PARAGRAPH 639. PARAGRAPH 639-OILS. Oils: Almond, amber, crude and rectified ambergris, anise or anise seed, anfline, aspic or spike lavender, bergamot, cajeput, caraway, cassia, cinnamon, cedrat, chamomile, citronella or lemon grass, civet, cocoanut (not refined and deodorized), cotton-seed, croton, fennel, ichthyol, jasmine or jasimine, juglandium, juniper, lavender, lemon, limes, mace, neroli or orange flower, enfleurage grease, liquid and solid primal flower essences not compounded, nut oil or oil of nuts, soya-bean, olive oil rendered unfit for use as food or for any but mechanical or manufacturing purposes, by such means as shall be satisfactory to the Secretary of the Treasury and under regulations to be prescribed by him; attar of roses, palm, palm kernel, rosemary or anthoss, sesame or sesamum seed or bean, thyme, origanum red or white, valerian; and also spermaceti, whale, and other fish oils of American fisheries, and all fish and other products of such fisheries; petroleum, crude or refined, including kerosene, benzine, naphtha, gasoline, and similar oils produced from petroleum. See also National Varnish Manufacturing Association, page 5787; Benzol Products Co., page 5792; J. T. Schoellkopf, page 5805; New York Quinine & Chemical Co., page 5818. OILS. TESTIMONY OF WILLIAM H. WADHAMS, ESQ., REPRESENTING THE B. T. BABBITT CO., NEW YORK, N. Y. The witness was duly sworn by the chairman. Mr. WADHAMS. The next witness on your calendar is Mr. H. W. Brown, who is the chairman of our conference of laundry-soap manufacturers, of which Mr. Wadhams is secretary. As Mr. Wadhams has heretofore appeared here at previous hearings on the chemical schedule under Schedule A and under Schedule G before this committee, Mr. Brown has asked him to take his time, with the permission of the committee, so that, with your permission, I may have half an hour. The CHAIRMAN. There is a combination of two witnesses that under our rules will give you 20 minutes. If you can not finish in that time we will try to be liberal with you. Mr. WADHAMS. The laundry-soap manufacturers of the United States are in a highly competitive business. We have heretofore appeared before your committee on the 6th of January and stated our position on the general proposition of the revision of the tariff. In response to the inquiry on your postal as to what our opposition was, we stated that we were in sympathy with the general proposition of the revision of the tariff downward, to which we understand the majority of this committee are committed, and that for that reason, although we do not ask it, we do not oppose the proposed reduction upon the manufactured article-that is, upon laundry soap. Under H. R. 20182 it was proposed to reduce the duty from 20 to 15 per cent ad valorem upon laundry soap. We, however, take the position that such a reduction should not be made upon the manufactured article unless the raw materials which appear upon the free list and concerning which you are making an inquiry to-day, and which are used in the laundry-soap industry, in manufacturing, remain upon the free list; that as far as our trade is concerned it certainly would not be a revision downward if these items which have been upon the free list in all tariff acts both Democratic and Republican were now taken off the free list and a duty imposed upon them. Mr. HARRISON. Will you state what those articles are? PARAGRAPH 639-OILS. Mr. WADHAMS. I have prepared at your request, Mr. Harrison, and at the request of Mr. Kitchin, a table showing all the articles used by laundry-soap men, with those upon the free list plainly marked. Table showing raw materials used in the manufacture of common laundry soaps. [Giving percentages which each material bears to the total weight of raw materials used, present duty, proposed under H. R. 20182, and recommendations of the laundry-soap industry.] MATERIALS MENTIONED IN PRINTED BRIEF CONCERNING WHICH A RECOMMENDA TION HAS BEEN MADE. PARAGRAPH 639-OILS. Table showing raw materials used in the manufacture of common laundry soaps-Contd. MATERIALS NOT MENTIONED IN PRINTED BRIEFS AND CONCERNING WHICH NO RECOMMENDATION HAS BEEN MADE. 1 The list of raw materials given in this column contains all raw materials ordinarily used by soap manufacturers. All of these materials, however, are not used in any one formula. The percentage given indicates the quantity of each material when such material is included in the formula. The percentages can not be given with exactness for the reason that the quantities differ under different formulas. 3 Not mentioned. Free (insert distilled). This table shows the materials used, gives the percentage each material bears to the total weight of raw materials used, the present duty, the duty proposed under the Underwood bill (H. R. 20182), which passed the House, and recommendations of the laundry-soap industry concerning these several items. You will notice that we have made this table in two divisions. The first division is headed, "Materials mentioned in printed brief, concerning which a recommendation has been made." We filed a brief on the 6th of January with respect to the duty on soap; we filed a brief on the 20th of January with respect to the duty on tallow; we file a printed brief to-day with respect to the duty on the articles which heretofore have been on the free list, so that in the first division of this printed table are the articles concerning which we have made specific recommendations. The CHAIRMAN. Recommended that they all be put on the free list? Mr. WADHAMS. That they all remain on the free list; all, with the exception of tallow, which is now taxed one-half cent a pound, which we recommend be placed upon the free list, and with the exception of palma rosa and geranium, which have been reduced under the Underwood bill from 25 to 20 per cent ad valorem, and which we recommend be admitted free. Mr. HARRISON. You are speaking of all, as if the ingredients of soap making have all been taken off the free list and a tax put on by PARAGRAPH 639-OILS. the chemical schedule. Your brief, of course, does not convey that impression. Mr. WADHAMS. I am now coming to the second division of this table. I was just addressing myself to the first division as to which we made specific recommendations. Now, you will