PARAGRAPHS 306-307-WINES. Mr. CULMAN. No, I could not state just now. I should judge, though, that Mr. Needham would be more able to give you that information than I am. He is a Californian and I am not. Mr. HAMMOND. Do you know how many acres of land are included in the land that goes into your capitalization of $150,000,000? Mr. CULMAN. Two hundred and fifty thousand. Mr. HAMMOND. Two hundred and fifty thousand acres of land? Mr. CULMAN. Yes, sir, and that land, all of it, a few years ago was just simply waste land, and a good deal of it would be waste land to-day if it was not used for vineyards. Mr. HILL. I want to ask you frankly, do you ask for the continuance of these duties on the ground of protection? Mr. CULMAN. Partly on the ground of protection. Mr. HILL. Well, I want to say frankly that, as one of the men who voted for this increase on this schedule, I did not vote for it as a protective proposition. I voted for it on the Republican doctrine of a luxury being taxed to secure all the revenue that it would bear, and we did it. The increase in this schedule, in my judgment, four years ago at least so far as my vote was concerned was purely as a revenue proposition, and I could not consistently have acceded to the request that it be treated as a protective proposition and have put the great increases that were made four years ago, the Payne tariff law, as a protective proposition; and I do not think the majority of the members of the committee at that time voted for this increase considering it as a necessity of life and as a protective proposition, but purely as a revenue measure; and if I were to continue on the committee I should treat it precisely as a revenue measure and put the rates of duty at what would bring the largest revenue. The CHAIRMAN. That is all. Merchandise imported: Quantities and values, by articles, years ended June 30, 1901 to other (doz. qts.. 311,078 ..dut.. (dolls..... 4,589, 494 dut.. (galls.. 2,785,850 3,300,026 (dolls..1,942,322 2, 143, 433 373,832 397,818 (dolls..... 1,687,420 1,846,937 In other coverings....dut..[doz. qts.. Total wines. 407,944 336,245 371,811 415,394 5,861, 639 4,969, 635 5,723,764 6,127,062 3,753,211 4,007, 691 3,973,919 2,292,297 2,387,018 2,352, 485 488,773 440,869 471, 153 2,095,360 2,035, 217 2,165,672 2,299, 194 .dut..dolls.. 8,219, 236 8,921, 138 10,249,296 9,391,870 10,241,921 10,993,968 335,256 4,930, 768 4,482,499 2,567,712 546,688 PARAGRAPHS 306-307-WINES. Merchandise imported: Quantities and values, by articles, years ended June 30, 1901 to 1912-Continued. Total spirits, distilled .......dolls..6,886,691 6,500,606 7,676,825 7,112,887 6,076,929 5,410,299 Wines Champagne and other/doz. qts.. 419,403 366,669 436,628 391,003 218,495 Still wines In casks...... In other coverings.... dut.. Total wines.... dut. fgalls..5, 213, 458 5,443,782 5,747,056 7,100,661 4,812,787 281, 134 4,688,090 3,864,070 2,488, 740 577,244 2,414,621 9,591,451 Importations of brandy, champagne, and still wines, in bulk and in cases, at the port of Chicago during the years 1902 to 1911. Mr. Culman at a later date submitted the following: THE CALIFORNIA WINE ASSOCIATION, Hon. OSCAR W. UNDERWOOD, New York, January 30, 1913. House of Representatives, Washington, D. C. DEAR SIR: At the hearing on Schedule H, January 15, 1913, you accorded us the privilege of replying to the briefs submitted in behalf of the importers. We believe that, with the exception of one point, the subject was fully covered in the oral hearing of Mr. Lee J. Vance and myself, and by the brief submitted by Mr. Vance in behalf of the American Wine Growers' Association. The one point, which was not touched upon in our oral hearing, we now beg to submit for your consideration. We oppose the request of the Italian Chamber of Commerce and others "that the present fiscal limit of 14 per cent alcohol for the lower rate of duty on still wines in casks is too low and discriminating, and that it should be extended to at least per cent. We oppose this request for the following reasons: 16 Dry wines, containing a high degree of alcohol, are desired for the purpose of stretching. We do not wish to charge the importers with doing this stretching, but we know that it is done by the dealers. We have frequent inquiries for California wines, show PARAGRAPHS 306-307-WINES. ing an alcoholic strength in excess of the usual 12 per cent. We are unable to supply such wines, but, as we receive these inquiries quite frequently, and as the demand for such wines seems to be considerable, we have asked repeatedly what they are wanted for. The replies from dealers have invariably been that they want these wines in order to be able to add 10 or 15 gallons of water to the barrel, as they are able to do with Italian wines. Thus raising the fiscal limit to 16 per cent would simply mean a loss of revenue of, say, 20 per cent. We hold that the limit should rather be reduced to 12 per cent, which is the natural alcoholic strength developed by fermentation. Anything above 12 per cent is, as a rule, an artificial addition." We also desire to refer to the statement submitted by