PARAGRAPH 678.

PARAGRAPH 679-SPICES.

Specimens of natural history, botany, and mineralogy, when imported for scientific public collections, and not for sale.

PARAGRAPH 679.

Spices: Cassia, cassia vera, and cassia buds; cinnamon and chips of; cloves and clove stems; mace; nutmegs; pepper, black or white, and pimento; all the foregoing when unground; ginger root, unground and not preserved or candied.

SPICES.

STATEMENT OF W. J. GIBSON, ON THE SUBJECT OF SPICES.

Mr. GIBSON. Mr. Chairman, and gentlemen of the committee, I appear to advocate a duty on unground spices, for the reason that they are luxuries, and so long as we have duties on imports for the purpose of raising revenue for the support of the Government, there ought to be a duty on spices, unground, that being the condition in which they are almost entirely imported.

The spices to which I particularly refer are those included in paragraph 679 of the present tariff act, on the free list. They are: Cassia, cassia vera, and cassia buds; cinnamon and chips of; cloves and clove stems; nutmegs, pepper, black or white, and pimento, all the foregoing when unground; ginger root, unground, and not preserved or candied.

Those are the spices on the free list, and they form nearly the whole of the spices which are imported, as they are imported in no other condition than in the unground condition.

The spices which are on the dutiable list in paragraph 298 are mustard, ground or prepared-mustard is hardly a spice in the strict acceptation of the word-which is dutiable if prepared in bottles or otherwise, at 10 cents per pound; capsicum or red pepper, whether ground or unground, 2 cents per pound; sage, 1 cent per pound. The balance of that dutiable paragraph is "Spices not specially provided for in this section, 3 cents per pound." That is very misleading, but it means that that applies only to ground spices or spices in their ground condition.

To show you that it is simply absurd to put such a clause as that in the tariff, all the revenue derived under that provision of 3 cents a pound for spices not specially provided for in the year 1911 amounted to $1,016, while there were 54,000,000 pounds of the other spices which I have named which were imported and came in free.

The policy of this Government has always been, from the very beginning, that luxuries should pay high rates of duty. Our forefathers at the beginning of the Government said that they did not want to encourage the people in extravagant living or the high cost of living and where they only put 5 per cent duty on manufactured articles, such as woolen cloth, cotton cloth, they put a very high rate of duty upon spices, and they followed out that principle from the beginning of the Government down until 1883, when the policy of protection came in and spices were put upon the free list. Now, to give you an idea of the history of this matter, in the tariff act of March 7, 1804, it imposed a duty on cinnamon and cloves of 20 cents a pound, nutmegs of 50 cents a pound, and mace of $1.25, 78959°-VOL 6—13—16

PARAGRAPH 679-SPICES.

and under the tariff act of April 27, 1816, nutmegs paid a duty of 60 cents a pound, cinnamon and cloves 25 cents, and mace $1. These duties were put on these spices unground, because no revenue would be derived from them if imported ground.

In the tariff act of June 30, 1864, these spices, all the ones that I have named, in the unground condition, had a duty on them from 15 cents up to 40 cents. I won't read that over; it is not necessary, as I submitted my brief. That rate of duty continued, according to my recollection, down until 1882, when, as I say, the idea went into operation of not putting any duty on noncompetitive articles, so they went upon the free list, except cayenne pepper, which was raised to some little extent in Louisiana, and the duty on that was 2 cents a pound. There was also some mace produced, and mustard. Those are the only three articles that paid any duty; the others came in free. I present this matter as revenue measure. When this question was before this committee, before the act of 1909, when the gentlemen in the minority were presiding, I presented the same question to the chairman of the committee in practically the same brief that I have here to-day. I think the committee recommended a duty of 30 per cent ad valorem on these spices. I think that bill passed the House and went to the Senate, and the Senate struck out that clause and substituted for it a clause which had been in the act of 1897, and also in the acts of 1890 and 1883. So I think the minority of this committee were evidently with me then on this duty on the spices that I have named. I assume that the Democratic members of this committee can not well take a lower position on this matter of these spices. I think they ought to have a duty of at least 50 per cent. I observe from reading the proposed bill that the duty proposed by this committee on these spices is from 15 to 20 per cent. With all due respect to you, gentlemen, I think you are making an error in regard to a duty on luxuries. Here is an article that had its origin in the south of Italy, along the Mediterranean shores. The people who indulged in those articles at that time were called Sybarites. There was a city called Sybaritis, where the people were voluptuous and extravagant, and they had recourse to the East in order to get these spices. Spices are used, as you know, to make things more agreeable. They were considered effeminate. They were so considered by our forefathers, and they were not used by the general masses of the people. They do not produce the virile qualities, nor have they any place in that category. I presume you have briefs before you saying that these spices are largely used almost as necessities. Now, so far as I have been able to investigate this matter, these spices are used largely, most largely, in their natural state; less than half of them are ground. A large quantity of them are used in barrooms. You will find cinnamon, cloves, and pimento in most every large barroom in the country. They are used in the household in the whole condition.

