PARAGRAPH 689-TAPIOCA FLOUR. Mr. JAMES. I do not quite understand the interest that you say he has, for this reason: He says to this committee: "You make a paragraph here that allows tapioca flour and sago flour to come into this country free," and you say that none of it is used for food purposes? Mr. STEIN. Oh, no. I said that less than 4,000,000 pounds is used for technical purposes. Hon. OSCAR UNDERWOOD, Chairman. SIR: Tapioca flour should remain on the free list, where it appears now under paragraph 689. Tapioca is made from roots grown chiefly in Java and the Malay Peninsula. There are none raised in the United States. It is raw material used in the main for food and manufacturing purposes. It does not compete with any domestic product. It can easily be proven that tapioca flour does not interfere with cornstarch or potato starch industries in the United States. It can not compete with cornstarch; they are totally different articles. To begin with, the average price of tapioca flour is $3.25 per 100 pounds at seaboard, against the present price of cornstarch of the Corn Products Refining Co. (Cornstarch Trust) of $1.70 per 100 pounds, freight paid to Eastern States, or delivered in the Middle West (Chicago points). Tapioca costs $3.50 against $1.53 per 100 pounds for cornstarch. Tapioca flour is the raw product from which pearl and flake tapiocas are made. During 1912 approximately 52,000,000 pounds of all kinds of tapiocas were imported into the United States. Of these, about 15,702,000 pounds were in the form of flake and pearl, shipped from the Straits Settlements. About 9,000,000 pounds came from Java in the form of pearl and flake. Over 11,200,000 pounds in the shape of tapioca flour was used exclusively for food purposes. About 12,320,000 pounds were used in the manufacture of envelope gums. About 3,798,000 pounds were used for textile and other purposes. In other words, about 36,000,000 pounds of tapioca in one form or another are used for food. Tapioca gum.-As referred to above, 12,320,000 pounds of tapioca flour are used in the manufacture of envelope and postal gum. This product can not be satisfactorily manufactured from any other raw material. This gum does not compete with any other American product. If not made here, it will be imported from England, closing the tapioca-gum industry here. The only real advocate for a duty on tapioca flour is the Corn Products Co., known as the Starch Trust. The Supreme Court has decided that tapioca flour is not a starch in the case of Chew Hing Lung v. Wise, collector. (See United States Reports, vol. 176, October term, 1899.) It has been stated that tapioca flour competes with potato starch. This is not true, because the full annual production of about 14,000 tons of potato starch in the United States has continued, excepting in years of poor potato crops, selling at 44 cents per pound at present, and frequently at over 5 cents per pound, as against an average price of 31 cents per pound for tapioca flour. Holland and German potato starch alone compete with this American product. About 6,000 to 7,000 tons of potato starch for these countries were imported in 1912 for textile purposes. Why are consumers not buying tapioca flour at more than 1 cent per pound below the price of potato starch? Because tapioca flour will not do the work of potato starch. Tapioca flour has found a unique place for itself by virtue of certain properties which no other similar product possesses. Respectfully, Stein, Hirsh & Co., New York City; J. H. Recknagle & Son, New York PARAGRAPH 689-TAPIOCA FLOUR. STATEMENT BY C. B. HUIET, CHARLESTON, S. C. Hon. OSCAR W. UNDERWOOD, Chairman: CHARLESTON, S. C., February 11, 1913. Referring to Exhibit G of testimony of John H. E. Hull, wherein the latter submitted extracts from certain circular letters issued by me, as a representative of Stein, Hirsh & Co., New York City, dated January 26, March 18, and April 21, 1909, wherein I used the words "tapioca starch," I beg leave to say that the use of the word starch in connection with tapioca was made by me without any authority from Messrs. Stein, Hirsh & Co., or without any indication on their part that such was the product referred to. These gentlemen told me to sell tapioca flour. As I was anxious to find a market for this product, and as I was selling the cotton mills products of various kinds, I assumed that this article, tapioca flour, might best be called tapioca starch, in order to introduce it into the mills. As I never had any practical experience with starches, it occurred to me that I might possibly be able to interest buyers by referring to the product as tapioca starch instead of tapioca flour. Although all of the mills that I visited were users of corn starch and other starches, I have only succeeded in selling sample lots of tapioca flour, in all less than 200 bags, during the several years that I tried to make a market for it. I discovered that the article could not be used as a substitute for starch by the mills, and therefore informed Messrs. Stein, Hirsh & Co. that I could not make any progress with it. I wish to repeat that I issued the circulars in question without the knowledge or authority of Messrs. Stein, Hirsh & Co,. and I now gladly make this statement, so that your committee may know that the reference made in my circulars at the time was without any knowledge