PARAGRAPH 437-AMMUNITION. competition with products manufactured under more favorable conditions as to cost of materials and labor. Relative to a situation that would place us in competition with foreign makers, we believe ourselves to be at a great disadvantage in the purchase of what constitutes to us raw materials inasmuch as conversion of same from the crude requires in our country labor that receives wages largely in advance of what is paid in other countries. This also applies in converting by our factory these raw materials into finished products such as blasting caps. Gentlemen, I believe you can readily understand our position in opposing a reduction of the tariff, and again ask that it remain at its present figure. I wish to thank you. Respectfully submitted. UNION CAP & FUSE CO., ROCKEFELLER BUILDING, Cleveland, Ohio. STATEMENT FROM FORT PITT POWDER CO., KITTANNING, PA., RELATIVE TO BLASTING CAPS. The WAYS AND MEANS COMMITTEE, WASHINGTON, D. C., January 29, 1913. House of Representatives, Washington, D. C. GENTLEMEN: Referring to that portion of paragraph 437 of the tariff act of 1909 relating to blasting caps, I beg to submit the following statement, which will disclose to you the position in which we will be placed relative to the manufacture of blasting caps, should the duty on same be reduced. First. It will compel us to close our plant. At the present time we are not making any profit on caps, because it is impossible to compete with foreign caps and even with domestic caps, except in districts tributary to our own factory and at the same time maintain the high quality which is necessary in order to insure perfect detonation of the high explosives now being marketed. The Bureau for the Safe Transportation of Explosives and also the Bureau of Mines have done good work to secure high explosives of the least sensitive nature for the protection of life and property. It is necessary that caps of highest quality and strength be used for these modern and insensitive explosives. Materials and labor cost us considerably more here than in foreign countries: we even buy empty shells in Germany and pay 45, per cent duty, finding it cheaper than to manufacture them here. The close competition within the United States on both foreign and domestic caps compels us to market our product at little or no profit, and our books will verify this by an inspection, if desired. Second. An example of our position as compared with foreign caps can be brought before you by the fact that we are now figuring with a view of securing the business of a Pennsylvania company who import three to six million caps per year; the price which we quoted them was figured on a basis of profit less than 10 per cent to us, and we were informed that this company are now buying caps from Germany delivered here, duty of $2.25 included, at a lower price than our quotation. They now purchase in lots of 3,000,000 or more, so as to get the benefit of the minimum freight rate, and at that they have to depend upon tramp steamers, which often cause annoyance by delays, because steamers carrying passengers are not permitted to handle blasting caps. Also, handling and storing in large quantities is a great risk to both life and property in case of fire or explosion. Prices being equal, they would prefer to buy at home, as they could then purchase a smaller quantity at more frequent intervals, but we can not figure low enough to get the business. Third. We do not export any caps because we can not compete abroad with foreign manufacturers. Fourth. There are only a few companies now manufacturing caps in the United States; the business of all combined is not large. We are operating a plant which has a capacity of 20,000,000 caps per year, representing in value an aggregate of only $100,000, and this we estimate to be not over 10 per cent of the business done in this country. It is not possible to operate a smaller plant with any degree of economy. Fifth. The cap industry is small from a money standpoint, but it is highly essential to the explosive business which must have caps in order to detonate dynamite or high explosives, and caps only of the highest quality should be used in order to attain any degree of safety to life and property. I have no doubt every intelligent con PARAGRAPH 437-AMMUNITION. sumer will uphold you in encouraging the high standard of caps of these manufacturers. A reduction in the duty will inspire jobbers to import and urge upon the innocent or inexperienced consumers a cheap quality which will be a menace to life and other property just for the sake of the importer getting a little more profit. Sixth. The blasting cap item will never produce revenue from tariff, because it is such a comparatively small industry, and revenue should not be expected from it; because it is different from other industries in that it is so dangerous that only a few go into it. We are in it, for instance, because it is necessary to other of our interests, but from a manufacturing standpoint it is not as profitable under the present duty as are