the Stone Hill Wine Co. The suggestion, contained in this statement, would be opposed most earnestly by all the manufacturers of pure sweet wines throughout the country, not only by those engaged in this business in California, but also by the wine makers of New York State and other States where such wines are produced. We will, however, content ourselves with pointing out that the matter is one which does not fall within the province of a tariff bill. Very respectfully, W. CULMAN, TESTIMONY OF JOHN W. YERKES, OF WASHINGTON, D. C. JOHN W. YERKES, having been first duly sworn by the chairman, testified as follows: Mr. YERKES. Mr. Chairman, Mr. Culman represents commercially the same grape growers and wine manufacturers that I represent legally, and Mr. Oxnard has poured into my ear such a pitiful story concerning the condition of certain honest farmers who have come 2,000 miles to Washington and must perforce travel 2,000 miles back to their families, that I have concluded, with your permission, if you will allow me to collaborate with Mr. Culman in the preparation of a brief, not to occupy the time of the committee, especially as perhaps my argument would be like some that we have heard in this room, full of eloquence but void of elucidation. I would like to say this, however, that down in the State where you and I were born and where I remain, and where I remained, we all-Democrats and Republicans agreed with the gentleman from New England on the proposition that imported wines were a luxury, while of course Bourbon whisky was a necessity. And therefore we thought if it were tolerable and permissible to levy these customs duties on any importations, that they should be levied on these luxuries; and it is from that standpoint that I certainly ask the committee to continue the present schedule, as against imported wines. MEMORIALS OF THE ITALIAN CHAMBER OF COMMERCE, NEW YORK CITY, REGARDING WINES, SPIRITS, ETC. MEMORIAL ON THE REVISION OF THE DUTIES ON WINES, SPIRITS, ETC., INCLUDED IN SCHEDULE H, OF THE TARIFF ACT OF AUGUST 5, 1909. Hon. O. W. UNDERWOOD, Chairman of the Ways and Means Committee, Washington, D. C. SIR: The question of the revision of the duties on wines and spirits is one of paramount importance, not only to the trade engaged in this commodity, but also to the revenue, which derives from it about $14,250,000 of its total income. Upon the present unsatisfactory condition created to revenue and importers alike by the prohibitory duties charged on these commodities, this chamber feels impellent the duty of calling the earnest attention of this honorable committee. This trade has been much abused in the past and made the object of exorbitant taxation, either under PARAGRAPHS 306-307-WINES. the plea of protection to domestic industry, or under the mistaken idea that it includes only articles of luxury, or with the intent of increasing revenue, with the result that the excessive rates imposed have defeated their purpose. This chamber hopes that in the present revision of the tariff the goods under this schedule will receive more fair play and be considered, as regards taxation, with greater equanimity and with clearer ideas than at the last revision, of unhappy memory. At present, still wines imported in casks are subject to a duty of 45 cents per gallon, if containing no more than 14 per cent of alcohol, and of 60 cents per gallon if containing more and not over 24 per cent, the highest alcoholic strength allowed for wines. Still wines in bottles are taxed at the rate of $1.85 per dozen quarts or 2 dozen pints, plus 6 cents per pint on the excess of the quarts, but not of the pints, in which case they are compelled to pay double duty. Champagne and other sparkling wines pay at the rate of $9.60 per dozen quarts or less, $4.80 per dozen pints or less, $2.40 per dozen half pints or less, and, on bottles containing over 1 quart, $9.60 per dozen quarts plus $3 per gallon on the excess. Brandy, spirits, cordials, and liqueurs are rated at $2.60 per proof gallon. These rates, succeeded to the reciprocity rates, which were in operation with the principal wine-growing countries of Europe, namely, France, Italy, Germany, Spain, Portugal, the Netherlands, the United Kingdom, etc., as the respective commercial treaties came to an end. The reciprocity rates were as follows: Still wines in casks, 35 cents per gallon, irrespective of alcoholic strength but not exceeding 24 per cent. Still wines in bottles, $1.25 per dozen quarts or 2 dozen pints, plus 4 cents per pint over the quantity contained in excess of the quart. Champagne and other sparkling wines, $6 per dozen quarts; $3 per dozen pints; $1.50 per dozen half pints; and in bottles containing more than 1 quart each, $6 per dozen quarts plus $1.90 per gallon on the quantity in excess. Brandy and other spirits, $1.75 per proof gallon. Upon these conventional rates, corresponding to an average protection of over 100 per cent to domestic production, the import trade, if it did not prosper, it could at least exist, which is not the case with the present exorbitant duties, that have certainly gone