PARAGRAPH 679-SPICES. manufacturers to have their brands unprofitably sold, although in a certain way it is desirable for a manufacturer, because the cheaper the intermediate men work for him the better, because it distributes his goods at a lower price, and the lower the price at which the goods are sold the greater the distribution of the goods. Mr. DIXON. At what price did you say the retailer purchased this pepper? Mr. DURKEE. He gets it at 45 cents and we sell it at 36. Mr. DURKEE. Gross; yes, sir. Mr. DIXON. And he is satisfied with that profit, is he? Mr. DURKEE. Well, he gets 5 cents a package for the pepper, and the price on that package would not be cut, I imagine. If a cut in price was made it would no doubt be made on the larger package; for instance, the package that holds double the quantity, say a quarter of a pound package, which ought to retail, and ordinarily does retail, at 10 cents. That is frequently cut to a lower price; cut to 7 cents, 8 cents, or some other price. Mr. DIXON. What proportion of pepper is put up in the 5-cent package? Mr. DURKEE. At the present moment I should think the largest part of it, but I do not know the exact figures. For several reasons package goods of all sorts are increasing in favor. In the first place every package carries the name of the manufacturer, and the name of the manufacturer carries some weight as a guaranty of purity. It is also a convenient package, because the grocer does not have to put it up; it is also in an air-tight package; therefore it has a lessened deterioration. The spices contain a volatile principle and exposed to the air that evaporates. In an airtight package the goods remain strong longer, as they ought to remain. But you can not very well cut the price on the 5-cent article; but the packages containing double that quantity, the quarter-pound packages, are frequently cut in price. The CHAIRMAN. The next witness will be Mr. W. D. Weikel. TESTIMONY OF W. D. WEIKEL, REPRESENTING THE WEIKEL & SMITH SPICE CO. The witness was duly sworn by the chairman. Mr. WEIKEL. Gentlemen, I have been engaged in the spice business for nearly 30 years, my house for nearly 50 years, but I come before you as the representative of the American Spice Trade Association, a body made up of representatives of the importers and grinders as well as brokers in spices. This association is almost unanimously opposed to the levying of a duty on crude spices, the only exceptions being a few who hope to benefit by the increase in price which would necessarily follow the placing of a duty-merely a matter of speculation-and these same people would in the future be just as likely to advocate the taking off of a duty, since their profits would come from the violent changes in prices which necessarily follow such actions Now, we advocate free crude spices, herbs, and seeds such as caraway, coriander, celery, and mustard, because such articles are not PARAGRAPH 679-SPICES. raised in this country, with but few exceptions. Red pepper is raised here in but small quantities, and every year the quantity seems to be less and less. Sage for commercial uses is brought from abroad, the American product not being used excepting where grown in private gardens or gathered by individuals, but the quantity of either is so small in comparison with the amount imported and used that it hardly enters into the consideration of the subject. Secondly, to put a duty on crude spices means to increase the cost to the consumer. This would be adding to his burdens and especially those of the poor, for the poor use more spice by far than the rich. One of your honored members is reported to have said "To sustain high prices for food products by means of the tariff, is the greatest hardship lawmakers can impose on the American people." Now, gentlemen, there are 96,000,000 people in the United States and there is not a household in which spice does not enter into its economy. We can do without salt in our food, but we do not want to do so. We can do without sugar in our food, but we do not want to do so; and so we can do without spice in our food-it is not necessary to sustain life-but we do not want to do so. The Italian goes and buys his few cents worth of ham sausage, but without spice it is not palatable. There are no cheap articles of meat foods that are offered such as sausages, hamburg steaks, and the like, that are not made palatable, in fact possible, by the aid of spices. In fact this fact is so potent that when the discussion became general that meat was too high in price for the poor man, our own Department of Agriculture sent its agents through the country endeavoring to instruct the people in the preparation of the cheaper, if not the cheapest, cuts of meats, viz, by cooking them until tender and then making them palatable by the use of spices and savories. In fact, the growth of the use of spices has been remarkable. Some districts which, 20 years ago, used very little, now take tons of them. But some will say that it does not take much spice. True. But it is the constant and everyday use that in the aggregate counts, and this small sum, not on one article of food but on a number, is what makes the burden. When the McKinley tariff was enacted, the