groceries or innumerable lines of general merchandise which do not carry the great risk, so I respectfully urge a continuance of the present duty of $2.25 per thousand, thereby not in any way hurting the interests of the consumer and giving the manufacturer a chance to do business, although not as profitably as such a dangerous business should be compensated for, but at the same time enabling us to do business not at a loss. I might add further that it is really to the consumer's interest to have what few cap factories there are maintained so that they will not have to be dependent upon a foreign source for so dangerous and important a part of their work, especilaly as the present price which the consumer pays for caps is very reasonable and he is not complaining. Very truly, yours, R. T. LYTLE, STATEMENT OF EMPIRE DYNAMITE CO., CHICAGO, ILL., RE DUTY ON BLASTING CAPS. Hon. OSCAR UNDERWOOD, CHICAGO, ILL., January 18, 1913. Chairman Ways and Means Committee, Washington, D. C. DEAR SIR: We wish to inquire if it would not be possible to obtain a readjustment of the duty on this commodity. At present the rate on blasting caps is $2.25 per thousand irrespective of the grade; that is, whether it is of No. 4, No. 5, or No. 6 quality. We think that this high duty is out of all proportion for the cost of the article, and herewith submit a few facts in connection with the same for your valued consideration. No. 4 blasting caps (commonly called quadruple force) at present take a list price of $6.65 per thousand in this country. Trade discount on same is 15 per cent off in small lots and 25 per cent off in case lots of 20,000 and over. Our cost on No. 4 cap is about $4.70 per thousand. Thus, in handling in case lots and over, there is practically no margin on the material. We wish to advise you that we can purchase this same article at a price of about $2.40 per thousand f. o. b. Hamburg, Germany, or about $2.70 per thousand delivered f. o. b. New York free of duty. You can therefore see that the duty of $2.25 per thousand approximates almost 100 per cent, and this on an article which is an absolute necessity in the development of this country. In addition to this it may not be commonly known, but the only concern that has heretofore been in position to supply blasting caps is the United Cap Manufacturing Co., of New York, which is owned and operated by the E. I. Du Pont de Nemours Powder Co. As you are probably aware, this is the chief powder concern in this country, and thus every time we purchase blasting caps we have to pay tribute to our own competitors. If we were helping a half a dozen or more American manufacturers pay their workmen a living wage by reason of this $2.25 per thousand duty on the blasting caps, we would feel satisfied it was for a good purpose and would have no objections, but as the situation stands at present we are simply paying tribute to our strongest and hardest competitors, and every shipment of case lots and over, they are necessarily aware of its destination and are therefore in a position to derive valuable trade information from this source in addition to the profit they obtain from the results of our efforts. We sincerely trust that you will see the injustice of the present situation on this commodity and that there may be some relief from same under the present revision of the tariff. PARAGRAPH 437-AMMUNITION. Any of the above statements can be readily verified from either of the other independent powder companies in the field, or probably from the cap manufacturers named above direct. Thanking you in advance for the courtesy of a reply in regard to the foregoing, we remain, Very truly, yours, Mr. DANIEL C. ROPER, EMPIRE DYNAMITE CO., CHICAGO, ILL., February 8, 1913. Clerk Committee on Ways and Means, Washington, D. C. DEAR SIR: With further reference to our letter of January 18, and your acknowledgment of January 21 with reference to duty on blasting cap, we note that we made an error in the name of the cap manufacturing company in stating same as the United Cap Manufacturing Co., of New York, whereas it is the Metallic Cap Manufacturing Co. For further consideration as to whether this duty should be removed we overlooked mentioning one of the principal reasons-the fact that at present in shutting out the foreign caps it is keeping off of this market a safety blasting cap. This is something that is sadly needed in this country, and it is very probable if there was local competition this would have long ago been placed on the market in this country. There is no patent covering the manufacture of the same, and they are manufactured by foreign countries and are in general use. They cost no more than the other kind, and would be the means of eliminating many accidents that at present occur only too frequently if they could be placed on the market in this country. With the duty removed it would be possible to import the safety cap. This for further consideration by the committee when the matter is taken up. EMPIRE DYNAMITE CO., THE ÆTNA POWDER CO. WRITE CONCERNING PERCUSSION CAPS. JANUARY 