on my part of what the article really was. As far as my experience goes, tapioca flour can not be substituted for starch. I also desire to inform you that Messrs. Stein, Hirsh & Co. wired me, requesting me to appear in Washington on February 1, in order to personally give you the facts above stated. Unfortunately I was ill in bed at the time, and for that reason alone was unable to appear. Yours, very truly, C. B. HUIET. STEIN, HIRSH & Co., 358 Washington Street, New York, N. Y. LUDLOW, MASS., February 15, 1913. GENTLEMEN: Referring to the statement made by a starch salesman, June 2, 1909, and referred to as "Exhibit F" in hearings before the Ways and Means Committee, February 1, I wish to say that I have no recollection of such conversation with any salesman. The report that we had in stock 112 carloads of cornstarch is erroneous, as our consumption of this commodity, which never exceeds 10 carloads in any one year, would not warrant our carrying such a large quantity in stock. We also wish to add that we use tapioca flour and cornstarch for two entirely different purposes. Yours, very truly, BRIEF OF J. B. B. STRYKER RE TAPIOCA FLOUR. Mr. CHAIRMAN AND GENTLEMEN OF THE COMMITTEE: When consideration is given to the matter of tapioca flour, will you not bear in mind the fact that this commodity has risen in price (not only in the United States but in England and Europe as well) 32 per cent in the last two years. In 1910 we paid for it $2.75 per 100 pounds. In 1912 we paid for the same grade the price of $3.65 per 100 pounds, and this is the present price. A duty placed on this product, in addition to this rise in price, would work a very serious injury to the consumers, who, like ourselves, have but this one material to depend upon as raw material; nothing else can be used on account of certain gumlike properties contained in tapioca flour, and not found in any other material now available, either of domestic or foreign origin. PARAGRAPH 689-TAPIOCA FLOUR. As you probably know, no tapioca is produced here, and none can be, as nowhere in the United States is there a climate in which the root can be grown from which it is made. Respectíully submitted. LANDSDALE, PA., January 30, 1913. J. B. B. STRYKER. BRIEF OF NATIONAL GUM & MICA. CO., NEW YORK. NEW YORK, February 8, 1913. To the Chairman and Members of the Committee on Ways and Means, House of Representatives, Washington, D. C. GENTLEMEN: As consumers of sago flour and tapioca flour we appeal to you to keep these raw materials of ours upon the free list. In the testimony that has been submitted to you on this subject there is very much that is misleading and erroneous. For example, on page 2802, No. 13, of the Tariff Hearings it is stated: "Tapioca flour and starch, as also cassava flour and starch, are chemically the same as any other starch, and so does sago fall under the category of starches.' This statement is entirely without foundation in fact. Different kinds of starches and flours are by no means the same chemically, physically, or any other way, neither are they interchangeable one for the other except in very few cases. Entirely apart from the flavored statements you have heard from interested parties, one bald fact sticks out like a sore thumb. This fact is, that although cornstarch has for some time been very much cheaper than either sago flour or tapioca flour, we, and very many others, are nevertheless compelled to pay the higher prices for sago flour and tapioca flour because cornstarch will not serve as a substitute. For example, the price of cornstarch to-day is $1.82 per 100 pounds, and about a week ago it was $1.70 per 100 pounds. Notwithstanding this fact we were purchasing and using in our business tapioca flour from 23 cents per pound and upward, sago flour at $2.25 per 100 pounds and upward, and potato flour at over 4 cents per pound. The writer is a chemist who has made a special study of starches, and begs to state that it is a fact well known and accepted scientifically that the various starches above referred to are not chemically the same. It is true they have approximately the same percentage proportions of carbon, hydrogen, and oxygen, but they are no more the same substances than are diamond, graphite, and lampblack, each of which is chemically pure carbon. The physical properties of substances are of the greatest importance. Thus the pure carbon diamond is the hardest known substance, whereas the pure carbon graphite is so soft it is used as a lubricant. In like manner the starches obtained from the various plants each have their own peculiar characteristics which render them valuable in the production of gums, sizings, pastes, etc. This difference in the physical properties of starches also extends to their food value. Very serious errors have been made in the past by supposing that substances which have the same empirical formula have the same food value. The inclosed reprint of the writer from the Journal of the Medical Association will show you how the properties of milk may be entirely changed by colloid chemical differences. Sago and tapioca are not produced in this country, neither is any substitute for them produced in this country. On page 2804, speaking of tapioca flour, Mr. John A. T. Hull stated "I think it is entirely used for starch purposes. I do not think there is a pound of tapioca or sago flour