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I make application to have it especially provided for on the free list. We have tendered the acid manufacturers an order for 600 tons, 200 tons for three years, but they say the demand is not sufficient for them to undertake this manufacture, and consequently they will not accept the order. If any manufacturer in this country would make it, we would be all right, but with the present 25 per cent duty we can not touch it. We shut down six months ago, after having tried it for two years, with a heavy loss to ourselves. The article is not likely to be made in this country because it is used in Germany in a very large way in the manufacture of sulphur dyes which are patented and not manufactured in this country.
The CHAIRMAN. I understand you to say, Mr. Queeny, that the difficulty of meeting foreign and German competition has been for the past six months.
Mr. QUEENY. No, sir. We shut down six months ago. We tried it for two years and imported about 400 tons.
The CHAIRMAN. When did you commence the manufacture?
Mr. QUEENY. We commenced the manufacture of the intermediate product, into which this enters, two years ago last January.
The CHAIRMAN. And you continued until six months ago?
Mr. QUEENY. We continued it for two years at big loss to ourselves. Twenty per cent duty, which is the duty on coal tar preperations, not medicinal, can be paid, and yet you can import it cheaper by 30 per cent than it can be manufactured in this country.
The CHAIRMAN. How much would you use in this country?
Mr. QUEENY. We imported about 200 tons.
The CHAIRMAN. Do you import all of it?
Mr. QUEENY. We import all of it. There is no other use for it. The CHAIRMAN. What industries use it?
Mr. QUEENY. In Germany it enters into sulphur dyes which are patented in that country and can not be made in this country; consequently the use there, in addition to the use for the manufacture of saccharine, is very large, whereas in this country it can only be used in the manufacture of the intermediate product called "saccharine.”
The CHAIRMAN. How do you get the information by which you come to the conclusion that you can not make it under the present duty unless 30 per cent is added?
Mr. QUEENY. Because we placed our contract with the German manufacturers for that intermediate product for the coming year. We had to give it up.
The CHAIRMAN. Is there any change in the price now and the price two years ago?
Mr. QUEENY. It is a trifle cheaper. You mean the price of the product into which this enters?
The CHAIRMAN. Yes.
Mr. QUEENY. No. It is the same price, but the acid is a trifle. cheaper. We got the benefit of the reduction in the last year's importation, but even with that we were at a disadvantage. The freight and the duty put us out of business in that article.
Mr. DALZELL. I understand this is not in the present tariff at all. Mr. QUEENY. It is not provided for at all.
Mr. DALZELL. What you want to do is to have it inserted, and have it put on the free list?
Mr. QUEENY. Yes; to have it especially provided for.
Mr. BOUTELL. Under what schedule is the 25 per cent duty now? Mr. QUEENY. Under chemical compounds the general blanket schedule of 25 per cent on chemical compounds. We pay duty not only on the acid, but on the drums. That is, under the ad valorem rate that applies to the packages as well as the contents.
Mr. UNDERWOOD. What finished product is this for?
Mr. QUEENY. Saccharine.
Mr. UNDERWOOD. If this were put on the free list, would that enable a reduction to be made on the finished product?
Mr. QUEENY. A reduction can be made on the finished product now, because the duty is equal to the selling price to-day. That is especially provided for. The competition in this country by the German manufacturers and their representatives in this country keeps the price of saccharine-the finished product-down to its present figure. Mr. UNDERWOOD. If you made a reduction, then, on the finished product equal to the amount gained by putting this particular chemical under a duty
Mr. QUEENY. It so happens that the duty cuts no figure in the selling price at all, because the duty is $1.50 a pound and the selling price is $1.50 a pound, so that the duty on saccharine could be reduced if thought advisable. But I am making application just for the crude material with which to manufacture the article; and as I say, we had to shut down our plant six months ago because we could not afford to continue the manufacture.
Mr. UNDERWOOD. By putting this chemical on the free list, is it expected to enable you to add foreign markets, or is it simply for home consumption?
Mr. QUEENY. Simply for home consumption. It is doubtful if we could enter foreign markets. Such a thing is possible, but we have not contemplated it for the reason that we have not got it down to a price where we could compete. We have the plant already installed. We worked two years, as I say, and at a big loss to ourselves; but sentiment cost us pretty dearly. We entered into that manufacture for the reason that the representatives of the foreign manufacturers bought up all the crude product and actually forced us into that position, so that if we wanted to import the intermediate product two years ago we could not buy a pound in Europe. They might do the same thing at any time.
