PARAGRAPH 650-SURGICAL INSTRUMENTS, ETC. "3. To study the problems of paint technology, electrical engineering, and electrochemistry, and to institute economies and improvements in the manufacture of fertilizers and general chemicals. "4. To train and instruct graduates of scientific and technical schools and other qualified persons in industrial research, and to aid them in obtaining work for which they are particularly fitted; and in general to do and perform every lawful act and thing necessary or expedient to be done or performed for the efficient and profitable conducting of said business, as authorized by the laws of Congress, and to have and exercise all powers conferred by the laws of the District of Columbia upon said corporation." TESTIMONY OF HENRY C. LOVIS, NEW YORK, N. Y. The witness was duly sworn by Mr. Harrison. Mr. Lovis. Mr. Chairman and gentlemen of the committee, my appearance is with reference to paragraph 650, and the addition thereto to permit hospitals generally to import goods for their use free of duty. We are manufacturers of medicinal and surgical plasters, absorbent cotton and surgical dressings, bandages and articles in that line, and a large proportion of our trade is with hospitals. In the cost of our goods labor forms 25 per cent of the cost of the finished goods at the factory. To permit foreign goods to enter, we would have to compete with labor cost of 50 per cent under American cost, and as to the merchandise elements in these costs, foreign merchandise is not less than 12 per cent cheaper than we have it here in America. That would together make a rate of 25 per cent, which is the present rate of duty assessed on our class of preparations. And from those figures it is perfectly evident that it is necessary to have 25 per cent duty to begin to equalize the difference in cost between home and foreign production. We therefore feel that under a free rate of duty we should promptly lose our hospital business, and we don't see why we should when the largest proportion of those institutions are private institutions, charging fees. It is only a minor proportion that can be called charitable, but all of those are not entirely so. They have some proportion of patients which pay. And municipal hospitals, which are generally regarded as free institutions, if I am not misinformed, many of them have a definite rate per week, and as a matter of fact a patient, unless he makes a statement that he is a pauper, does not get treatment absolutely free of charge. We therefore feel that the hospitals generally should not have the privilege of that free rate of duty, to the great detriment of home industry. Mr. HARRISON. Of course it is true, is it not, that even in those hospitals which make a charge for such patients as are able to pay, none of it is diverted to anybody's profit; it is only used to run the institution; there are no profits made out of these charges, are there? Mr. Lovis. In some I believe there are. Mr. HARRISON. Well, in private hospitals, of course they are immensely profitable, but these are not comprised within the class of institutions in which these witnesses have desired us to give free entry for surgical instruments. Mr. Lovis. We have no objection whatever to the entry free of duty of the articles for hospital use, provided those hospitals are de PARAGRAPH 650-SURGICAL INSTRUMENTS, ETC. voted solely to charitable work and without pay from patients, on articles that are not produced in this country. Mr. HARRISON. How many hospital institutions are devoted solely to charity, and no pay patients? Mr. Lovis. There is a minor proportion; I am not prepared on the exact number. That is all I think of; thank you. BRIEF PRESENTED BY MESSRS. SEABURY & JOHNSON, OF EAST ORANGE, N. J. Protest against any amendment of paragraph 650 or any other provision by which hospitals and similar institutions are to be permitted to import, directly or indirectly, medical and surgical apparatus, appliances, utensils, instruments, preparations, and pharmaceutical products, free of duty. COMMITTEE ON WAYS AND MEANS, House of Representatives, Washington, D. C. GENTLEMEN: We are manufacturers of medicinal and surgical apparatus and preparations, supplying our wares to hospitals, who consume a very large percentage of the output of our factory; to surgeons, physicians, and afflicted people; to the medical and surgical departments of the United States Army, Navy, and Marine-Hospital services, etc. This trade with the hospitals (municipal, public, or private) is a valuable one, and its loss through a successful competition by foreign goods through their being admitted duty free would very seriously affect this industry, which has taken many years of exploitation to build up. We prepare for and sell to these interests millions of yards of aseptic and antiseptic gauze, vast quantities of absorbent cotton and medicated cottons, splints, and other dressings and appliances used in hospitals and medical and surgical practice. We therefore beg leave respectfully to protest against medical and surgical apparatus, appliances, utensils, instruments, and preparations and pharmaceutical products, imported by or for hospitals and other institutions being admitted to the United States free of duty. We also respectfully protest against any reduction in the duty existing in the present tariff law covering those items, our protests being based as follows: First. The rate at which these goods are sold by us to municipal, public, or private hospitals and similar institutions returns only an exceedingly small profit, as competition amongst the various American manufacturers is very keen and prices to hospitals are made with the knowledge that considerable of their work is done on a philanthropic basis, which therefore demands the closest possible prices. Second. That such goods admitted free of duty to the United States would probably most largely come from England, Germany, and Austria, where labor is but 40 per cent to 50 per cent of American wages and the cost of materials much less than here. Were these foreign goods to enter duty free the trade of the various American manufacturers with these hospitals would be substantially wiped out, as the American manufacturers could not compete against the lower foreign cost of production and a