29, 1913. The WAYS AND MEANS COMMITTEE, House of Representatives, Washington, D. C.: As large manufacturers of high explosives, we are vitally interested in the consumer using efficient detonating caps with our explosives whether the caps be purchased from us or through others. An inefficient cap causes incomplete detonation of high explosives, thus giving poor results and increased hazard to the consumer. This in turn reflects back on the maker of the high explosives. Our experience, extending over a long period of years, has proven to us conclusively that caps imported by us and by others have not been efficient. If the present tariff means efficient caps we strongly urge that it be maintained. THE AETNA POWDER Co. BRIEF OF THE UNION METALLIC CARTRIDGE CO., BRIDGEPORT, CONN. The COMMITTEE ON WAYS AND MEANS, BRIDGEPORT, CONN., January 31, 1913. House of Representatives, Washington, D. C. SIRS: With respect to paragraph 437, in Schedule N, fixing duty on imports of cartridges, the undersigned urge that there be no change in this item, and for two reasons. (1) The difference in the factory cost of this product abroad and in the United States is entirely sufficient to support our contention. In the factory cost the item of labor alone shows the manufacturer in Europe to have a marked advantage over the American manufacturer. The existence and the degree of this advantage have been so often demonstrated that a repetition of figures now is believed to be entirely unnecessary. The disadvantage of the American manufacturer is, indeed, no more than offset by the present duty. PARAGRAPH 437-AMMUNITION. (2) A fundamental reason against reducing the duty on this article is based upon the relation of domestic ammunition factories to the Government. Compared with the ability of certain foreign countries to produce ammunition, our Nation is very much handicapped, even if we include both the public and private factories in this country. Thus recently one German factory is currently reported to have accepted a single order from the Turkish Government for just about twice the number of cartridges that all the private plants in the United States can make in a year. So far as available figures make an estimate possible, the public and private factories in the United States taken together can now make scarcely one-half of the number of cartridges made by a single German factory privately owned. A comparison of the capacity of our domestic plants with foreign plants, when foreign Government plants are included, would still further emphasize the complete inadequacy of our equipment in this regard, particularly in time of war. Furthermore, in 1911, Germany exported to European Turkey alone cartridges valued at more than $1,600,000. But, even in time of peace, the shortage of ammunition is such "as to cause grave concern to this department.' (See Report of Chief of Staff, U. S. Army, 1912, p. 30.) Also, as to the larger types of ammunition our Army has not an amount which would be sufficient "for a single engagement of the character of the engagements in either the Russo-Japanese or the present Balkan war." (See Report of Secretary of War, 1912, P: 25.) On January 30, 1913, on the floor of the House, Congressman Sherley said: "In no particular are we so unprepared as in connection with ammunition for the mobile artillery. (Congressional Record, p. 2338.) The situation is also reflected by the fact that, as to ammunition for field artillery of the militia, the estimate for 1912-13 was $1,500,000, while the appropriation was $100,000. (Report of Secretary of War, 1912, p. 182.) * * In 1905 only three private American factories were each capable of producing ammunition valued at more than $1,000,000. The Government thus is really and vitally dependent upon these few private establishments; and the practical question, and one of national importance, is whether these private plants are to be reduced in size and efficiency by any change of the tariff that could benefit only foreign manufacturers. Respectfully submitted. UNION METALLIC CARTRIDGE Co., By GEORGE W. JENKINS, Treasurer. BRIEF OF THE AMERICAN AMMUNITION CO., CHICAGO, ILL. Hon. OSCAR W. UNDERWOOD, Washington, D. C. CHICAGO, ILL., January 7, 1913. HONORABLE SIR: When you arrive at Schedule N, Sundries, we wish to ask if you will give a little attention to paragraph 437 “Percussion caps, cartridges, and cartridge shells empty, 30 per cent ad valorem," as this gives the same tariff on the empty paper shell as it does on the finished cartridge, which should not be, the "cartridge" being a finished product, while the "empty shell" is practically a raw material-it taking powder, wads, short, primers, and labor to make a "cartridge" out of it, to say nothing of paper boxes, wooden boxes, labels, and labor to pack them for market. Owing to this equal tariff it is unprofitable to import the empty shells to be filled and completed in this country. The duty on these empty shells should be for revenue and if placed at, say, 10 per cent or so, we and other independent loading