of being compelled to permit their factories to remain idle for days at a time while transferring from one line of work to the other. If it is intended to give the manufacturers the drawback, it ought to be given to them with as little expense to them and their manufacturing concerns as it is possible to do.

The CHAIRMAN. Isn't there great danger of the Treasury being robbed by a proposition of that kind?

Mr. HULL. That is a question, Mr. Chairman, it seems to me, that the committee can work out better than any outsider can. I imagine that it can be fixed so that there would be very little danger of the Treasury being robbed. Of course, you have to have the administrative part of it, to a certain extent, designed upon the absolute proofs, unless you do adopt the French rule of having a certain fixed amount-when, for instance, to a bushel of corn so many pounds of starch.

Another fact that comes in there the by-products of these corn products are free, and yet this virtually levies a tariff on our people in the nature of an extra expense by taking advantage of this drawback.

Now, as I said in the beginning, Mr. Chairman, I am not expert enough in the tariff to go into the administrative features of it with the hope of specially enlightening this committee. What I want to do is to call the attention of the committee to these matters that seem to me to require some changes. The main argument that I desire to make to this committee refers more especially to the question of starches, with sago and tapioca, in the free list. I referred to this matter before the committee on a previous occasion. There is no question in my mind that sago and tapioca flours are starches. They were retained on the free list through what, to my mind, is clearly a misunderstanding of the subject when it was before the Congress, when the present law was enacted. The discussion in the Senate, I think, clearly proves this. Senator Gallinger called attention to the fact that sago flour is used largely in our manufactures. Senator Aldrich replied, "We do not use one single pound for starch, in my judgment. Sago and tapioca flours are used for food."

Senator Aldrich is a great authority on the tariff, and yet I think he is clearly and absolutely wrong in that statement. Further on in the debate, in answer to a statement made by Senator Cummins, wherein the Senator from Iowa was showing that it was used for starch, the following will be found:

Mr. ALDRICH. If the Senator will turn to paragraph 292

Mr. CUMMINS. I have it before me, Mr. President.

Mr. ALDRICH. He will find that all other starch, including all preparations from whatever substance produced, fit for use as starch

Mr. CUMMINS. Precisely.

Mr. ALDRICH. It is dutiable at 1 cent per pound. That answers the Senator's arguments conclusively. I will say that this article is not used as starch, and the Senator can not produce any evidence that it is used as starch. It is used for an entirely different purpose.

The debate proceeded at much greater length, but the Senator from Rhode Island's contention that it is not used as starch is what I desire to especially call the attention of this committee to.

The Supreme Court of the United States in a decision some years ago on an appeal from an appraiser decided that sago flour and

tapioca flour are starches, and a reading of the decision will show that these flours are starches and are admitted free of duty because expressly mentioned in the free list. If they were not expressly mentioned in the free list they would be dutiable. We present in our exhibits on this question what I regard as absolute proof of the character of these flours. Even the firms importing and selling them in this country refer to them as starches, and I call the attention of the committee here especially to the letters inclosed in the brief from one of the leading firms, Stein, Hirsch & Co., in which they expressly appeal to the trade to buy sago and tapioca flours as a starch equal to potato starch. They are treated by all other nations as starches, as shown by the rate of duty levied in the different countries. In Canada 1 cent per pound is levied on starches, rice flour, sago flour, and tapioca flour; Germany levies equivalently $1.62 per 100 pounds on sago flour and tapioca flour, treating them as starches, and also levies the duty whether they are in a crude state or as flour; France, Bulgaria, Roumania, Italy, Russia, Argentina, and Austria all levy a high rate of duty on starches, and specifically include in each case sago and tapioca flours.

Independent of the question of protection and considering only the question of revenue, these flours should be included at as high a rate of duty as any of the starches on account of the enormous increase in importation. The records of the Department of Commerce and Labor show that, in 1882, 7,824,743 pounds of these two flours were imported into the United States, while in 1911, 72,680,218 pounds were imported, making an increase of 10 times the amount imported in the first year referred to. I assume, of course, that no matter what may be the ultimate result of this tariff revision there is sure to be a reasonable duty on the starches, and I am confident that a full investigation by the committee will insure the inclusion of these two flours in the general starch schedule.