reduction in wage scale in American factories to the foreign level would be impractical. Third. The greater number of hospitals throughout the country are private or semiprivate institutions, charging fees for treatment given, though some of these have departments wherein free treatment is accorded. A minor number only give treatment without pay, but this latter class usually are municipal or State institutions, supported by city or State from funds derived from the American taxpayer. The foreigner contributes nothing thereto. Fourth. It would be impossible to separate hospital supplies used for patients who pay for treatment from hospital supplies used in the same institutions for charity patients. Any such attempt would be open and prone to gross abuse. Fifth. Many physicians and surgeons obtain their medical and surgical supplies for use in their private practice from hospitals with which they are connected, thus securing supplies at the low prices made to hospitals, and should foreign goods for hospital use secure entry free of duty, further serious effects to the American industry would result through the practice here mentioned. Sixth. Many millions of dollars are invested in the United States in various American factories devoted to the preparation of medical and surgical apparatus, utensils, in PARAGRAPH 650-SURGICAL INSTRUMENTS, ETC. struments, and preparations, including our own, and these have been built up by these large investments supplemented by the devotion to scientific study and the use of expert knowledge-mechanical and chemical skill-by specializing in these lines, so to speak, to the end that we and they should attain highest development in the art of preparing these medical and surgical supplies. The importance of these home industries is appreciated by the professional and lay people throughout the land. Their importance to the municipal, State, and Federal Governments in times of peace as well as in times of war should not be underestimated. Seventh. Apart from the absolute necessity that the duty on this class of goods shall be maintained in order that such American industries shall continue to live, we further protest against favoritism to foreign interests of free entry, which foreign interests neither pay our taxes in times of peace nor fight our battles in times of war. Eighth. Any amendment sought which introduces the terms "apparatus, appliances, and preparations," can be interpreted to include all the medical and surgical manufactures heretofore mentioned. We would, however, offer no objections to such amendment of paragraph 650 of th present tariff law as would permit the entry free of duty of philosophical and scientific apparatus, utensils, instruments, and preparations not made in this country for hospitals devoted to giving treatment free to those patients unable to pay therefor. Respectfully submitted. NEW YORK, JANUARY 29, 1913. SEABURY & JOHNSON, FRANCIS D. DONOGHUE, M. D., EOSTON, MASS., SUBMITS BRIEF. Hon. OSCAR UNDERWOOD, BOSTON, MASS., February 1, 1913. Chairman Ways and Means Committee, Washington, D. C. DEAR SIR: Owing to the lack of Government and State endowment, such limited medical laboratory investigations as are being made are being made by groups of men picked out by special interests or those who have acquired special opportunities. So that until such time as more liberal appropriations are made and expended under Government supervision the physician of the United States, both inside and outside of institutions, should be encouraged to utilize the work and discoveries of the great European laboratories without penalty. There can be no reason advanced for favoring institutions which does not apply with more force toward the treatment of the medical profession as a whole. The ordinary practitioners of medicine are already handicapped in cities by hospital competition, and the number who can afford to get and use the most up-to-date equipment are becoming fewer in proportion. The standard of the medical profession is, and will continue to be, the standard of the average practitioner. The discoveries of great laboratories are only of importance if they can be applied by the average practitioner to the conditions of the average men. The discovery of some great truth is entitled to fame and distinction, but unless it is available for the average man it does not fulfill its highest good. The necessity of aiding the physician practicing away from medical centers is obvious. The number of medical men who, from the desire to advance their profession, make study trips to the medical centers of Europe is a considerable number. On their travels they see new means for the relief or cure of suffering. They should have at the very least an opportunity to bring in free of duty for their own use such instruments or materials that they have been willing to purchase for use in their work and not for sale. Conclusion: In the interest of the working medical practitioner paragraph 650 should be amended to permit not only hospitals but physicians in general practice to import surgical and scientific appliances and medicines for their own use and not for sale free of duty. Respectfully submitted. FRANCIS D. DONOGHUE, M. D. PARAGRAPH 650-SURGICAL INSTRUMENTS, ETC. BRIEF OF H. CARSTENS MANUFACTURING CO., CHICAGO., ILL. Hon. OSCAR UNDERWOOD, CHICAGO, January 30, 1913. Ways and Means Committee, Washington, D. C. HONORABLE SIR: Referring to the free clause No. 650 we, as manufacturers of surgical instruments, most respectfully and seriously beg to enter our protest against including the hospitals in this clause, for the following reasons: First. If the tariff on manufactured metal goods, including surgical instruments, is to be lowered, we think it ought to be the same for everybody interested in the manufacture, sale, or buying of surgical instruments. Second. To give hospitals the preference by including them in the free clause would inevitably result in the hospitals becoming dealers by importing direct and selling surgical instruments to the doctors on their staff, without corresponding benefit to the patients, who are not likely to be charged lower fees on account of this preference. Third. With few exceptions, hospitals are conducted for profit, bringing good returns on the investment and, compared