workingman paid 5 or 6 cents more for his tin cup, but that lasted him perhaps a year or two; but with spice, add but a cent and the constant use will amount in a year's time to quite a little more than the 5 or 6 cents on his tin cup; and, then, no one escapes, as the use of spice is universal. Mr. HARRISON. I think I recognized the quotation you made about the injustice of imposing a duty upon foodstuffs. Mr. WEIKEL. Yes, sir. Mr. HARRISON. But for my own part, I should hardly think spices were in the category to which reference was then made, because very few of us reckon them as a necessary of life, as you seem to do, and I am not at all sure that if the physicians of the country were polled your position would be sustained in this matter. Mr. WEIKEL. Well, the use of spices is universal. Everyone uses them and they have been used Mr. HARRISON (interposing). And the use of tobacco is pretty nearly universal. 78959°-VOL 6-13-17 PARAGRAPH 679-SPICES. Mr. WEIKEL. But tobacco is used not as a foodstuff and is not used as a food. Mr. HARRISON. Spices are used in connection with food products, but I would hardly call them food products in themselves. Mr. WEIKEL. As I tried to make clear, spices make food palatable. For instance, I took a cut of meat and said that under some circumstances that cut of meat would be said not to be good, but you can take spices and make it palatable—that is, by cooking spices with it. As I said before, we use the spices for making food palatable, and in that way they are necessaries of life. Mr. HARRISON. Are not spices sometimes used for making palatable meat that should not be used? Mr WEIKEL. No; I do not think so that is, under the present inspection laws. That might have been so a few years ago, but I do not think it is so now. Mr. HARRISON. I did not mean as far as the grinder of spices was concerned; that was not meant to be personal, but I have understood that spices were often used by restaurant people in order to make meat seem fit that should not be used at all. Mr. WEIKEL. I do not think so, at least not to the extent it might have happened some time ago, because of the inspection laws that are now in existence. Pepper at the time of Caesar was worth its weight in gold and was as precious, but that day has long passed, and I have seen pepper, for instance, sell as low as 4 cents per pound. It is now worth about 10 cents. Now, gentlemen, a word as to the differential between crude and ground spice. I do not think it safe to disturb the present condition. The spice people are not organized into a trust and can not be for the reason that there is no one house engaged exclusively in the spice business. It is almost without exception carried on as a department and an integral part of another business, to take which would possibly mean the breaking up of the other end of the business. The margin of profit is very small. In fact, there is not a man in the spice business to-day who is making more than a mere salary out of it, such as he could do in any other enterprise in which he engaged. His investment very seldom gives him a return, and were it not for the fact that everyone engaged in the spice business carries some other commodity or commodities along as a side line which is profitable, would he be able to remain in the business. This can be confirmed by examining the reports made by the different corporations engaged in spice grinding, and also from the fact that no new firms are engaging in this business, but the weaker ones are gradually being eliminated by a process of dry rot. If the differential be reduced, the manufacturer has reached his limit. He must fall back on his labor, as he has nothing to come and go on; and although I, for one, would be the last to do anything to push down the laboring man, yet it would be simply a question to him, "Are you willing to work for less on account of what a Democratic administration has done, or shall I close my factory?" One or the other would be inevitable, and so, gentlemen, I repeat that to place a duty on crude spices means that an increased duty should be placed on ground spices, and that means a higher cost on the PARAGRAPH 679-SPICES. food that concerns the poor man every day of his life, or if the differential is not maintained, then unless labor gives way, spices will not be ground here, but abroad. You would get revenue, but when the cost of collecting the small amount which at most would be obtained is deducted, would it be worth the burden and toil you place upon the shoulders of thousands of poor men? TESTIMONY OF R. A. M'CORMICK, REPRESENTING M'CORMICK & CO., BALTIMORE, MD. The witness was duly sworn by the chairman. Mr. MCCORMICK. Mr. Chairman, I have a brief which I would like to have printed, but I would like to call your attention to a few of the vital propositions. This is the third time that I have appeared before the committee, and I offer the committee an apology for appearing so often, but it is because of the fact that it is the wish of the committee, and you, Mr. Chairman, as I understand it, that all questions affecting the tariff be taken up in the order in which they appear in the tariff of 1909. I therefore wish to speak briefly upon the free list, having