"The company has taken a substantial participation in the capital of the Ocampo Railway Co., which owns 36 kilometers of permanent way between the port of Ocampo and the terminus of the company's Malberti Railway, together with rolling stock, an investment which will conduce to the economical working of the Campo Redondo factory. The directors have been advised by cable that the long-deferred arrangement with the Fusionados Co. has been completed, and they await fuller mail particulars.” The Fusionados Co. and the Hardy & Co. were the largest and strongest competitors the Forestal Co. had in the Argentine, and now they own or control them both. In 1912, at their stockholders' meeting in London, they issued a statement, with a balance sheet (a copy of which we have) showing a profit of over 429,000 pounds sterling. They also declared for 1911 dividends, the same as previous year 1910, viz.: 14 per cent on their preferred stock and 24 per cent on their ordinary or common stock. Next to the Argentine, the largest manufacturing interests of this extract, is found in Germany and was started some years ago in Hamburg by Mr. Herman Renner. This gentleman, as already shown, is a director in the Forestal Land, Timber & Railways Co., and we now quote from a Hamburg paper of October 28, 1912, as follows: GERB UND FARBSTOFFWERKE H. RENNER & CIE, A. G. HAMBURG. "The principal object of the extraordinary stockholders' meeting held on October 28 was the proposition to accept an amalgamation of interests with the Forestal Land, Timber & Railways Co. (Ltd.), London. The presiding officer, Herr Geh. Kommerzieurat, Dr. Ing. Carl Delius-opened the meeting with the statement that the executive committee felt sure that the amalgamation of interests would be beneficial to the shareholders. The principal points of the contract were as follows: ،،،We conclude on January 1, 1913, an amalgamation of interest with the Forestal Land, Timber & Railways Co. (Ltd.), by handing over our total profit, including the dividends, received from our ownership of Forestal shares and other participations in connection with the Forestal Co. "The Renner Co. continues its present and absolutely independent organization; we in return are to receive a payment, which shall be governed by the dividend paid on the common and preferred shares of the Forestal. Calculating the dividend of 19 per cent paid for the past 2 years on the fully paid-in capital, said payment would amount to 1,940,000 marks a year. "Every reduction of 1 per cent would be equal to a decrease of 100,000 marks; every addition of 1 per cent would represent an increase of 80,000 marks, but in no case shall the payment of the Forestal Co. exceed two and one-half millions yearly. "We to receive 10 per cent of all special reserves, but said amounts shall be deducted whenever said reserves later on are paid out in the shape of dividends. "We bind ourselves not to sell any of our 'participations' without the consent of the Forestal. This condition does not include the 11,669 preferred Forestal and 9,624 common shares, procured last year, with which we can act as we please. "Any profit we may make by a sale of these shares does not belong to the Forestal Co., but to our stockholders; we have also reserved to ourselves the ownership of a special reserve fund of 600,000 marks set aside to be used for the purpose of a supplement to our dividends in special instances. "This agreement has been made for a period of 10 years and can be mutually canceled by giving notice 6 months in advance-earliest per January 1, 1920-by the payment of 30,000 pounds sterling as a compensation. "The compensation of a cancellation for 1921 is reduced to 25,000 pounds sterling and for 1922 to 20,000 pounds sterling. "The legal settlement of disputes shall be subject to the decision of the English auditors Deloitte, Plender, Griffiths & Co., and the Revision Treuhand A. G. Berlin. "As a public indication of the amalgamation of interests, we propose the supplementary election of Mr. C. Hart neck, one of the directors of the Forestal Co., as a member of our executive committee. “We ourselves, are represented on the board of Forestal Co. by our president, Herr Kommerzieurat and Herman Renner." The stockholders accepted the agreement unanimously by acclamation; in the same way Mr. Hartneck was elected a member of the executive committee. In reply to the question of a stockholder, whether the possibility exists to receive for the current year a considerably higher dividend, the presiding officer stated that, taking as a basis the result of the past 9 months, it is believed that at least the same dividend as the one paid last year will be distributed. But at the last moment he could not say whether a larger dividend could be paid, because it was impossible to foretell the result of the remaining three months, and, further, nobody could tell whether some complication in reference to the political situation may arise. In regard to the future prospect of the Forestal Co., the president, Mr. Renner, stated that the present year was of less interest for said company than the years 1913 and 1914. The outlook for the year 1913 could be called extraordinarily favorable, because there have been made such large sales of extract that it is believed