Mr. HILL. Are the dyes which are patented in Germany also patented here?
Mr. QUEENY. I presume so, for the reason that they are not manufactured here. I have the names of those dyes that are patented, but they are not manufactured here.
Mr. HILL. They would be patented by the German manufacturers here?
Mr. QUEENY. Yes; patented here. They protect themselves in every country.
Now, one more product, under the coal-tar preparations, paragraph 524
The CHAIRMAN. That is an item on the free list?
Mr. QUEENY. Yes; on the free list. The article we wish to import and engage in the manufacture of is pyronitrochlorobenzol. It is
quite a long name, but you will find some equally long in that same paragraph.
The CHAIRMAN. Do you find that name in the paragraph?
Mr. QUEENY. No, sir; it is not there; but there are some others equally long.
The CHAIRMAN. Under what paragraph does that come in now? Mr. QUEENY. At the present time it comes in as a coal-tar preparation, not medicinal, or dye, at 20 per cent; and we ask to have that inserted in the free list for practically the same reason as the other, because this article also enters into the manufacture of patented dyes in Europe. We wish to manufacture phenacetin. Instead of importing the intermediate product as we are to-day, we wish to import the raw material and manufacture it.
The CHAIRMAN. Is that a by-product, or does coal tar enter into that?
Mr. QUEENY. No; it is a direct chemical; but in the manufacture of that chemical another is made, for which there is no use in this country, and consequently no American manufacturer would undertake its production because there is no outlet for this other product, which is equally as large as the product which I have just mentioned, because it enters into the manufacture of sulphur dyes-the ortho, which is not manufactured in this country.
Mr. HILL. Is not the reason why they are not manufactured here the fact that they are manufactured by foreign inventors?
Mr. QUEENY. I have not studied the aniline dyes industry at all. It is a little out of our line, but it is assumed that because they are patented they are not manufactured in this country; and in connection with the manufacture of this product the other is also made, and consequently is not likely to be manufactured in this country at all, at least for some time, if ever.
Now, when the Dingley bill was passed in 1897 this product was known but was not used commercially, or it is more than likely it would have been inserted in the same paragraph, because there are others used in the same manner for the manufacture of medicinal preparations. The raw material is not now imported into this country at all.
Mr. DALZELL. Would you like to have it inserted in paragraph 524 by name?
Mr. QUEENY. Yes; by name, specifically.
The CHAIRMAN. None of it is manufactured in this country at the present time?
Mr. QUEENY. None of it manufactured, and none that is imported. Mr. BOUTELL. Did you give the reason why it is not manufactured in this country?
Mr. QUEENY. Yes; because there is no demand for it.
Mr. BOUTELL. You have a demand for it?
Mr. QUEENY. We have a demand for the finished product, but we import the intermediate product.
Mr. HILL. Why can you not manufacture the intermediate product in this country?
Mr. QUEENY. Because it can not be without this product here. Without the pyronitrochlorobenzol the intermediate product can not be manufactured. The raw product is this article that I am asking to have inserted in the free list.
Mr. BOUTELL. Why is it that that is not produced in this country? Mr. QUEENY. Because, as I have just explained, in this manufacture of pyronitrochlorobenzol the ortho benzol is also produced in equal quantity, and there is a large demand for that product in Europe for the manufacture of these patented dyes. If they undertook the manufacture of this article that we are asking for, they would have no outlet for this other product, and consequently could not manufacture to compete with the German manufacturers. Both products must be made at the same time, because one is a by-product, or made at the same time with the other.
Mr. BOUTELL. Then I understand as to the reason why what we call the raw material is not produced in this country, that it is for commercial reasons, not because it could not be manufactured here? Mr. QUEENY. I suppose it is, but it could not be manufactured at a price that would enable the manufacturer in this country to compete with the German manufacturers, for the reasons I have stated. Mr. DALZELL. You contend, as I understand, that the same reasons that induce the putting of the articles named in paragraph 524 on the free list would operate to put this on?
Mr. QUEENY. Yes, 524; practically so.
