PARAGRAPH 541-COFFEE. Average price of spot Rio 78 on July 1 for last 20 years 9.44. NOTE. These statistics are issued monthly and made up from figures of the Coffee Exchange of the City of New York. We suggested that they be filed for reference. Compliments of Steinwender Stoffregen & Co., 87 and 89 Wall Street, New York. JUNE 1, 1911. BRIEF OF R. E. HILLS, DELAWARE, OHIO. HOUSE OF REPRESENTATIVES, Hon. OSCAR UNDERWOOD, House of Representatives. DEAR MR. UNDERWOOD: I am taking the liberty of sending you herewith a letter from Mr. R. E. Hills of the V. T. Hills Co., wholesale grocers, of Delaware, Ohio, relative to the valorization of coffee. Of course I do not know whether any further tariff legislation is contemplated at this session of Congress, but I thought it appropriate to get the suggestion of Mr. Hills to you. I know Mr. Hills personally, and he is a very competent and successful business man and gives much attention to public questions. Thanking you for any attention you may be able to give this matter, I am, Yours, very respectfully, Hon. FRANK B. WILLIS, House of Representatives, Washington, D. C. FRANK B. WILLIS. DELAWARE, ОHIO, July 11, 1912 MY DEAR MR. WILLIS: I have been considerably exercised recently, and indeed for some time past, by the situation in this country in connection with the price of Brazilian coffee. You are aware, without doubt, of the fact that the price of Rio and Santos coffees in this country to the consumer has been increased just about 100 per cent since the valorization scheme has been in operation, largely as the result of the scheme. This is not particularly a matter which concerns the wholesale or the retail dealer in this commodity. Our profit is largely governed by percentage arrangement, and therefore, on coffee selling to the retail dealer at 24 cents we make more profit per pound than if we sold the same goods at 12 cents, but, in the interest of the consumer, it is a matter of concern to the dealers. I notice the Government has been embarrassed recently in one department by another department bringing suit against a stock of this coffee in New York City. I notice also that France has gone after the same parties for the same reason. Now I am not much of a statesman, but it has occurred to me in thinking over the situation that the proper way to deal with Brazil in this matter is by means of retaliatory legislation. If reciprocity is good why not use a little negative reciprocity in this kind of a case. The solution seems simple, which would simply be of levying an import tax on coffee coming from a country levying an export tax on the same goods, and I would favor making the import tax 100 per cent larger than the export tax from the producing country. The immediate effect of this of course would be to increase the cost of these goods to our consumers, but the ultimate effect would be to encourage the importation from countries located in Mexico, Central America, and the northern part of South America, which to-day produce as good coffees as we are getting now from Santos. It has taken Brazil something like five years (I have not the dates at hand) to bring about the present conditions which are such as show a profit to the producers in Brazil and a tremendous profit to the syndicate which has handled the loan and purchase. I figure that in the course of a few years on the plan that I suggest we would be importing the bulk of our South American grades of coffee at a cost to our consumers of not over 60 per cent of what these goods cost them now. It may be, Mr. Willis, that this is a question you have thought of and thought out much more fully than I have, and if my suggestions are not worth considering or for any reason are entirely impracticable, I would not ask you to consider them further, but I am impressed with the fact that the Government of Brazil and the government of three of their individual States and the syndicate of European and American capitalists, who have been parties to this deal, have reaped enormous profits and the consuming public has paid the bill, and it seems as if we of the United States are PARAGRAPH 541-COFFEE. sitting still and drinking our usual morning cup of coffee with perfect equanimity and acting as if we were entirely willing to be parties to this transaction. Yours, sincerely, LETTER OF T. E. JAMISON, ROANOKE, VA. Hon. OSCAR W. UNDERWOOD, R. E. HILLS. ROANOKE, VA., December 20, 1911. Chairman Ways and Means Committee, Washington, D. C. DEAR SIR: I have been requested to address you in reference to the situation on coffee, and as I am writing Hon. Thos. Gallagher, I herewith inclose to you copy of my letter, which expresses my views in reference to coffee. If I can be of further service, please command me. Yours, very truly, Hon. THOS. GALLAGHER, M. C., Washington, D. C. T. E. JAMISON. DECEMBER 20, 1911. DEAR SIR: I beg to acknowledge receipt of your favor of December 15, and note very carefully what you have to say in reference to coffee. There is no question in my mind but what the coffee market has been manipulated in the last two years in such a manner as to advance prices very, materially and to exact from the consumer more money than, in my judgment, is necessary, as when you take into consideration the amount of coffee in sight including the amount in the hands of the valorization committee there is no scarcity of coffee. I suggested a plan to Hon. G. W. Norris some time ago to place an internal revenue tax on all dealers in coffee that handle more that 200,000 bags, based on 130 pounds to the bag, or 26,000,000 pounds annually. Any excess of this quantity, up to 50,000 bags