that the average dividend of 19 per cent-paid for some years past is safe. In the future also we may count upon receiving the same good dividends regularly. In reply to a further question the speaker gave the additional information that the stockholders' meeting of the Forestal Co. was taking place on October 28 at 3.30 p. m. in London, and in that way all formalities in reference to the amalgamation of interest were settled on the same day. Again we quote from the "Financial Times" of London, under date of September 25, 1912: "The 'Financial Times,' referring to the reported amalgamation of the Santa Fe Land Co. with the Forestal Land, Timber & Railways Co., remarks that this will enable them, if the project is realized, to keep up the present price of quebracho, the working of which is the principal object of the two companies." Thus it seems that the control of this business is pretty well in the hands of one company, and all they require now in order to control a large part of the world is the American manufacturing interests which a reduced tariff rate would make it easy for them to accomplish. In the hearings before your committee in 1909 Mr. Klipstein, the agent of the Forestal Land, Timber & Railways Co. undertook to deny a statement made by Mr. Skiddy that there had been a Trust formed in the Argentine in 1907 to control the price of quebracho extract, but his denial is as follows: Mr. Skiddy states that there was formed a trust in Argentine in 1907 to control the price of quebracho extract. As a matter of fact, the manufacturers of quebracho extract, in view of the impending panic, tried to form a combination to prevent enormous losses, but the panic was too severe, and the combine went to pieces, and the price of 2 cents per pound for quebracho extract, as mentioned in our first statement, was the result. The Argentine makers of extract had to take their panic medicine like all the rest of the world." Please note that the price went to 24 cents per pound in 1907, as stated by Mr. Klipstein, prior to their purchase of 130,000 pounds sterling of the Fusionados Co., a very natural result of prices below the cost of manufacture. Mr. Klipstein in 1909 furthermore stated before the Ways and Means Committee in a brief that the price used to be 4 to 5 cents per pound, and generally imported in the form of the liquid extract. Bear in mind, if you please, that Mr. Klipstein in this statement is referring back prior to the time of their making solid extract, and before they realized the growth of the American competition, and this competition when realized caused a reduction from 4 or 5 cents for liquid at 35 per cent tan to 4 cents for solid at 65 per cent tan (worth in the market almost double the price of the liquid), or, in other words, they were selling liquid without the American competition at a price equal to 9 cents per pound for the solid that they are selling to-day for 4 cents per pound. Why should not prices advance again without competition? If the Forestal Co. or their representatives in this country undertake to claim that they are being frozen out and that the present rates of duty are so great they can not compete, then we would refer you to their statements already made in their reports to their stockholders at their annual meetings held in London and their continuing to pay 14 per cent on their ordinary stock and 24 per cent on their preferred stock. Such dividends have not been and can not be earned by the American manufacturers. A reduction in the present duty would tend to bring about one of two results either the closing out by the American manufacturers at great loss, or the temptation to get together, advance prices, and control the market. We also have received a copy of the Daily Mail of Paris, under date of November 14, 1912, with an advertisement of the Forestal Land, Timber & Railways Co., stating that the capitalization is 1,700,000 pounds sterling, setting forth their great earning power, etc., and offering to sell 1,000,000 pounds sterling of 5 per cent first mortgage bonds. That imports have not been checked by the present tariff, we submit the following table: As a tariff for revenue and competition the present rate should be retained. Please note that in 1906 the United States manufacturers did a little nore business in pounds of extract than did the importers. The Forestal Trust at that time, as already shown, was not fully in the saddle, but later the imports were considerably over 100 per cent, and in 1908 it was 189 per cent greater than the amount manufactured in this country, which was probably due to the low price of 23 cents mentioned by Mr. Klipstein. The year 1912 shows somewhat less than double the quantity of the extract imported than manufactured in the United States. This decrease as between 114 per cent in 1911 and the 90 per cent in 1912 is 24 per cent, although the total product of the home manufactures is about the same, showing that this decrease in imports was not the result of any increase by the American manufacturers. If the tanners of this country understood the actual conditions, they would be more anxious than the extract manufacturers to have the duty on these extracts maintained. We have seen of late articles in the leather-trade papers advocating