As I say, of these spices about 60,000,000 pounds were imported in 1912, and that is just a little over half a pound per capita. Then they are used for perfumes. Oil is made from them, which is used for perfumed soap. There is the oil of cassia, the oil of cloves, and so on, and they are thoroughly identified with luxuries in every sense of the word. They are of no substantial nutriment. They are not produced

PARAGRAPH 679-SPICES.

in this country and could never be. I do not believe they could even be hothoused, so they are a subject for this committee to consider as a means of raising revenue.

The CHAIRMAN. There can be no production of them in this country because they can not be raised here?

Mr. GIBSON. They can not be produced here.

The committee proposes a duty of 15 to 20 per cent. I wish to ask you gentlemen in all fairness, and respectfully, on this subject, how are you going to say to the people "We have put a duty of 15 or 20 per cent on spices, which are luxuries, and we have put a higher duty on the absolute necessities of life, on your clothing?" That presents a category, because we may have to meet that question some time, and it will be an ugly question to meet. We have the assent of the minority of the committee to almost double the duty which you gentlemen have seen fit tentatively to put into the bill that you have proposed.

The grinders want these spices to come in free. We all know that spices used to be ground in the family. This matter of grinding spices is not a manufacture. In the State of New York it has been held that the grinding of coffee is not a manufacture; that it does not change the character or the name of the substance. These spices, when ground, do not cease to be spices; they are simply ground spices. You have coffee on the free list, and the roasters of coffee and the grinders of coffee may just as well come in and say to you, "We want a protective duty on roasted coffee and on ground coffee." I do not know that they have ever done it. I know that it certainly never has been granted.

The only reason that the grinders want the duty on ground spices is that it enables them to put a higher price on that particular condition of spices and prevent any from coming in. I do not fancy there is any loss because we have ground coffee, and there is no ground coffee imported. Ground coffee is free. The customs authorities have held that ground coffee is coffee, and coffee is on the free list, and it includes ground coffee.

So I present this question to you gentlemen, not only on these particular spices, but I offer these because they are more forcibly illustrative of the necessity, to my mind, of the duty. If you put 5 cents a pound duty on these spices, you get a revenue that goes directly into the Government of over $3,000,000. If you want to put on the duty that you propose in your tentative bill here, you would not get a duty of more than about $600,000.

The CHAIRMAN. If we were to put a higher rate of duty than proposed on these spices, would it not have a tendency to cut off importations and thereby lessen the revenue?

Mr. GIBSON. No; and I will tell you why. I should have gone further and said the opposition to these spices being dutiable comes from the grocers and the grinders. They are not expensive at wholesale. They run about 5 cents a pound up to about 18 cents, the highest. I think that nutmegs are probably now about the highest. They are not very far apart in their price. You go into a drug store or you go into a grocery store-these spices are consumed in small quantities-you ask for an ounce of spices, of cinnamon, er cassia, or cloves, and they charge you 10 cents an ounce for it. That

PARAGRAPH 679-SPICES.

is at the rate of $1.60 a pound, an article which probably does not cost them more than 15 or 20 cents a pound. There is an enormous profit on it, and that is where the grocer makes a large part of his profit. I understand the grocer claims he makes his expenses out of his spices and his coffee.

Those are things for which large prices can be charged. Of course, I understand that any increase in the price probably would reach the consumer at some point, but I doubt that if you were to put a duty of 5 cents a pound on these spices it would increase the price to the consumer at all; and it would put a very considerable amount of revenue into the hands of the Government.