imported to the United States for food purposes.' This statement is incorrect, for if any one of you buy a cake of Fleichmann's compressed yeast you will see that it is prepared with the aid of tapioca flour costing above 3 cents a pound, whereas cornstarch can be had way below 2 cents a pound. We ourselves sell some tapioca flour for food purposes and know there is a great deal used in this manner. It is probably true, however, that most sago and tapioca flour is not used for food purposes, but these substances form essential raw materials of many industries. For instance, in the manufacture of dextrins and sizings which are so largely used in the enormous textile and paper trade. The manufacturers of cornstarch who are appealing to you to put a duty on sago and tapioca mistakenly believe that they will thereby force the industries of this country to use their product in place of sago flour and tapioca flour. They also think that by shutting out these possible sources of competition they can be in a position to advance PARAGRAPH 689-TAPIOCA FLOUR. their own prices. It takes several million dollars to start a plant to manufacture cornstarch, and, therefore, competition against them is not easily made. For the most part, nevertheless, their object will fail, since cornstarch can not replace sago flour, tapioca flour, or potato flour. The only result would be to put an additional tariff burden on the raw materials of industry and on some of the food of the people. We also respectfully request you to consider reducing the duty on potato starch, or potato flour, and on dextrin. We import both of these substances as raw materials for use in our business. American-made potato flour hardly enters as a factor, since the potatoes of this country are primarily used for food. By reducing the duty on potato flour you will simply give us a cheaper raw material to work with. We would respectfully request you to reduce the duty on both potato flour and dextrin as low as it can be reduced, having in view the necessities of Government revenue. I have reviewed some of the testimony and exhibits put before your honorable committee, and for your convenience I will make my comments on separate sheets. I trust that you will give our plea careful consideration, and would point out to you that there is very grave danger in allowing the raw materials of industry to be controlled by any trust or group of manufacturers. We trust you will carefully consider this whole question and decide to leave sago flour and tapioca flour on the free list, which I think will be to the best interest of the whole country, although not so satisfactory to manufacturers of cornstarch; for, as a matter of fact, if cornstarch be advanced in price unreasonably, sago and tapioca flours can easily be used to substitute cornstarch as a food. Very respectfully, yours, NATIONAL GUM & MICA CO., A CRITICISM OF TESTIMONY, BRIEFS, AND EXHIBITS. Sago flour as imported has distinct brownish tinge, whereas potato starch is snow white. In order to replace potato flour even to a small extent, sago flour would have to go through complete rewashing, purification, and bleaching, and some years ago when potato flour was very high in price a manufacturer in this country actually refined imported sago flour and sold the refined article. Sago flour can not be used as potato starch. A great many of the textile mills use enormous quantities of wheat flour, rye flour, and corn flour in place of starch, but this does not mean that wheat flour, rye flour, and corn flour are not also used as food. Your committee should not be misled by the fact that considerable sago and tapioca are used as raw materials for various industries, as well as for food purposes. So-called "Minute Tapioca," which is in flour form, is one of the food forms of tapioca. Sago and tapioca in flake form represent a more highly manufactured form of the product than the sago and tapioca flour. The flake and pearl sago and tapioca are made from the flour by pressing the dampened flour through hot plates. It would seem unreasonable to leave the higher manufactured form on the free list and put the cruder form on the dutiable list just to please corn starch manufacturers, and deliver the industries and starch food of this country over to their tender mercies. Your committee is being somewhat misled as to the so-called wastage or loss in the manufacture of dextrin from starch. Dextrin is made by heating starch with or without the presence of acid, and during the heating the starch loses its moisture, which in the the case of some starches may run as high as 20 per cent. The finished dextrin, however, gains back a great deal of its moisture, and by the time it is sold 6 or 8 per cent of the moisture has usually come back. Furthermore, the loss is usually not as high as 20 per cent. If your committee decides to make a differential between duty on potato starch and the duty on dextrin, it should certainly not be as great as the dextrin manufacturers' request. Their desire is to have free tapioca flour as a raw material, and then be in a position to hold a high price on their dextrin by having competition with foreign dextrin shut out because of a high dextrin duty. We trust your committee will read between the lines and see the interested points of view of the various parties. No tapioca is made in Germany from