already filed a brief upon section 20 and section 298. We are importers and manufacturers vitally interested in these schedules and rates, but we do not come to unreasoningly protest against any change, but to give you facts as to the spice trade without prejudice or reservation. Spices have been on the free list on each succeeding tariff adopted by Congress for a generation. That they were first so listed by the exponents of the ultraprotective tariff theory seems quite conclusive evidence that they were then accepted and classed as noncompetitive necessities to comfortable and healthful existence rather than sybaritic luxuries, as claimed by Mr. Gibson, the attorney from New York, who so volubly pleads for heavy duties, and who succeeded in at least giving reasonable ground for the presumption that underlying the brief filed with you he holds a brief from some of the shrewd speculating importers, who see immediate profits by realizing on their stocks, if his advice be accepted for knowing so little of the business and of actual conditions personally, as is evidenced by his words, it is otherwise inconceivable that in the long list of imports now on the free list his altruistic fervor would have singled out this class alone as available for producing revenue. That spices were considered necessities is further evidenced by the fact that all crude and unground spices were put on the free list except cayenne or red peppers and sage leaves. These exceptions were unquestionably made to foster the domestic cultivation of the only spices of all the list which have had or have now a chance of being grown to the advantage of the American farmer. The spice-importing trade, as well as the consumers, are a unit in requesting that you recommend that those spices in the unground state now on the free list be allowed to so remain, and also that cayenne and red peppers in the unground state be included in your recommendations. PARAGRAPH 679-SPICES. Contrary to Mr. Gibson's significant assertion, I am sure that more than 80 per cent of all spices going to the consuming trade are ground in mills of those who make it a business and in that state are distributed to the consumer, reaching him through the retail grocer at prices ranging from 2 to 3 cents per ounce, instead of 5 to 10 cents per ounce, as stated by him. Of course, this does not apply to such articles as Saigon cassia, or cinnamon costing to import in quantities 40 cents per pound, or mace costing from 50 to 65 cents per pound, depending upon variety and quality. Ground spices usually reach the consumer in packages designed to sell at 5 and 10 cents, respectively. A duty of 1 cent per pound will increase the cost of these packages approximately 15 to 18 cents per gross for the 5-cent packages and 30 to 36 cents per gross for the 10-cent packages. If Mr. Gibson's suggestion that the duties of 6 cents per pound prevail, the cost would be increased 90 cents to $1.20 per gross for the 5-cent packages and $1.80 to $2.15 for the 10-cent packages. If you make spices dutiable the consumer will continue to purchase 10-cent and possibly in a few instances 5-cent packages, but the contents will be proportionately less, for the margin in the business is so small that this increased cost must inevitably be passed along to him. The changed conditions will, however, cause the importer and packer great loss in adjusting his cartons, containers, and other expenses made necessary. If you gentlemen decide to recommend a duty on whole spices, in settling upon the rate, due consideration should be given to the large loss in weight by the evaporation of the natural moisture. It is evident that if a duty be levied, the importer and packer will pay the extra duty on water in proportion to the loss in weight, which he must stand when invoicing to the trade, for most of this loss will occur within 60 days after landing and the importing manufacturer and packer can not in that time pass his goods on to other hands who would then stand the loss. The condition is similar to that affecting grain. I find it gives better returns to sell my wheat soon after harvest at 90 cents rather than hold it for three months with the almost certainty of getting $1.05 per bushel. Changing spices from the free to the dutiable list will be a factor small, it is true, but nevertheless appreciable in raising the cost of living. I ask your attention to what has been said in a previous brief for the statement of the danger of abuse to the American consumer of any hospitality you may give to certain lines of ground spices is not overdrawn and is demonstrably true. Cinnamon, cassias, sage, allspice, cloves, black and white peppers are not so greatly susceptible of abuse when imported in the ground state as are red peppers, gingers, nutmegs, and mace, to which we have referred in a previous brief. It is against these particularly that we ask the prohibitive duty to bar out such products in the ground state as would not be allowed entry in the unground. The American manufacturer is making increased efforts to build up his trade with South America and other foreign countries and it is necessary to success that he be placed on an equal footing with England, Germany, or France. |