As further proof of these flours being starches and not food products, I submit herewith letters from the three leading grocery men in Washington. Mr. John H. Magruder gives three preparations, with the prices attached, as the only forms of sago and tapioca that he handles for food purposes, and stated at the time it was given that he knew nothing about the flour preparations. I will say, further, that he said he also handled German sago and French sago made from potatoes, but all I wanted was to get the tapioca and the sago prepa

rations.

Mr. Burchell, in his letter, gives similar certificates, and Cornwell & Son also. Messrs. F. Rose & Co., of New York City, send us a letter stating that sago and tapioca flours are imported and sold as starches in open competition with all other starches. I submit these letters. here in full, but I do not know that it is necessary to read them.

Mr. HAMMOND. What is the raw product of the sago flour? What is it?

Mr. HULL. Sago is the pith of the palm.

Mr. HAMMOND. The pith of that palm tree is manufactured to make this sago flour or starch, as you call it?

Mr. HULL. It is manufactured. First, it is taken out and treated

Mr. HAMMOND. Just a moment. It goes through a process of manufacture?

Mr. HULL. Yes.

Mr. HAMMOND. Now, is there any difference that you can state between the manufacture of sago flour or starch from the pith of the sago tree, or sago palm tree, and the manufacture of potato starch from raw potatoes?

Mr. HULL. Why, I think that they are treated differently, probably because the pith of the tree has to be, I think, treated quite freely at first on account of its not being a healthful product in its original

state.

Mr. HAMMOND. Well, I think, Mr. Hull, the process is identical. Mr. HULL. It is identical.

Mr. HAMMOND. I think the treatment is identical.

Mr. HULL. I am not conversant enough with the manufacture to answer that question definitely.

Mr. HAMMOND. The same process of manufacture that converts potatoes into potato starch converts the pith of the sago palm into sago flour.

Mr. HULL. I will say that my mind was directed to this only from the point that I was anxious to get before the committee that these are starches, so treated by all of the nations of the world and by all the trade of the United States.

Mr. HAMMOND. I though that possibly it might add to your argument if

Mr. HULL. I am obliged to you for bringing that out.

Mr. HAMMOND (continuing). If it should appear that the process of manufacture is precisely the same.

Mr. HULL. Well, I don't know. I frankly say to the committee that the processes are exactly similar.

Mr. HAMMOND. And it is used for starch by the cotton mills, is it

not?

Mr. HULL. Altogether, nearly.

Mr. HAMMOND. But is not considered so good a starch as potato starch?

Mr. HULL. Well, some of these letters I have inserted in our brief insist that it is equally as good as potato starch; and you will remember Mr. Morningstar, who when the present law was before the Congress appeared before the Senate with a brief insisting that these flours should be treated as food products and not put on the dutiable list, has come before this committee and in his testimony here insists that they are purely starches, not food products, and that it is an outrage to allow them to be free when you tax the German starch. Now, suppose his argument now is that these flours are starches, and ought to be taxed, if potato starch is taxed, at a cent and a half, made by the industries of Germany, these starches made by coolie labor ought to be equally taxed, as I remember his address.

I

Mr. HARRISON. May I ask you a question, for my information? Mr. HULL. Certainly.

Mr. HARRISON. Your contention is that tapioca and sago flours are used chiefly for manufacturing purposes and not as food products? Mr. HULL. The same as starches; yes.

Mr. products are they

made?

Mr. HULL. I think largely in cotton goods.
Mr. HARRISON. I beg pardon?

Mr. HULL. I think largely in cotton goods, in filling and sizing. Mr. HARRISON. Are they used in making dextrines?

Mr. HULL. They can be used with dextrines; yes, sir; and are. But I am talking about their use here.

Mr. HARRISON. And you desire to have us take tapioca and sago flour off the free list and class it in the dutiable list with starches?

Mr. HULL. Yes, sir. And, then, I also desire, Mr. Harrison, further than that, that you fix the free list so it will not interfere with the food products at all by inserting in the free list in those paragraphs-I will come to that a little later-a provision that sago and tapioca in pearl and flake form used for food shall be free.

Mr. HARRISON. Would that-tapioca and sago in flake form-confine the definition sufficiently so that the food product would still remain in the free list?

Mr. HULL. I think there is no question of that, Mr. Harrison, and you can make it very clear; that will keep them on the free list absolutely; and you can make it very clear by inserting in the paragraph on starches, in the dutiable list," including sago and tapioca flours.” That would exclude the flours from the free list absolutely.

Mr. HARRISON. Well, at present starch is in the agricultural schedule?

