LINSEED AND LINSEED-OIL.

FRIDAY, July 13, 1888.

Notes of a hearing of J. A. DEAN, of J. A. Dean & Co., New York, R. R. COLGATE, of the Atlantic White Lead and Linseed Oil Company of New York, and GEORGE A. THAYER, of Campbell & Thayer, New York City.

Mr. DEAN. I desire to submit to the subcommittee a letter written to Mr. Mills, chairman of the Committee on Ways and Means of the House of Representatives, by Mr. Beaman, Mr. Evarts's son-in-law. It covers the ground, and perhaps it would be well for me to read it. Senator ALDRICH. Suppose you read it. Mr. Dean read as follows:

OFFICE OF EVARTS, CHOATE & BEAMAN,

No. 52 WALL STREET,
New York, June 21, 1888.

DEAR SIR: You will remember that yesterday I had a short conference with you in reference to the provisions in the proposed tariff bill as to duties on linseed and linseed-oil. Under the existing tariff the duty is as follows: Linseed, 20 cents per bushel; linseed-oil, 25 cents per gallon.

A bushel of the average imported seed produces, say, about 24 gallons of oil. The duty on 23 gallons of oil, under the existing tariff, would be, say, 624 cents. The duty on the seed that produces this oil would be 20 cents, and the difference between 20 cents and 624 cents, namely, 424 cents, would be the protection on 24 gallons of oil, which would amount to about 18 cents per gallon. Formerly the linseed-oil manufacturers were further protected by a drawback allowance on the cakes of about 5 cents per bushel. This drawback clause was left out of the last tariff. Now, the manufacturers I represent, namely, Messrs. Campbell & Thayer, and other manufacturers on the sea-coast, are in this position: they have built manufactories involving large amounts of capital and the employment of a large number of people, both at New York and Philadelphia, on the basis of an average protection, say, of 18 cent per gallon. Your proposed tariff bill fixes the duty as follows: Linseed, free; linseed-oil, 10 cents per gallon.

This was a change in the tariff made on the principle of free raw material and what you considered a proper duty on the manufactured article. My clients would make no special opposition to free seed, but in their opinion this reduction of the tariff on the manufactured article from 18 cents a gallon, in effect, to 10 cents a gallon was too much, by reason of the fact that all linseed-oil manufacturers in the United States are under considerable permanent disadvantage as compared with linseed-oil manufacturers in foreign countries, for the reason that there is a comparatively small market in the United States for linseed-cake, the principal bi-product of the linseedoil manufacturer. A bushel of seed will produce from 38 to 40 pounds of cake. This cake is used in England and in Europe largely for feed for cattle and sheep, and such use has not become at all general in the United States. The large proportion therefore of the linseed-cake from all mills and all the cake from sea-port mills is shipped to foreign countries for market.

You will see, then, that our manufacturers at the sea-coast, in competition with the English manufacturer who receives his seed free, must pay the cost of transportation to the United States, and then the cost of transportation of the cake from the United States back to England. This amounts to about 124 cents per bushel on an average, or what would be equal to about 5 cents per gallon on oil; so that, in considering what protection the American manufacturer should have on oil, you should take 5 cents per gallon from whatever protection you give him before you get him at all on the same basis as the English manufacturer. For instance, if your tariff bill provides for free

seed and a duty of 10 cents a gallon on oil, it is really only a protection to the American manufacturer of 5 cents a galon on oil. To the gentlemen that I represent this reduction practically of the protection that they now have of 18 cents to 10 cents is altogether too great, and it is very doubtful if they can carry on business at all in the United States on this basis, though they might do so under certain conditions of the market.

We learn further that it is proposed to change your proposed tariff bill by making the duty as follows: Linseed, 20 cents per bushel. Linseed-oil, 15 cents per gallon. Such a provision would be certainly ruinous to the sea-coast mills, and would result, as I am informed by my clients, in closing them up, for the following reasons: The duty on 24 gallons of oil which is obtained from a bushel of seed, would be 374 cents; deduct from 374 cents the duty on the seed, namely, 20 cents, and you have a protection of 174 cents on 24 gallons of oil, which would be equal to about 8 cents a gallon; deduct from these 8 cents a gallon the 5 cents a gallon which, as already explained, is the advantage which the English manufacturer has over the American manufacturer by reason of the cost of freight on the seed and the cost of freight on the cake, and you have a protection of the American manufacturer of 24 cents a gallon, as compared with 18 cents a gallon under the existing tariff.

