see where in 1921 the combined production of the American Lamp Black Manufacturers was 6,585,571 pounds, whereas in 1923 it had jumped to 11,117,456 pounds, while 1925 production had advanced some more to 12,031,745 pounds which figures indicate a healthy and steady growth, whereas imports although rather irregular, due no doubt to the general up and down trend of business throughout the country during different periods, have gradually fallen off, and as an absolute proof that the duty is not an important factor we beg to point out that while in 1921 the duty was only 15 per cent imports of lampblack were 366,274 pounds, whereas in 1922 after the duty had been raised to 20 per cent there were imported 636,189 pounds, still the tendency since has been downward, as the last and best record we have been able to obtain shows that in 1927 only 455,087 pounds were imported.
According to Government records find there are only five firms in the United States manufacturing lampblack, who employ only 174 wage earners, whereas there are hundreds of paint, varnish, enamel, and printing ink manufacturers using lampblack who sell their finished products to thousands of American citizens, who to the best of our knowledge are at present paying a higher figure when they purchase certain specialty products in which imported lampblack is used (specialty products in question referred to in the opening part of our brief) than they would have to pay if the duty was only 15 per cent, and it stands to reason that those manufacturers consuming lampblack who find they need imported lampblack to get certain desired results naturally have to charge more for their finished products in which they use the imported lampblack when the duty is 20 per cent than they would have to charge if the duty was only 15 per cent.
The change we recommend is one tending to benefit the many, and since, after all, the largest part of our population is that part to whom small savings sometimes mean so much, sincerely hope our proposal will be carefully considered and acted upon in exact accordance with our recommendation. Yours very truly,
STANLEY DOGGETT (INC.),
H. G. DOGGETT, Vice President. 34120-29VOL 1, SCHED 1-52
OCHRES, SIENNAS, UMBERS, IRON OXIDE
[Par. 75] BRIEF OF REICHARD-COULSTON, INC., NEW YORK CITY
, Both as domestic manufacturers and importers of the various items in this paragraph, it is our opinion that the present duty therein mentioned is fair and satisfactory to all and that it should not be changed. Proof of what we write is in the figures published by the Tariff Commission:
Tons 101, 090 41, 373 61, 000 28, 531
Value $3, 778, 942
1, 737, 478 2, 718, 088 1, 285, 294
238, 338 238, 258 395,684
SIENNAS AND UMBERS
IRON OXIDE (NATURAL AND SYNTHETIC)
33, 894 1927. Synthetic iron oxide
$214, 409 1923.
415, 865 1925..
5, 363 Imports, natural and synthetic:
866, 151 1925..
668, 170 1927
586, 883 The Tariff Commission can not divide the imported natural and synthetic iron oxides, so that the figures represent both. Therefore, to get a true comparison, you must add the domestic synthetic and domestic natural and compare the total with the imported total. Nineteen hundred and twenty-five is the last year we have record of the domestic synthetic. United States production:
Tons 1925 (synthetic) 1925 (natural)
33, 894 Total. Imports: 1925 (natural and synthetic)
From a study of these figures, it appears to us that the present tariff is satis factory and fair to both the importer and the American manufacturer,
39, 257 13, 489