additional, or 6,500,000 pounds, to bear one-half cent per pound internal revenue tax. The tax then to increase in multiples of one-half cent per pound on each additional 50,000 bags, or 6,500,000 pounds. All coffee bought on exchange anywhere in the United States to be counted as spot coffee. The object of this plan is to allow all dealers in coffee to do a very large volume of business without paying any internal revenue tax and to permit all coffee on import to be free of duty. This plan is absolutely fair to all dealers, and in my judgment, would prevent any concern from cornering the market and controlling the price of coffee. I have been informed that the valorization committee has over a million bags of coffee in storage in New York. Under this plan the valorization coffee, if the law were effective, would bring a revenue to the Government under this plan of more than $4,000,000. I can not help but believe that the valorization scheme is responsible to a large extent for our present high price on coffee and if this is true, which I believe it is, the Brazilian Government has exacted from the consumers of this country on account of the valorization scheme millions and millions of dollars. It would be hard to estimate the amount, but as this country consumes from nine to eleven pounds of coffee per capita, based on 90,000,000 people, that would be 900,000,000 pounds of coffee. No. 7 exchange standards have advanced about 6 cents per pound in the last two years, and according to this estimate it would amount to $54,000,000. If the above plan were adopted it would prevent at any time in the future any cornering or manipulation of prices, for the reason that no one dealer could accumulate large quantities of coffee without paying an internal-revenue tax; while, on the other hand, any dealer could continue to import coffee free of duty. It has been suggested that a better way to handle the coffee situation would be to allow this country to import up to the limit of consumption and in addition to this quantity to place an import duty. This, in my judgment, would have a tendency to induce large moneyed interests to purchase large quantities of coffee, for the reason that when they had controlled the amount up to the limit of consumption any additional imports would pay a duty which would encourage and foster speculation and would assist in helping to corner the coffee in this country. I have given the coffee situation very careful study for the last two years, and honestly believe that the plan suggested would solve the problem of most of our troubles in reference to coffee. I doubt exceedingly if there are half dozen dealers in this country that would handle more than 26,000,000 pounds of coffee annually. PARAGRAPH 543-COIR YARN. I therefore trust that you may find some fruit in my suggestion and that you may be able to work out a plan that will be effective. If I can be of further assistance, I will gladly come to Washington and go into the matter with you more thoroughly. Yours, very truly. PARAGRAPH 542. Coins of gold, silver, copper, or other metal. PARAGRAPH 543. Coir, and coir yarn. COIR YARN. TESTIMONY OF FRED M. CLEVELAND, REPRESENTING JOSEPH WILD & CO., AND HEYWOOD BROS. & WAKEFIELD, WAKEFIELD, MASS. The witness was duly sworn by the chairman. Mr. CLEVELAND. Mr. Chairman, I wish to speak in regard to the free list, in regard to two items. We, manufacturers of cocoa mats and matting, request that coir yarn, or cocoa yarn or fiber, which are imported free of duty under section 543 of the free list, be left upon the free list in any revision of the tariff which may be suggested by your committee. The materials that we use in the manufacture of doormats and cocoa mattings are not products of this country at all. The entire supply is produced on the Malabar Coast of India and on the Island of Ceylon, with probably more than 90 per cent of the production being on the Malabar Coast. There is no cocoa fiber made in this country or its dependencies, and no cocoa yarn is spun in this country. Cocoa yarn and cocoa fiber are imported free of duty into Germany, Belgium, and Great Britain, where there is extensive manufacturing of cocoa mats and cocoa mattings. The prices paid in these countries for the labor in manufacturing mats and mattings are very much lower than the prices paid in the United States, and any duties placed upon the raw material of the American manufacturers will be a most serious handicap to them in competing against the steadily growing sale of mats and mattings imported into the United States from these countries. We could not stand under any duty on those in competition with the manufacturers in foreign countries. Mr. HARRISON. Does not your product come into competition with the mattings made out of the Japanese and Chinese straws? Mr. CLEVELAND. Not at all, sir; it is different kind of matting; very limited in its sale. Mr. HARRISON. Does it come into competition with the floor coverings made out of wire grass in Minnesota? Mr. CLEVELAND. It has been put largely out of business by the mattings made out of wire grass, made in Minnesota. We sell very little matting as compared with what we used to, for the reason that the wire-grass matting is very much cheaper than the cocoa matting can be made; there is still a limited use for cocoa matting, and you will probably find it in any hotel, a strip laid down on a rainy day. The CHAIRMAN. Go ahead with your statement. PARAGRAPH 543-COIR PARN. Mr. CLEVELAND. The next topic which I wish to take up is section 713 of the free list of the tariff act of 1909, the second clause of which reads as follows: Sticks