Of course, this is outside of all questions of cost of labor in the United States and of all other facts, and a mere consideration of the figures I now present to you must satisfy you that such a proposed duty would be ruinous to the sea-coast linseed-oil manufacturers. Certainly it must be apparent to you further that such a reduction would be contrary to what I assume to be, in your opinion, ali proper basis of tariff reform. This proposed change would leave the duty on the raw material as it is, at 20 cents a bushel, and then would reduce the duty on the manufactured goods to such a low point as to ruin the manufacturer. Whatever change you do make in these linseed and linseed-oil provisions of the tariff, whether you put linseed on as free and linseed-oil at, say, 10 or 15 cents a gallon, or whether you put the seed at 20 cents and the oil at 25 cents a gallon, you should always preserve the proportions between the duty on raw material and the duty on the manufactured product which has been observed in former tariffs, and upon the reliance in which the large linseedoil manufacturing establishments on the coast have been built up. Keep up this proportion in whatever reductions you may make, and my clients will take care of their business, but do not destroy these proportions, and above all, do not keep up the high duty on the raw material, and at the same time reduce the duty on the manufactured goods, so that the English oil will come in. The result of this will be not only destruction to my clients, but to the seed growing parties also, for if the English oil can come into this market, then there can be no sale for the flaxseed, or linseed, grown here.

Yours, very truly,

Hon. ROGER Q. MILLS, Esq.,

Washington, D. C.

C. C. BEAMAN.

Mr. DEAN. We did not intend to bring this to you at first, but it seems so concise a statement that we concluded we would do so.

Senator HISCOCK. What you want is to leave the law as it is?

Mr. DEAN. Yes; it is not such great protection. English oil is within 2 cents a gallon of the same price as our oil to-day, so that there is no such thing as an export high-priced oil. The advance this year is because of short crops.

Senator ALDRICH. Are you, or any one of these gentlemen, a member of the linseed-oil trust?

Mr. DEAN. None of us are.

Senator ALDRICH. What proportion of the linseed oil manufacturers of the United States are in this trust?

Mr. COLGATE. I should think about 75 per cent.

Senator ALDRICH. What proportion of the manufacturers in the East are in the trust?

Mr. COLGATE. I should say about one-fourth or one-fifth.

Senator ALDRICH. What proportion of the capacity of the manufacturers of the United States is in the trust?

Mr. COLGATE. I should think about the same capacity; about threefourths in the West, and about one-fifth in the East.

Mr. DEAN. I should think not.

Mr. COLGATE. Speaking of prices

Senator ALDRICH. I mean the capacity of production of oil itself. Mr. THAYER. The very largest man in the West is out of the trust. Senator ALDRICH. What proportion of the total production of the United States is produced by concerns who are in the trust, in your opinion?

Mr. COLGATE. I should say about 60 per cent., at a rough guess. Mr. DEAN. I was going to say five-eighths myself.

Senator HISCOCK. Five-eighths of the capacity?

Mr. DEAN. Yes; or a little more.

Mr. COLGATE. We three are the largest producers of linseed-oil in the country.

Senator ALDRICH. Does there exist such a competition between manufacturers who are not members of the trust and the manufacturers who are members of the trust as to secure reasonable prices for the oil? Mr. COLGATE. I should think so.

Mr. DEAN. We can all three answer that question.

Senator ALDRICH. There is no such control of prices in the country as to give to the members of the trust a monopoly?

Mr. COLGATE. Oh, no.

Mr. THAYER. They can not.

Mr. COLGATE. The strongest mills and richest mills are out of the trust, almost all of them.

Mr. DEAN. Kellogg & Miller, of Amsterdam, and two in Buffalo, and three in New York, are large mills that are already out, even in the one State of New York. So that I think that my estimate of five-eighths is about right.

Senator ALDRICH. The trust is neither able to control prices nor the production of the country.

Mr. THAYER. That is true. Of course there is a strife.

Mr. COLGATE. They have nothing like the power that is generally supposed.

Senator ALDRICH. That is the reason we are asking. There have been statements made in the House that the linseed-oil trust did control both the production and prices.

Mr. DEAN. They control neither. Persons familiar with the manufacture know that that is very difficult to do. It does not enter into it at all, so far as we know. We have a perfectly open market. There is one fact that I would like to emphasize a little-if it were not for the manufacture of oil there would be no call for the growth of any linseed in this country. There is no use for the seed except to make the oil. Senator HISCOCK. I suppose the tariff on flaxseed will not be reduced at all.

Senator ALDRICH. We shall probably retain the present duty on both. Mr. THAYER. Keep oil as it is.

Senator ALDRICH. We probably shall.

TAGGERS' IRON.

FRIDAY, July 13, 1888.

STATEMENT OF JAMES W. KENSETT,

Of the Kensett Lath Company, of Newport, R. I.

Senator ALDRICHI. You have submitted to the subcommittee you written statement and that will be put in. Have you anything else to say in addition to that? If so, we will be glad to hear it.

Mr. KENSETT. All I have to say I think is contained in that, Senator.
Senator ALDRICH. You think that contains all you desire to state?
Mr. KENSETT. I think it is all covered by that statement.
Senator ALDRICH. All right. We will investigate the subject.
The following is the statement above referred to:

To the Senate Committee of Ways and Means, the Capitol, Washington, D. C. :

READINGS ON TARIFF REDUCTION.