with their yearly v lume of business, the amount of charity work done is insignificant. Hospitals devoted to charity work exclusively rarely pay much, if anything, for their instruments or equipment, but obtain such mostly through donations from manufacturers and dealers. Fourth. While the lowering of the tariff from 45 per cent to the proposed 25 per cent would be a very hard blow, the including of the hospitals in clause No. 650 would mean total ruin to every manufacturer and dealer in surgical instruments and thereby destroy a very useful and, we feel free to say, very necessary industry. This would drive out of employment several thousand people now engaged in this work, without corresponding benefit to be derived, a fact which we can not conceive to be the object of any administration. Very respectfully, H. CARSTENS MANUFACTURING CO., Per H. CARSTENS, President. BRIEF OF THE SCIENTIFIC MATERIALS CO., PITTSBURGH, PA. PITTSBURGH, PA., January 30, 1913. Hon. OSCAR UNDERWOOD, House of Representatives, Washington, D. C. DEAR SIR: It has come to our attention that your committee is to be asked to put all scientific instruments and materials for use in research laboratories on the free list. We make such supplies our sole business, and are unable to see any good reason for bringing in any such materials free of duty. As the matter now stands, educational institutions have this privilege, and practically all other laboratories are conducted for profit in one way or another. The majority of our sales are made to the large corporations, whose laboratories are just as much a part of their manufacturing operations as any other part of their business. It would be impossible to satisfactorily carry out any provision which would attempt to make any distinction between laboratories conducted for research and those doing regular analytical work, because practically every laboratory does or could do something which might be called research, and thereby take advantage of the benefits. We are under the impression that paragraph No. 650 of the tariff, now in force, will permit any institution incorporated solely for scientific purposes to import apparatus free of duty. This seems to amply guard against the tariff interfering with the advancement of science where not conducted for profit. Very truly, yours, SCIENTIFIC MATERIALS CO., Vice President and General Manager. PARAGRAPH 650-SURGICAL INSTRUMENTS, ETC. BRIEF OF THE AMERICAN STERILIZER CO., ERIE, PA. Hon. ARTHUR L. BATES, M. C. ERIE, PA., February 1, 1913. DEAR MR. BATES: We note report in the morning paper of plea made by Dr. Clover, of St. Luke's Hospital, New York, in behalf of certain hospitals, before the House Committee on Ways and Means, for the free list to be amended to include free importation of apparatus, utensils, etc., for medical and surgical purposes. In this connection, while we are entirely agreeable to a liberal reduction in duty on this class of apparatus-personally we would not object to having the present 45 per cent cut to 25 per cent we want to register a most emphatic protest against duty free, and this for very vital reasons, one or two of which we will endeavor to give you briefly: (1) These same hospitals and charitable institutions throughout the country are being supported, very largely, from surplus earnings of American manufacturers, some of whom would be practically wiped out of business if the proposition went through. (2) The institutional purchases of this class of apparatus forms so small a part of their annual budget of expenses (and their records will prove this) as to make it a matter of little importance to the life of the institutions, but of vital importance to manufacturers in this line. (3) As an illustration of what this would mean, we have in our employ a German to whom we pay $3 per day. He has been with us approximately seven years. Prior to that he had only been in this country working a little less than six months. He was a mechanic (coppersmith) in the old country, a man of family, and he told us that in American money he never received in excess of $1.25 per day; his family could never have more than the barest necessities, and was obliged to live in a rented cottage. During the seven years he has been with us, he has saved enough to buy and pay for a little home, is educating his children, and laying by a little for old age. This is only an illustration, and the difference of $1.75 per day that we are paying him might be multiplied many, many times to cover similar cases, and I am confident if the good Dr. Clover understood the circumstances of this case alone, the American in him would plead for a continuation of American conditions. German ships can land our class of goods in New York City at as low rate as we can from Erie, and, as a practical man, you can readily see where the 100 per cent in advanced wages over German and other competitors would place us. We do not ask for any undue protection, but we do beg of you to throw your influence in favor of a sufficient protection to cover the difference in cost between American and foreign labor. In anticipation of your favorable reply, we beg to remain, with best wishes, AMERICAN STERILIZER CO., By GEO. F. HALL, President. STATEMENT SUBMITTED BY BECTON, DICKINSON & CO., RUTHERFORD, N. J. RUTHERFORD, N. J., January 27, 1913. OSCAR W. UNDERWOOD, Chairman Ways and Means Committee, Washington, D. C. HONORABLE SIR: As manufacturers of surgical instruments, we protest most vigorously against including hospitals in free clause No. 650. With few exceptions, all reputable physicians are connected in one way or another with some hospital, and would feel entitled to claim any benefits that might come to them through said institutions. Free instruments to hospitals would mean free instruments to from 60 to 75 per cent of the surgeans of the United States. This would mean death to the surgical-instrument industry in this country. The present rate of duty is already too low to permit of a healthy growth of the surgical-instrument business. This being true, how could it be expected to survive if the majority of instruments were admitted free of duty. For the same reason we protest against a reduction of the present rate of duty on surgical instruments. Forty-five per cent is inadequate to offset the |