Verona Chemical Asks Congress For Tariff Protection-1908

                                                                                                                     Newark, N. J., December 3, 1908.
Mr. Sereno E.  Payne,
Chairman Ways and Means Committee, Washington, D. C.

Dear Sir:  As manufacturers of fine chemicals we desire to call the attention of the Committee on Ways and Means to the following unfavorable conditions and inconsistent interpretations of
the tariff of 1897 which have the tendency to hinder the development of the organic chemical industry of the United States.

In order to establish and place upon a sound basis the industry, the following points must be taken into consideration:

1. The raw materials necessary to the industry should be placed upon the free list and a duty introduced on the finished articles, the rate of which should be determined, as nearly as possible,
in proportion to the amount of labor necessary for the production of the intermediary, and from these of the finished articles, and further, the increased expenses.

As examples of raw materials of the entire chemical industry which enjoy a rate of duty by the tariff of 1897 entirely too high, we would like to mention the following: Sulphuric acid, bichromate
of soda and potash, soda ash.

According to the data given to the committee by the firm Schoellkopf, manufacturers of sulphuric acid, the cost of production of 66° B. sulphuric acid equals $6.66 per ton. The present duty of
one- fourth cent per pound (Schedule A, 1) means practically a protection of more than 50 per cent ad valorem, as the selling price of 66° acid in England, Belgium, and Germany is about 40
cents per pound. The cost of transportation of this product from Europe to the United States equals at least $5 per ton, so that this manufacture can be maintained without any protection
whatsoever, with a profit of over 50 per cent. We therefore request the committee to place sulphuric acid upon the free list. A very similar condition exists in the cases of the bichromates and
soda ash, and we recommend that the duty on the former should be reduced to at least one-half cent per pound (Schedule A, 62 and 74), and on the latter to at least one-eighth cent per pound
(Schedule A, 78). As organic chemical raw materials, the primary distillation products of coal tar,for example, benzol and toluol, are of great importance. The products are used extensively and
generally as solvents. We respectfully call the attention of the Committee on Ways and Means that the request of the Barrett Chemical Manufacturing Company for a duty of 7 cents per gallon
on these products is entirely too much. However, to encourage the consumption of coal tar produced in the United States, it is of peculiar interest to place a duty on the intermediary products of
the coal-tar color industry. We respectfully suggest therefore to fix the duty on raw materials, such as benzol, toluol, and their homologues, naphthalene, etc.. at a maximum of 5 per cent ad

2. Under Schedule A, 2, we find:

All alcoholic perfumery, including cologne water mill and other toilet waters and other toilet preparations of all kinds,   containing alcohol or in the preparation of which alcohol is used, and
alcoholic compounds not specially provided for in this act, sixty cents per pound and forty-five per centum ad valorem.  

Also Schedule A, 67:

Medicinal preparations containing alcohol, or in the preparation of which alcohol is used, not specially provided for in this Act, fifty-five cents per pound, but in no case shall the same pay less
than twenty-five per centum ad valorem.

We beg to state that there are a great number of chemical products that are used for the manufacture of perfumery preparations, medicinal products, coal-tar colors, etc., which are produced
by the employment of alcohol or in which alcohol enters as a component part. Now, in order to increase the consumption of alcohol in the United States, we respectfully recommend to insert or
add to the above the following paragraph:

All products, chemicals or others, which contain alcohol, or for the production of which alcohol is used, fifty-five cents per pound and twenty-five per centum ad valorem.  

It should be immediately stated in this connection that products fall under this paragraph whenever it can be shown that the same are usually produced in the country where they are
manufactured by the help of alcohol. For example, we may mention the case of salol, which is to-day imported without the payment of the alcohol duty, because the importers certify that their
article is especially prepared for the United States market, using another solvent for crystallizing purposes than alcohol, which is usually employed in European countries, such as Germany.
We especially request that heliotropin pay a duty of 55 cents per pound and 25 per cent ad valorem, as it was proven, according to a test case tried in France, that this product can only be
purified commercially by crystallization from alcohol.

3. We beg to call the attention of the committee to the fact that the tendency has been manifested recently to class synthetic substitutes for natural products, and which synthetic substitutes
can without contradiction only be designated as "chemical products."

For example: Synthetic camphor versus natural camphor, both free. There is absolutely no doubt that in the interest of the chemical industry it is essential that substitutes of this character are
subjected to the usual duty of chemical products. There is absolutely no doubt that in the interest of the chemical industry it is essential that substitutes of this character are subjected to the
usual duty of chemical products. We find a very complicated situation in the case of the essential oils and one that will increase day by day. To-day we meet with synthetic neroli oil, synthetic
cassia oil, synthetic oil of bitter almonds, synthetic oil of jasmin, synthetic oil of origanum, synthetic oil of rose, etc

According to the interpretation of the existing tariff these synthetics are admitted free of duty, the same as the corresponding natural oils, or what is equally harmful to the industry of the United
States, natural or supposedly natural oils are frequently strengthened or mixed with similar synthetic components.

Examples: Lavender oil with benzyl acetate, cassia oil with cinnamic aldehyde, rose oil with geranoil, etc.

We therefore respectfully recommend that all essential oils, whether natural or synthetic, and which we now find under the free list, No.. 626 oil of almonds, anise seed, caraway, aspic or spike
lavender, bergamot, cayeput. cassia, cinnamon, cedrat, jasmin, fennel, juniper, lavender, lemon, limes, mace, neroli, orange, ottar of rose, thyme, and origanum, pay a duty of 25 per cent ad

In this connection we may state that all these oils are used solely for the production of articles of luxury. Further a duty as above mentioned would act as a stimulus for the cultivation of the
necessary plants, fruits, etc., in this country.