beyond a reasonable limit of taxation, and operate as prohibitive rates. This is amply demonstrated by the marked decrease shown by importations of wines and spirits since the enactment of the present tariff, as indicated by the following It should be noted, with reference to the above table, that 1910 was the fiscal year in which the reciprocity treaties ended, and in consequence importations were during that year stimulated beyond the quantity required for consumption, in order to secure the advantage of the old rates, and that the real effects of the rates enacted in 1909 began to be felt only in fiscal year 1911. The quantities entered for domestic consumption under the old and new régimes, respectively, in 1911 and 1907, which may be considered normal years, are in accord with the figures given above in demonstrating the visible decrease that has taken place in the consumption of foreign wines in this country. PARAGRAPHS 306-307-WINES. The above figures show conclusively the prejudicial effect of the increase of duties enacted at the last tariff revision, the rates imposed seriously menacing the very existence of the import trade of foreign wines and spirits. The per capita consumption of foreign wines in the United States, which was in 1907 of gallons 0.0877, has decreased to gallons 0.07681 in 1911. The total quantity of foreign wines consumed in the United States is to-day (gallons 7,204,226 in fiscal year 1911) less than it was before the Civil War (gallons 8,944,679 in fiscal year 1860), although the population is now three times as great in comparison to that of 1860. As the per capita consumption of wine, domestic and foreign, in the United States has increased from gallon 0.34 in 1860 to gallon 0.67 in 1911, the benefit has been reaped entirely by domestic production, the per capita consumption of which has steadily increased from gallon 0.0591 in 1860 to gallon 0.604 in 1911; while the per capita consumption of foreign wines, from gallon 0.284 in 1860 has decreased in 1911 to gallon 0.0768. In striking contrast with the alarming decrease shown by the importations of foreign wines are the following interesting figures (taken from Bonfort's Wine and Spirit Circular), showing the receipts of California wines (by water route) at New York during the last six years: Gallons. These figures show an increase of over 553 per cent. 9, 126, 650 9, 824, 720 On still wine in casks, notwithstanding that the duty was increased at the last tariff revision from 29 to 71 per cent, the revenue derived therefrom, which was $1,991,484.01 in fiscal year 1907, did not practically increase, having amounted in fiscal year 1911 to only $2,011,584.93. Likewise, still wines in bottles, the duty on which was increased 48 per cent, did not show any proportionate increase in revenue, which was in 1911 $961,839.34, against $811,887.99 in 1907. On champagnes and other sparkling wines, the duty on which was increased 60 per cent, instead of a gain there was a notable loss of revenue, which decreased from $3,321,398.28 in 1907 to only $2,150,096.80 in 1911. These facts show clearly that from the standpoint of revenue the present rates of duty have defeated their purpose, and advise the enactment of more reasonable rates. From the standpoint of protection to domestic production the present rates, especially on still wines in casks, are not only unnecessarily exorbitant, but ruinous to foreign wines, which they practically exclude from our markets, leaving domestic wines in control of the latter. In fact, the bulk of the California wines of the claret type sell to-day in New York at about 32 cents per gallon, which means a protection of 244 per cent in comparison to South Italian wines, which often slightly exceed the strength of 14 per cent, are therefore dutiable at 60 cents per gallon, and can not be laid down in New York for less than $1.10 per gallon; and, in the case of wines below 14 per cent of alcohol, for less than 95 cents per gallon. Even in the latter case the protection amounts to 197 per cent. No wonder that, under the circumstances, the importation, for instance, of Italian wines in wood at New York, decreased from 1,457,560 gallons in 1910 to 700,310 gallons in 1912. On fortified wines of the port and sherry type, subject to the higher rate of duty of 60 cents per gallon and costing to import not less than $1.50 per gallon, the protection enjoyed by California wines selling in New York respectively 42 and 50 cents per gallon, ranges from 189 to 251 per cent. On domestic sparkling wines, selling in the average at about $12 per case, the protection given by the present tariff of $9.60 per dozen quarts is equal to 80 per cent, but these wines are benefited by a much greater protection than that of the duty by reason of the much higher primary cost of the foreign champagnes. In considering the question of protection to domestic wines, the facts pertinent to the primary cost of production, cooperage, freight, and other commercial conditions should be taken into consideration, in order to establish whether and in what measure there is need for protection. |