companies would import tons of them to be finished here. At present the protective tariff protects the three large factories making them in this country, as the smaller concerns loading must purchase empty shells from them at 50 per cent above cost to make. Empty shells that cost $4 per 1,000 for the American factories to make, we must pay them $7.50 to $8 per 1,000 for. This owing to high tariff. Ata tariff of, say, 10 per cent, we could import 5,000,000 per year which is our capacity), which, at a cost of $5 per 1,000, would mean $2,500 revenue, where at the present time we import but very little raw material. "Paper gun wads," paragraph 441, Sundries, Schedule N, which are now 20 per cent, could possibly be reduced to 10 per cent, and if so we would be able to import about 15,000,000 per annum, which would mean more revenue. If you will give these items a little attention you will certainly confer a favor upon us and others, and increase the revenue from a line of material that at present is bringing in practically no returns to amount to much of anything. PARAGRAPH 437-AMMUNITION. We know your time is very limited, and do not like to bother you with these small items when you are fighting on "wool," cotton, lumber, etc.—that are large propositions-but we voted for "Tariff for revenue only," and not for protection of certain firms, and these two little items fall under that head if anything does. We trust there will be a downward revision all along the line on goods controlled by a few large factories, as in this instance. AMERICAN AMMUNITION Co., Per M. B. PAGE. Respectfully, yours, WINCHESTER REPEATING ARMS CO., NEW HAVEN, CONN., IN RE AMMUNITION. The COMMITTEE ON WAYS AND MEANS, NEW HAVEN, CONN., January 27, 1913. House of Representatives, Washington, D. C. GENTLEMEN: In giving consideration to paragraph 437 of Schedule N, relating to cartridges, cartridge shells, etc., we ask you to give attention to the differences in the manufacturing conditions which exist in Europe as compared with those with which the American manufacturers have to contend. The continental manufacturer is equipped with loading machinery which, for efficiency, is regarded as quite the equal of that used by the American manufacturers, so that so far as the mechanical element is concerned the manufacturers of this country have no advantage. The continental manufacturer has a decided advantage in the cost of labor, their wage rates being but 25 to 60 per cent of that paid by the manufacturers in this country, an advantage which no amount of automatic labor-saving machinery or other economic means have thus far been able to overcome. The foreign manufacturers also have an advantage in lead, which constitutes about one-third of the cost of ammunition, they being able to purchase this metal on an average of about 30 per cent less than that for which the American manufacturer can purchase it, while the American manufacturers, for use in the foreign trade, can, by the use of foreign lead, under the drawback provisions of the customs laws, obtain a return of 99 per cent of the duty which they pay; with the expense incident to the collection of this drawback, made necessary by the segregation of materials and the maintenance of records and accounts, the manufacturers are able to obtain a net return of but 1.99 cents per pound, as compared with the duty of 2.125 cents per pound, which they pay; but even with this benefit they are still unable to overcome the difference in the manufacturing costs which exists between the United States and the continental countries. That there is any demand for American-made ammunition in the continental countries can be accounted for only in that the foreign owners and users of Americanmade arms, in order to obtain the best results therefrom, naturally use, but to a limited extent, American ammunition at an increased cost over like ammunition of European make. The price of American-made ammunition is not excessive and could not be, by reason of the keen competition among the various manufacturers of this country, which is believed to be as great as that of any other commodity in trade. The present tariff rate does not unduly enhance the price of ammunition, which, considering the amount of capital and skill involved, with the possibility of casual injury to life and property incident to the manufacture and handling of explosives, brings far from excessive returns. Any material reduction in the present tariff rates will bring the American manufacturer into conflict with foreign conditions, with which they have no practical way of competing. This corporation employs in the small-arms ammunition branch of its manufacture alone on an average of 2,000 experienced people, whom, together with those similarly employed throughout the States, we submit should be, so far as possible, encouraged and kept in practice for the common good of the country, and we therefore earnestly trust that there may, at this time, be no change made toward lowering the rates by your committee. Respectfully, WINCHESTER REPEATING ARMS Co., |