Mr. HULL. Yes.

cific rate.

Mr. HARRISON. At about 49 per cent ad valorem equivalent to speAnd we observed the other day, when witnesses were before the committee, that only about 2 per cent of the American consumption is imported, so that there is a possibility that the committee may propose to reduce the duty on the starches now carried in the agricultural schedule, and, further than that, the duty on dextrines was reduced from 13 cents a pound to three-fourths of a cent a pound in the chemical schedule; and with the added fact that the cotton manufacturers are getting their rate cut in two you can see that the tendency would be to reduce duties on starches rather than to raise them.

Mr. HULL. I am not advocating a raise of duty on starches, Mr. Harrison, but here is 72,000,000 pounds of these flours brought into the United States in 1911 that come in free as food products, as Congress thought, that are competing with starches from Germany and other countries that pay a duty, as well as with our own starches. I am not arguing the question. In our briefs we have submitted what we believe to be a fair proposition on the question of protection, and I do not conceive that that question is now before us for the reason that this is only preventing what has been a wrong heretofore by the elimination of this product from cheap-labor countries coming in as a food product when it is not a food product in any sense of the word. Mr. HARRISON. Manufacturers have even testified here that if we would put potato starch on the free list they could manufacture dextrines out of potato starch over here and make a big industry.

Mr. HULL. In order to make dextrines, in my judgment, Mr. Harrison, if the committee will allow me to go into that-in my judg ment you have got to have at least one-half a cent a pound more on dextrines than you have on the starches. If you fix the starches at a lower rate you still are compelled, if you make your dextrines here, in my judgment, to levy a higher rate of duty on the dextrines, because of the wastage. In other words, there is a very large wast

age in making dextrines, and if it was a free proposition, equal, the same duty as starches, they could all be brought over and money saved by the manufacture of dextrines here.

Mr. HARRISON. I will say myself that we think probably the schedule ought to fix a higher rate of duty on dextrines than on starches, and it is obvious that the starch duties have got to come down.

Mr. HULL. It is for the committee. I am only trying to make the point here, in this brief, that when you do fix the duty on starches, according to every definition of a starch, according to every analysis of a starch, according to the uses that these flours are put to, they should be included in the starch schedule. Now, as to that rate of duty, I imagine that anything I might say would have very little influence, but as a revenue producer alone, if you have a rate of duty on starches at all, you ought to include these, because you are losing the revenue without doing any benefit to anybody except the man that manufactures these flours and the man that imports them into the country. You have lost the revenue on 72,000,000 pounds that were brought in. If you reduce the duty on starches so that still more starch will be brought in, it is still more important to cover all the different starches that are used in this country.

Of course, the committee understands thoroughly, as I have had the honor of serving with most of them, that my theory of this matter and the theory of the dominant party in the United States to-day are not in entire harmony. In other words, I believe in protection as protection, and the people have decided that they prefer a little change in that respect, and I am not fighting against the change.

I insert these letters here. There is no use to take the time of the committee reading them; but I want to say, Mr. Chairman, in conclusion, that these letters, and the evidence that is submitted in the brief attached, conclusively show, to my mind, that the food products are the flake and pearl preparations only, while the testimony of all authorities proves that the flours are sold exclusively as starches, and I would respectfully ask that the free list be changed so as to omit the words "sago and tapicoa flours," and the insertion of these words, assuming the paragraphs are the same: No. 660, "Sago, when in pearl or flake form, as sold for food"; and paragraph 685, " Tapioca, cassava or cassady, when in pearl or flake form, as sold for food," or some equivalent phrases, because it is a well-known fact that all sago and tapioca sold as food in this country are in these forms. Mr. JAMES. That would admit them free?

Mr. HULL. That would admit them free. In other words, I want to admit the food products free; I am perfectly willing to admit them free. They are not made in this country, and if you levy a tax I think it would be largely a tax on the property, without any corresponding benefit to the people of the United States.

Mr. HILL. Mr. Hull, won't you tell what the difference is between corn starch and these other starches in effectiveness and use and so on? Are they used for separate purposes entirely or can they be used concurrently?

Mr. HULL. They are used largely concurrently; and I will say, Mr. Hill, that so far as these sagos and tapiocas for food purposes are concerned, they can be made so that no one-hardly an expertcan tell the difference between our products and the imported product; and Germany is sending tapioca to us now made from potatoes.