notice in the lower division of this table that we have those materials not mentioned in printed brief and concerning which no recommendation has been made in this printed brief. By examining those articles you will find that they contain articles very important to the soap industry, such as cottonseed oil, linseed oil, vegetable tallow, and greases, fats, and oils such as are commonly used in soap making, which were on the free list and which, under the Underwood bill, it was intended, I believe, to leave on the free list, although in regard to greases there must be some doubt, and concerning that I would like to have the opinion of Mr. Harrison. The items appearing under paragraph 580 of the Payne-Aldrich bill are, under paragraph 491 of the Underwood bill, taxed 15 per cent ad valorem. We think, however, that this is due to an error, because we do not believe it was the intention to make such a change. Mr. HARRISON. Paragraph 49 of the bill mentions the greases upon which tax is laid, rendered oils, and greases, and all combinations of the same not otherwise provided for, 15 per cent ad valorem. It seems to me it specifically answers your question. Mr. WADHAMS. You will find in the present law, under paragraph 580-you will please turn to that-greases found on that list, such as are commonly used in soap making, free of duty. Mr. HARRISON. This bill does not amend that part of the law at all; it only reduces the duty from 25 to 15 per cent. Mr. WADHAMS. It is that portion we wish to call the attention of the committee to, and that should be taken care of. Mr. HARRISON. It stays as it is, and no mention has been made of it. Mr. WADHAMS. Would you so leave the law? If a new law was drafted, with that clause in it, and the other was not mentioned, would it not supersede the old law because specifically mentioned? Mr. HARRISON. No. This is only an amendment to the existing tariff law, and it does not amend any part of the law which is not mentioned in the amendment. Mr. WADHAMS. That is the way we had the printed table first printed, and then, fearing that the new designations might be deemed to cover these greases which had previously been on the free list, we called attention to the provision in the Underwood bill so that there might be no obscurity as to our position, that we desired that they remain upon the free list. In regard to the rest of the items appearing upon the lower half of this printed table, you will observe that there was a reduction in the bill passed by the House last year as compared with the PayneAldrich law, and the reason that we had not mentioned these items specifically in our printed brief was that we assumed it would be the intention of a majority of this committee to carry out the intention as expressed in the Underwood bill. Inasmuch as there are reductions suggested in that bill upon those items, we were willing to rest upon the proposition that those reductions would be made. If, how PARAGRAPH 639-OILS. ever, it was necessary to call attention to our position with regard to those matters, we wish to have it distinctly understood that as far as our trade is concerned we recommend that no higher duty be placed upon the items than were recommended in the Underwood bill, as far as those items which appear upon the lower half of the page are concerned. In that connection I recall Mr. Harrison's statement at the time he reported the Underwood bill that there had been a general reduction as far as the total percentage was concerned upon materials used by the manufacturers of laundry soaps, and of course items like the item of tallow and these greases did not appear at that time, because the revision of the agricultural schedule was not contemplated and they were not included in his total upon which he made his estimates. The point that we make specifically is that though there is a reduction of a quarter of a cent or a half a cent upon some of these items appearing in the lower section the effect of that does not overcome the disadvantage to us in regard to the other items. does not counterbalance that effect. It Mr. HARRISON. Of course, as a representative of the soap manufacturers, your opinion is entitled to a great deal of weight in that respect, but I just wish to put upon the record the general effect taken. from your own brief of the rates proposed by the Underwood bill upon soaps. In the first place, you mention tallow. Of course that was not included in the chemical schedule; that belongs in the agricultural schedule, upon which no revision has yet been reported. When it comes to the tax upon oil, we did place a tax which amounted to an ad valorem equivalent to 3 or 4 or 5 per cent upon coconut oil, palm oil, and palm-kernel oil, etc., that you have spoken of here, and those being products not produced in the United States, it is evident that that was not a protective tax and was laid merely for revenue purposes, and according to our estimates would prove to be a very large revenue producer. As to gum rosin, I am frank to say that a decision of the Court of Customs Appeals, which occurred after the bill passed the House, would reverse my judgment as to the way in which that word should appear in the tariff bill. So far as I am concerned individually I think that gum rosin ought to be upon the free list. The tax laid upon carbonate of potash-it was expected that duty of half a cent a pound, which amounted to about 14 per cent, would produce about $42,000 worth of revenue; and the tax laid upon caustic or hydrate of potash does not refer to the potash refined in the way in which the soap manufacturers use it, and under the similar phraseology, the duty of six-tenths of a cent on caustic potash in sticks was expected to produce about $37,500 worth of revenue. The other materials used in the manufacture of soap upon which taxes were laid were the essential oils, which you have spoken of. The kind of soaps of which essential oils are an ingredient are perfumed and toilet soaps, and it seemed to the committee that the essential oils, in view of the limited use to be made of that kind of soap, were a fair subject of tax. Coming to the materials which you have enumerated here in your brief as reductions in the Underwood bill, I will read the one paragraph in which I referred to this in the House: |