Take the case of lemon extract. To comply with the standards enunciated by the Department of Agriculture, a gallon of standard extract of lemon contains 111.8 fluid ounces of 190 proof alcohol83 per cent absolute alcohol-which costs $2.28 with 190 proof alcohol at $2.60 per gallon.

This extract contains a gallon of this extract contains 6.4 per cent fluid ounces of oil of lemon, 5 per cent by volume, which costs $1.07 at $3 per pound for oil of lemon, which is the present price.

This makes a total cost of raw material in a gallon of standard extract of $3.35. Of this cost $1.83 represents the internal-revenue tax on the alcohol used.

In other words, 54 per cent of the present cost of the gallon of lemon extract is tax. Now, if you add to this a duty of 20 per cent ad valorem on the oil of lemon used, 61 per cent of the cost will be tax, and this tax the consumer would have to pay.

Mr. HARRISON. Using the alcohol as a solvent, could not denatured alcohol be used?

Dr. BAER. We can not.

Mr. HARRISON. Because it is used in some instances as a food product afterwards?

Dr. BAER. Yes, sir; then, of course, it would be a very simple thing; anything that is used as a denaturant would very likely harm the flavoring ingredients-the lemon.

In the second place, there is the possibility of the redistilling of the alcohol in a small way by the possible consumers where they bought it in larger quantities, and use the alcohol as a beverage. If that could be prevented we could save on the tax by having a paid inspector in our factories; we would be willing to pay the inspector's salary ourselves.

Mr. HARRISON. Of course, the lemon oil is now on the free list. Dr. BAER. Yes; the lemon oil is all on the free list.

Mr. HARRISON. We propose to put a tax of 20 per cent ad valorem on it.

Dr. BAER. The price of lemon oil to-day is $3.25.

Mr. HARRISON. So that, as a matter of fact, you are in no worse a position so far as the internal-revenue tax is concerned than you were before.

Dr. BAER. No, sir; 54 per cent on a gallon of extract.

Mr. HARRISON. So far as your exporting trade is concerned our chemical schedule contained a drawback clause to reimburse you for the internal-revenue tax.

Dr. BAER. In this country on a gallon of lemon extract that costs $3.35 there is an internal revenue tax of $1.83. That males 64 per cent of the cost of the lemon extract. If you put on a 20 per cent ad valorem duty at the present price of lemon oil you will bring the cost up to 61 per cent, which is higher than

Mr. HARRISON. So far as I am concerned I think the internal revenue tax on alcohol where it is used in manufacturing, where you can use denatured alcohol is disproportionate, but you can not touch that without cutting down the internal revenue from alcoholic drinks. Dr. BAER. By putting on an increased tax, you make the manufacturer bear the burden of that tax. Take a 10-cent bottle, which is the size purchased by the average person. We sell a hundred gross to one gross of 25 cent. On a bottle of vanilla extract that would

make a difference of 2 cents, and on a bottle of lemon extract probbly 5 cents on a 10-cent bottle. Is it right that a little article like vanilla extract of which the average housekeeper will use from four to six bottles a month should carry that enormous tax?

Mr. HARRISON. So far as I am concerned, the proposed tax upon lemon was primarily imposed because lemon oil is also used in the manufacture of perfumes.

Dr. BAER. Very little. The amount that goes into perfumes is very small. The part that goes into a bottle of perfumery will not amount to 1 cent. And it would allow us to reduce the strength of the extract which the consumer would eventually pay for, and if you would investigate the matter which we have submitted to you we believe you will see the wisdom of eliminating these duties as applied to vanilla beans and the essential oils of cassia, lemon, lime, and anise. The CHAIRMAN. The committee will consider your suggestions very carefully when they come to frame the new bill.

Hon. O. W. UNDERWOOD,

Chairman Committee on Ways and Means.

SIR: Supplementing the remarks of Dr. S. H. Baer on the subject of vanillin, and in order that the nature of this article may be thoroughly understood, I beg to advise that vanillin is the flavoring principle of the vanilla bean, or that which gives the desired flavor to the so-called vanilla extract.

The synthetic vanillin on the market is made from cloves and is identical in every respect with the vanillin in the vanilla bean.

Therefore, synthetic vanillin being a chemically pure product, when used in the manufacture of flavors makes a purer product than that made from the vanilla beans, by reason of the conditions under which the beans are gathered and cured in the tropical countries where they are grown. The term "pure extract of vanilla," as applied to extracts made from beans only, is the result of regulations issued by the Bureau of Chemistry, which prohibit that term being applied to flavors made from synthetic vanillin, although the latter is by far the purer product.

Respectfully,

JNO. F. QUEENY, President Monarch Chemical Works, St. Louis.

STATEMENT 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 in opposition to the general proposition of the revision of the tariff. In response to that 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 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?

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. 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 laundrysoap industry concerning these several items. You will notice that we have made this table of two divisions. The principal 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 we recommend to be placed upon the free list, and with the exception of talma rosa and geranium, which have been reduced under the Underwood bill to 20 per cent ad valorem.

Mr. HARRISON. You are speaking of all, as if the ingredients of soap making have been taken off the free list and a tax put on by 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 proper divisions as to which we had a specific recommendation. 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 bill does not apparently mention the items of the Underwood bill, the items appearing under paragraph 580 of the Payne-Aldrich bill, under paragraph 491 of the Underwood bill, 15 per cent ad valorem. It would seem to be indicated that it was intended to put a duty upon them. 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 laundry grease upon which tax is made, 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. That it was intended to put a duty upon them of 15 per cent?

Mr. HARRISON. Certainly. I will state that the present law has a duty of 25 per cent, so that this is a reduction from 25 to 15 per cent. 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.

Mr. HARRISON. This bill does not amend that 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 precede 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 schedule first printed, and then, fearing that the new designations might be deemed to cover these things which had previously been put 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 entering upon the lower half of this printed table, you will observe that there was a reduction in the bills 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 two reductions suggested in that bill upon those items, we were willing to rest upon the proposition that those reductions would be made. If, however, 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 appear upon the lower half of the page are concerned.

In that connection I recall Mr. Harrison's statement that 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 this 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. It does not counterbalance that effect.

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 reduction 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 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 appeared 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 the 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:

The bill mentioned a reduction upon articles which enter into the manufacture of soap. The second most important material is caustic potash, which we have cut from one-half to one-quarter of a cent, the soda ash from three-quarters to one-eighth, the borax from 2 cents to one-eighth of a cent, castor oil from 25 cents to 20 cents, sodium silicate from three-eighths to one-eighth of a cent, talcum from 35 to 15 per cent, and linseed oil from 15 to 13 cents.

An endeavor was made to reduce the cost of manufacturing soap, and the only issue that you have, as I take it, with the committee is that we impose a tax upon coconut and the essential oils, but they are just low revenue duties and were put on only for that purpose.