Mr. UNDERWOOD. To put this article on the free list, which I understand is a raw material for the manufactured product, would that justify the reduction of the duty on the main product without interfering with the business?
Mr. QUEENY. I presume it would, because it would be practically on a parity with the foreign manufacturers in the production of that article.
Mr. GRIGGS. Then the finished product might be put on the free list?
Mr. QUBENY. Hardly.
Mr. GRIGGS. You say it puts you on a parity?
Mr. QUEENY, On a parity in the process of manufacture, but we have other expenses far in excess of the German manufacturers' expenses in the production of any chemical. At present we are relatively infants in the chemical industry. We need about fifteen years more to get on our feet. By the time of the next tariff revision proposition we will probably be in better shape.
Mr. UNDERWOOD. If this were put on the free list, how would it affect the finished product without detriment to the main industry? Mr. QUEENY. I would say about 50 per cent of the present dutythe present duty on that product is 55 cents a pound.
The CHAIRMAN. Do you know what the equivalent ad valorem is? Mr. QUEENY. The equivalent ad valorem would be the price in Germany to-day is about 50 cents, 5 marks; the duty is 55 cents a pound.
The CHAIRMAN. You can figure that out.
Mr. QUEENY. The idea is to manufacture a chemical that is not manufactured in this country at the present time: instead of importing the intermediate product, to manufacture it direct; and we feel we should be encouraged in that direction, since we are competing with the German products, which they have controlled for years.
Now here is a product, paragraph 653, salacin, at the present time on the free list, not manufactured in this country, manufactured exclusively in Germany and England; manufactured from the willow,
plenty of which material there is in this country, but we can not compete with Germany and England on that product. I ask that a duty of 25 per cent be levied to assist.
The CHAIRMAN. Can you manufacture with that duty?
Mr. QUEENY. I think so. The consumption goes into many thousands of pounds.
The CHAIRMAN. Why is the duty necessary?
Mr. QUEENY. The expenses in Europe in Germany and England are very much less than they are in this country for the manufacture of any chemical product, so much so that it is foolhardy to attempt to compete.
The CHAIRMAN. This is used in the manufacture of other articles? Mr. QUEENY. No, sir. It is strictly a straight medicinal preparation. There is plenty of raw material in this country-willow; as you well know, that is what it is made from, the willow tree-as we have experimented and I know spent quite a sum of money in the endeavor to manufacture it, but we gave it up. We did not install a plant such as we have for the other products, but we worked it out in the laboratory. We can not do it without protection.
The CHAIRMAN. What amount is imported?
Mr. QUEENY. I presume about 20,000 pounds a year.
Mr. QUEENY. Yes; from 15,000 to 20,000 pounds a year. The price of that is $4 a pound, so that it runs into quite a little bit of money. I am satisfied that the manufacture of that article would be undertaken in this country if some protection was given.
The CHAIRMAN. Do you recommend an ad valorem duty?
Mr. QUEENY. Yes, sir; of 25 per cent.
The CHAIRMAN. Is there any chance of undervaluation of anything of that kind, with respect to that article?
Mr. QUEENY. Well, there are only three manufacturers in the world at the present time. The valuation is pretty well understood. My idea for the tariff all the way through is more for a specific than for an ad valorem rate, in order to avoid those conditions; but I suggest 25 per cent because of other importations coming in at that rate. Mr. DALZELL. What do you say is the importation?
Mr. QUEENY. Twenty thousand pounds.
Mr. DALZELL. It is $16.000 worth, or 6.000 pounds.
Mr. QUEENY. Even if it is only 6,000, why should these goods be manufactured on the other side when they could be manufactured in this country?
Mr. HILL. The price averaged for some years $3.10, and last year it dropped to $2.60. What is the reason for that?
Mr. QUEENY. I do not know. It is about two years since we experimented on it, and gave it up, and it just occurred to me on the train coming down here to ask to have that taken out of the free list and given protection.
Mr. HILL. It started in at $1.48 and ran for six years, and the highest it got was $2.39, and then for about six years it ran at $3.50, and suddenly dropped to $2.60. Can you give an explanation?
Mr. QUEENY. I can not. I know it has ranged as high as $4 a pound in this country. It is sold by the agents of the foreign manufacturers in this country. I know that the market price for years was $4 a pound. That has been the market price in the United States for