potato flour, but German potato starch has been made up in little balls that resemble pearl tapioca, and the article has been sold for food. In this country these same little balls could be made up from cornstarch, and, as a matter of fact, would serve just about as well for food as the little balls made from tapioca or from potato starch. PARAGRAPH 689-TAPIOCA FLOUR. Tapioca flour can easily be used in making blancmange and similar puddings, and not only can, but does, substitute cornstarch in the preparation of foods, and has peculiar physical properties which give it a distinct advantage over cornstarch. For cooking purposes cornstarch, however, is most generally used as a household article because it has been widely advertised for many years, and is quite familiar to the people of this country. In Germany, for example, potato starch is used for food purposes because it is cheap. Mr. Hull's statements are, therefore, erroneous. With the possibility of sago and tapioca flour as competitors in the food market, cornstarch will never rise to a prohibitive figure. I will now take up the various arguments in the brief submitted by Hull & Reeve. Claim. Sago and tapioca flour are starches. Answer. It makes very little difference what name the products bear. Your committee must consider the uses of the product and the general welfare of the country. In England corn flour means a powdered cornstarch. In this country corn flour is an entirely different product, being the powdered interior of the corn grain. The mere name of the article should be quite immaterial to your committee. Claim. Sago flour and tapioca flour, as imported, not changed or modified, being starches, are competitive with all starches made in the United States from products of our soil. Answer. Without doubt to some extent sago and tapioca compete with Americanmade starches. This competition is a most excellent protection for the people and industries of this country; for, with normal crops, and an absence of trusts and manipulation, cornstarch will always be much cheaper than sago and tapioca. If the corn crop should be a failure, or trust manipulation become dominant, it will be a godsend to the people and industries of the country to have sago and tapioca on the free list. Claim. Sago flour and tapioca flour, like all other starches, are used interchangeably for starching, sizing, filling, in laundry work, for edible purposes, and for many other purposes. Answer. Starches, flours, gelatines, and a great variety of other substances are used for sizing, filling, stiffening, etc., also for edible purposes. For the best interest of this country our people should have the widest choice in the way of food, and our industries the widest choice in the way of raw materials. Claim. Sago flour and tapioca flour and all other imported starches must substitute some American-produced starch. Answer. This claim is ridiculous on its face, in view of the fact that to-day cornstarch costs only $1.82 per 100 pounds (and recently sold for $1.70 per 100 pounds), whereas sago flour sells for about 24 cents per pound and upward, tapioca from 24 to 24 cents a pound, and potato flour at above 4 cents per pound. If cornstarch could be used in place of these more expensive products their importation would at once cease. Claim Sago flour and tapioca flour are largely imported, and the volume is increasing and, if left free of duty, they will continue increasing. Answer. We certainly trust that the importation of sago flour and tapioca flour, both for food and for manufacturing purposes will largely increase. We also hope and feel sure that the corn industries will fargely increase at the same time. In a huge country like ours there is not only room for both domestic and imported articles, but there is also necessity for both. It will certainly be unwise to burden the food and industry of this country with a tax meant to benefit manufacturers of cornstarch. Claim. Sago flour and tapioca flour and all kindred products are dutiable at the same rate, or about equivalent rates, with starches in all important foreign countries. Answer. I do not see why this country should be governed by the action of the countries referred to, where the agrarian interests or the necessities of the Government revenue have been responsible for the imposition of duty on sago and tapioca. England has no duty, and, therefore, has an advantage over the countries that have duty. In the case of France and Germany it is the object of these respective Governments to make their countries, in so far as they possibly can, dependent upon their own soil for their food products; hence Germany especially has raised barriers against importation of our meat, fruit, etc. As I understand the voice of the people, as expressed in the last election, it was that this country should travel rather toward free trade than toward higher protection, and I think that Congress will be false to its trust if it yields to the arguments of interested parties and places a tax upon these necessary raw materials, sago and tapioca. Claim. Sago flour and tapioca flour are cheaply produced abroad in enormous quantities and threaten the American industry. Answer. Sago and tapioca in no way threaten American industries, because as a rule American cornstarch undersells both, and further American cornstarch is much 78959°-VOL 6-13-20 |