The CHAIRMAN. You do not think it would stop importation? Mr. GIBSON. No, sir; I do not. The spices are bought by the people, as a rule, who can afford to pay for them, and so it probably would not affect them at all.

If you will pardon me for saying so, I think your committee is making a great mistake in putting luxuries so low. I think all luxuries ought to bear a high rate of duty. By a high rate I mean at least 50 per cent, because every regard ought to be paid to the man who has to struggle to get the absolute necessities of life, and they do not need these.

The farm hand in the country never knows the character of a spice. And it is people in this condition, men raising families, with four, five, or more children to educate, and doing it upon three or four hundred dollars or less a year. Éverything that the Government can do in the way of lessening their burden ought to be done, not only as to these spices, but with the others. Take oils that are on the free list, like attar of roses, and rosemary, a great lot of them, which I think are absolutely luxuries, and that ought to pay a high rate of duty.

It had been the policy of this Government to do that for 60 years prior to the war; it was a wise policy, a frugal policy, and it ought to be followed. I have appended to my memoranda a list of different spices.

There is one thing on this same schedule that I think ought to go on the free list, and that is cod liver oil for medicinal purposes. My reason for asking this committee to put cod-liver oil for medicinal purposes on the free list is that it is a medicine, a really nutritive food for consumptives and rickety children. While you might put cod-liver oil as a product on the dutiable list, you could say, 'Cod-liver oil not specially provided for, 12 cents a gallon"; then you could on the free list put "Cod-liver oil for medicinal purposes." It will be a great boon to the poor and their families. It is the one medicine-and I have pretty correct information on the subject that supplies tissue and helps to build up rickety and decrepit children; it is also, as I say, a great boon to consumptives. While the duty as proposed is not very high, yet the very moment that you put a duty on an article it adds to the cost of its getting to the people who need it.

I thank you for your attention.

Mr. PAYNE. You advocate putting a duty on these spices because they are articles of luxury and not necessity?

Mr. GIBSON. Yes, sir.

PARAGRAPH 679-SPICES.

Mr. PAYNE. And you class them with liquor. I should hardly agree with you on that classification. They are nearer the line of necessaries than liquor.

Mr. GIBSON. Yes.

Mr. PAYNE. And they are not very far differentiated from coffee. A man could get along without coffee, although it appears on most breakfast tables. These spices appear also on most of the tables in America. Would you advocate putting a duty on coffee?

Mr. GIBSON. I would not advocate it now. But I think so long as we have duties it would be a good duty to put on.

Mr. PAYNE. I want to say to you that we put this duty on because we were looking around for revenue.

Mr. GIBSON. Yes.

Mr. PAYNE. We had made such severe cuts in the tariff, we had put so many articles on the free list that were paying in high revenues, that we were looking around for revenue.

Mr. GIBSON. I appreciate that.

Mr. PAYNE. And we struck spices and put them on. The bill went to the Senate with that provision in. Afterwards we incorporated a corporation tax.

Mr. GIBSON. Yes.

Mr. PAYNE. Which has brought in a revenue of $27,000,000 per annum or more, and we found we did not need this duty on spices. In the meantime there was a good deal of complaint from consumers in the country that it was going to raise the price of their spices, and for that reason, and also for the reason I had myself, I agreed to nearly every amendment in the Senate which reduced duties in the original bill-I was favorable to taking off these duties. And we did take them off.

Mr. HILL. May I ask what your business is?

Mr. GIBSON. I am a lawyer. I have always been interested in tariff questions. I came before this committee last time.

Mr. NEEDHAM. I wish everybody was interested.

Mr. HILL. Do you not think this would add directly and specifically to the cost of living?

Mr. GIBSON. No, sir.

Mr. HILL. You find these spices, certainly pepper, on every table at which you sit down. These spices are sold in every grocery store, all over the United States.

Mr. GIBSON. Yes.

Mr. HILL. The bulk of them. They are a part of the regular stock of a grocery store.

Mr. GIBSON. Yes.

Mr. HILL. And they are sold to every householder, practically, in the United States.

Mr. GIBSON. Yes; so is tobacco, and many other things.

Mr. HILL. Would it not be in direct violation of the party pledge to reduce the cost of living by taking these off the free list and treating them as luxuries?

Mr. GIBSON. I do not think so, for the reasons I have stated. You spoke of coffee.

Mr. HILL. Yes, and tea.