Several of the above-named oils do not come to the United States directly from the land of cultivation, but are produced usually by distillation in some other country, such as in Hamburg,
Germany, where the corresponding plants, leaves, fruits, etc., are sent for this purpose. For example: Oil of almonds, anise (Russian), caraway, cinnamon, juniper, etc. As an exception to the
above, we recommend that the oils of citronella and lemon grass, the raw materials of which can only be grown in tropical climates and which can only be distilled in three districts, that is, at
the regions of growth, should remain on the free list.

These oils are used as raw materials in a large way for the manufacture of other chemical products.

Now, in order to explain to the committee why it is that manufacturers of chemical products in the United States, as against European makers, such, for instance, as those of Germany, must
contend with general and indispensable expenses, which are higher in every way, we beg to mention, for example, the following for comparative purposes:  

Wages for the unskilled man. Germany, 50 to 75 cents per day; United States, $1.50 to $1.75 per day. Skilled or specially trained labor, Germany 75 cents to $1.25 per day; United States, $2.50 to
$4.00 per day.

It may be fairly stated that the cost of installation for the manufacture of fine chemical products is double here in the United States compared to Germany. Expenses for maintenance and repair
are fully three times as much.

We further recommend that it is far more appropriate and rational to place a specific duty and not an ad valorem duty on all chemical products, especially for those products imported in a large
way. Also, as changes of the most radical and far-reaching kind may occur in a very short time and unexpectedly, not only in the process of manufacture but also in existing conditions, such as
a great decline or great enhancement of the value of raw materials, whether natural or otherwise in primary and often distant markets, we urge that for the progress and building up of the
chemical industry in general a special board of scientific and technical men, if possible, men also trained in the science of chemistry be appointed to serve a term of years, before which any
manufacturer, and at any time, can present a case for consideration. This board should then with the least possible delay be heard, and its resolutions be passed upon in the house of
legislature. In other words, on account of the peculiar conditions in the chemical industry, as mentioned above, the American manufacturer should have access to a board or commission
without delay at all times. It will be over eleven years since there has been any revision in the tariff, and in that time such radical and far-reaching changes can occur, and have occurred, in the
chemical industry due to the new inventions, new conditions, etc., that a tariff based on the conditions of 1897 is entirely unfair and out of keeping with conditions in 1909, twelve years hence,
and we claim that a space of this duration without practically being able to act in any quick and decisive manner is too long, and not to the best interest of the chemical manufacturing industry
in the United States.

          Very respectfully, yours,
                                                                                                                       Verona Chemical Co.
                                                                                                                       Edwin Kuttroff, President

Reference:  Tariff Hearings Before the Committee on Ways and Means of the House of Representatives, 60th Congress, December 4, 1908, pp. 3859-3862.


                                                                                                                      Newark, N. J., December 3,1908.
Mr. Sereno E. Payne,
Chairman Ways and Means Committee, Washington, D. C.

Dear Sir:   Supposing that the tariff on vanillin will also be considered during the present session, we beg to call your attention to the following: We are manufacturers of vanillin and at present
have over $50,000 invested for the production of this article alone, so that the committee will appreciate the fact that a just ruling—that is, one commensurate with the conditions—is of the
utmost importance to us.

The present selling price in the United States is from 32 to 35 cents per ounce. In Europe vanillin sells for about 23 to 25 cents per ounce. If the latter prices prevailed in this country it would be
impossible to continue the manufacture without a loss, as was proven when about a year ago the most reckless competition forced the selling price down to 25 cents per ounce, and two or
three manufacturers were compelled to discontinue. The difference in cost of production of vanillin between Europe and the United States is due to several facts. Besides the higher cost of
labor and the higher outlay for general expenses, such as insurance, gas, water, etc., the cost of materials necessary for production of vanillin are from 20 to 30 per cent higher here than
abroad. Further, it must be remembered that the three or four American manufacturers are limited, by this higher cost, to the consumption of the United States, which is probably somewhat
over 500,000 ounces annually, while we know of one factory alone in Germany making double this amount. This has an influence of far-reaching importance on the cost of production here,
since the manufacturer’s fixed charges remain practically the same whether his output is 200,000 ounces or four times that amount.

We regard it of the utmost importance that the entire quantity of vanillin for consumption in the United States be manufactured in this country, because vanillin was one of the first of the fine
chemicals produced in the. United States, and it would be a serious blow to the advance of the fine chemical industry in this country if the duty is lowered to a point where importation will be
possible. Competition among the American manufacturers does not permit a higher price than 32 to 35 cents per ounce, which is considered by all, whether manufacturer, dealer, or
consumer, to be very fair and moderate. The effectual preservation and conservative encouragement of the American manufacturer requires a continued specific duty on vanillin of not less
than 25 cents per ounce. It may then be stated that the opportunity for the collection of revenue for the United States is excluded, but this argument can be met by stating that we already pay a
duty of 25 per cent on two or three of the materials used in the manufacture of vanillin, so that, indirectly, the Government obtains revenue proportionate to the amount produced, which is all
that should be expected and desired.

         Very respectfully, yours,
                                                                                                                                  Verona Chemical Co.,
                                                                                                                                  Edwin Kuttroff, President.

Reference:  Tariff Hearings Before the Committee on Ways and Means of the House of Representatives, 60th Congress, December 4, 1908, pp. 3884

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