of partridge, hair, wood, pimento, orange, myrtle, bamboo, rattan, reeds, unmanufactured, India malacca, joints, and other woods not specially provided for in this section in the rough, or not further advanced than cut into lengths suitable for sticks for umbrellas, parasols, sunshades, whips, fishing rods, or walking canes. We respectfully request that this clause be amended by the omission of the words, "reeds unmanufactured." Reeds are manufactured from rattan, and the present wording of the tariff makes a conflict between the free list and section 212 of Schedule D, under which reeds are subject to duty. The CHAIRMAN. What has been the ruling of the courts as to that; - which section did they make apply? Mr. CLEVELAND. The customs authorities have construed that reeds of sizes suitable for the manufacture of whips one-quarter of an inch in diameter and larger should be allowed free entry under this clause in the free list. Such reeds can not be unmanufactured, as they are made only by the process of splitting rattan, and they ought not to come in free of duty, as should rattan itself. A tax now is proposed on reeds smaller than one-quarter of an inch. The CHAIRMAN. Then, if we followed your suggestion we would throw some of these reeds that are now admitted free of duty into the tax list? Mr. CLEVELAND. You would, sir. The CHAIRMAN. Now give us the reason why you think that ought to be done. Mr. CLEVELAND. The reason is this: These reeds are not unmanufactured; they are not a natural product; they are made only by the process of splitting rattan. Under the present administration of the tariff as it stands to-day a very large percentage of the reeds which are allowed free entry, one-quarter of an inch in diameter and larger, are not brought in for the manufacture of whips, but used for the manufacture of furniture and for other purposes. The CHAIRMAN. What rate of duty is there under the present section; what percentage? Mr. CLEVELAND. They pay 10 per cent ad valorem, under section 212 of Schedule D. Mr. HARRISON. And what amendment did you propose? factured." reeds unmanu Mr. HARRISON. How much of that class of goods is being made in this country to-day, reeds unmanufactured? Mr. CLEVELAND. I should say perhaps $750,000 worth. Mr. HARRISON. How much is imported as free? Mr. CLEVELAND. As free? The CHAIRMAN. How much is being imported as free, which comes in free, the free portion of this? Mr. CLEVELAND. I do not know that I can tell you that exactly. Mr. HARRISON. $913,000 worth. The CHAIRMAN. Coming in free, and you can manufacture $750,000 worth? Mr. CLEVELAND. About that; yes, sir. PARAGRAPH 543-COIR YARN; The CHAIRMAN. Why do you want that taxed? Nine hundred dollars worth coming in that shape, and you are making $750,000 worth out of it. Why do you care whether it is protected or not? Mr. CLEVELAND. For the reason that the prices at which those large-sized reeds are brought in and sold are so low that they keep our prices down to a level which is too low. The CHAIRMAN. It is only $900 worth? Mr. CLEVELAND. $900,000 worth. The CHAIRMAN. Oh, I was mistaken about that; about $900,000 worth coming and about $750,000 worth manufactured? Mr. CLEVELAND. Approximately, I should say. Mr. Chairman, it seems that there was some misunderstanding in regard to the time that we were to be allotted, and I have here two briefs, one in regard to cocoa mats and mattings, and the other in regard to reeds and. canes. If it is agreeable to the committee, I will not take any more time to read those, but I will file them. The CHAIRMAN. You may file them and they will be printed in to-day's proceedings, and we will consider them. We will now hear some gentleman representing McCormick & Co., of Baltimore. BRIEF OF HEYWOOD BROS. & WAKEFIELD Co., JOSEPH WILD & Co., Darragh & SMAIL. The COMMITTEE ON WAYS AND MEANS, House of Representatives, Washington, D. C. We, the undersigned, manufacturers of cocoa mats and mattings, request that coir and coir yarn, or cocoa yarn or fiber, which are imported free of duty under section 543 of the free list, be left upon the free list in any revision of the tariff which may be suggested by your honorable committee. Cocoa yarn and cocoa fiber are the materials used in the manufacture of cocoa mats and mattings. The entire supply is produced on the Malabar coast of India and on the island of Ceylon, with probably more than 90 per cent of the production being on the Malabar coast. There is no cocoa fiber made in this country or its dependencies, and no cocoa yarn is spun in this country. Cocoa yarn and cocoa fiber are imported free of duty into Germany, Belgium, and Great Britain, where there is extensive manufacturing of cocoa mats and mattings. The prices paid in these countries for the labor in manufacturing mats and mattings are very much lower than the prices paid in the United States, and any duty placed upon the raw material of the American manufacturers will be a most serious handicap to them in competing against the steadily growing sale of mats and mattings imported into the United States from these countries. HEYWOOD BROS. & WAKEFIELD Co., By FRED M. CLEAVELAND. JOSEPH WILD & Co., By HENRY ANDERSON. The COMMITTEE ON WAYS AND MEANS, NEW YORK, January 29, 1913. House of Representatives, Washington, D. C. GENTLEMEN: Referring to section 543 of free list, tariff of 1909, we beg to indorse the views expressed in brief presented by Messrs. Heywood Bros. & Wakefield Co., of Wakefield, Mass., and Joseph Wild & Co., of New York, as to the retention of coir yarn and fiber on the free list. We are, gentlemen, Your obedient servants, DARRAGH & SMAIL. |