Tarifi reform needed for the removal of the present duty on numbers 30 and 31 black taggers' iron put up in boxes or bundles or not, as also on numbers 30 and 31 taggers' iron pickled or cleaned by acid or any other material or process and cold

rolled.

The above-named materials form the basis of and is the raw material upon which is deposited the necessary amount of tin requisite to form a covering upon the surfaces of this light iron; hence the product becomes the well-known article of commerce, "tin" or terne plate, or in terms known to trade as "sheet tin."

The following returns give the latest data of the tariff on taggers' iron, copied from the Government report of 1887:

Taggers' iron, put up in boxes or bundles or not:

Nos. 30 and 31: Rates of duty, 30 per cent; quantities, 5,415,889 pounds; values, $139,692.40; duties, $41.907.72; ad valorem rate of duty, $30.

Taggers' iron, pickled or cleaned by acid or any other material or process and coldrolled :

Nos. 30 and 31: Rates of duty one-fourth cent per pound, 30 per cent; quantities, 154,220 pounds; values, $5,494.00; duties, $2,033.75; ad valorem rate of duty, $39.18. Duty collected, small.-These returns show the quantities imported and the values, and with it the duties upon such material, the amount of which will necessarily appear to be very small, indeed; and if the expenses to the Government for such collected duties were known and deducted therefrom, these figures would be materially reduced. Therefore, the trifling apparent diminution by a "free duty" upon these special sheet numbers of light iron and the quality of the material would inspire commercial enterprise, advance labor, and stimulate invention in many directions. Uses of this material.-The uses to which these particular taggers' iron, numbers 30 and 31 of each grade before stated, have been applied is as a covering for ladies' trunks for traveling purposes, etc., and some varied small appliances, viz, for metal lanterns, etc. But fashion and plans change, and now, in place of iron for covering trunks, etc., painted cloth and leather skin paper are substituted to a considerable degree.

This brand of iron not manufactured in the United States.--The comparative insignificance of demand for these quoted numbers 30 and 31 of these brands of taggers' iron in this country barely influence or detract from the iron industry of our United States, since that quality of iron is not now manufactured and can not be, at present, a paying

source of profit to the iron interests and little or no benefit comparatively in the labor market. Many attempts have been made to manufacture these grades of iron, therefore it is now given up. The reasons are, that a long experience to produce each sheet of a uniform thickness and the disastrous losses to the manufacturers from repeated inequalities of thickness destroy his trade, and combined with which is the fact that the skilled workmen so employed have required a wage beyond a paying profit to the iron master; hence, the manufacture of these special grades marked No. 1 and 2 in the Government report are entirely given up in this country, and dependence for supply is upon foreigu production.

Should be admitted duty free. The relaxation of present duties upon sheet tin, as proposed by the Committee of Ways and Means at Washington, D. C., could be advantageously extended to these special light irons used in the manufacture of tin sheet numbers 30 and 31, of the two before specified grades of taggers' iron and should be admitted duty free, since these brands are, and will be, needed for experimental uses, and later on, to attain successful manipulation for home-developing tinning pro

cesses.

Reduction of duty altogether a general advantage.-As an instance where the use of these taggers' irons may be utilized for the extension of commerce in this country through the creation of new industries, one in particular may be named, now ready for the market, but retarded by the present duty, viz: A very simple and successfully tried metallic material for preventing the rapid spread of fire in and throughout houses, mills, factories, etc., thereby the means to save life and property from the destroyer, fire.

To effect this purpose with mechanical preciseness, these even thicknesses of sheetiron and high quality taggers' iron products marked No. 1 and 2 in the Government's report on tariff duties, might, as the raw material, be utilized with greater advan tage in its manufacture, and to reduce the cost of the article and to extend its usefulness for the good of all the present duty should be taken off from these raw materials, "taggers' irons on the Nos. 30 and 31" as before mentioned; thus will it become the means for increasing the use of a public necessity. On the contrary, if imperfect and irregular thicknesses of sheets of light iron of a low grade be attempted in manufactures, either for tinning purposes or for the before-named new production to save life and property, or in any other broad invention, application, disastrous consequences can but follow and the public interest must suffer thereby by a continuation of present duty on Nos. 30 and 31, taggers' iron, on each designated quality of black and pickled and cold-rolled iron of the tagger brands.

Very respectfully, yours,

JAMES W. KENSETT,

Newport, R. I.

P. S.-The effect of removal of duties on these before-named raw materials would perhaps result in the only apparent practical way for settling the conflicting interpretations of classification, now governing the collection of duties upon these imported irons, Nos. 30 and 31, of the two classes stated, in contradistinction to similar numbers of steel. Hence every manufacturer abroad should be obliged to forward with the bill of lading for the United States Government a certificate duly authenticated that the material sold by him and intended for shipment to the United States in any and all ports therein is iron and not steel. Such certificate to be filed and held for reference.