reductions in the tariff, all written by importers or representatives of foreign manufacturers (or their employees), the usual method they have adopted for years prior to tariff hearings. On the 30th day of August last the Stamford Manufacturing Co. wrote to their agent in Buenos Aires, putting to him a few questions, wishing to have an answer in time to place before your committee, which we now submit: Question No. 1. What is the wage per day or month of the ordinary laborer at a quebracho factory in the Argentine? Answer. The wage of the ordinary laborer in the Chaco is about $20 per month. NOTE. In this country the ordinary laborer receives $1.75 per day, about 1271 per cent higher. Question No. 2. What are the wages per day or month of a more intelligent man, such as bosses, etc.? Answer. The wages of a more intelligent man, such as a foreman, is about $40 per month, or perhaps $50. NOTE. The wage of such men in this country is from $2.75 to $3 per day, about 534 per cent higher. Question No. 3. What are the wages per day or month of still higher class of mechanics or engineers who have to be imported to that country? Answer. About $80 a month. NOTE. In this country from $4 to $4.50 a day, about 384 per cent higher. Assuming an equal division of above labor (although the ordinary labor at $1.75 per day would be the largest) we have an average of 73 per cent higher wages, making a difference per pound between the wages in the Argentine and the United States of 1.9 cents. Certain other questions as to cost, freights, etc., he states depends upon distance, freight, etc., making the cost of the solid extract on board vessel ready for shipment to the United States at from $59 to $62 gold per thousand kilos. NOTE. This represents 2.6-2.7 cents per pound. To this must be added the freight from the Argentine and the present duty to give the cost price here. Chestnut extracts are largely used in connection with quebracho extracts, a combination of the two extracts used quite extensively by the tanners. Chestnut extracts are made abroad and could easily become a part of the business of quebracho manufacturers, a natural result of a reduction in the present tariff. Such a result would be injurious to the American chestnut manufacturers, probably causing many of them to quit business, thus throwing on the market many plants at low prices, the purchase of which might result in the absolute control of the two most important and largely used extracts by the tanners in the United States. The attached pamphlet is submitted as part of this brief, it being a compilation of the tariff hearings in 1909 and since, and which we believe in this form will be of aid to your honorable committee. NEW YORK, January 9, 1913. Hon. OSCAR W. UNDERWOOD, House of Representatives, Washington, D. C. DEAR SIR: Confirming my brief conversation with you when introduced last Monday by a letter from Mr. Edwin Sefton, I wish to put in writing our strenuous objection to any change being made in the varnish schedule, and particularly so in what is known as spirit varnishes; for if the duty is taken off of these articles, it will be impossible for us to compete with the German manufacturers, as they have no internal-revenue tax, and we have to pay $2.10 per gallon revenue for every gallon taken out of the bonded warehouses. Please give this your very careful consideration. We are also very much opposed to a duty being put on china wood oil and soya-bean oil, as it is impossible to raise it in this country, and it is absolutely a raw material. If there is any information I can give you from a technical standpoint, please do not hesitate to call upon me. Thanking you for the courtesy extended me on Monday at 1 o'clock, I remain, Yours, very truly, Hon. OSCAR W. UNDERWOOD, BERRY BROS., NEW YORK, January 8, 1913. House of Representatives, Washington, D. C. DEAR SIR: In reply to your notice of tariff hearings, dated December 11, 1912, we beg to submit the following: Paragraph No. 12. Refined camphor, present duty, 6 cents per pound." We beg to enter our protest against any changes in the present tariff reducing the tax on refined camphor from 6 cents per pound and placing a duty on the crude material, which is now on the free list. Should the changes in H. R. 20182 become effective it will be the equivalent of reducing the present duty on refined and synthetic camphor 663 per cent. The crude supply of the world is controlled by the Japanese Imperial Government monopoly. Due to the advantages enjoyed by the Japanese refiners of location and cheap-labor conditions, even under the present duty imports of refined camphor have increased as follows: We have been refiners of camphor for about 40 years and desire to remain in the business, but any radical changes in the present tariff schedules will put the business in the hands of foreign refiners. We remain, very respectfully, yours, H. J. BAKER & BRO. The honorable Ways and Means Committee, NEW YORK, January 4, 1913. House of Representatives, Washington, D. C. GENTLEMEN: We beg leave to direct your attention to the radical changes proposed in paragraph 51 of the chemical bill (H. R. 20182), relating to distilled and essential oils and products, 24 of which are transferred from the free list to dutiable provision. In beginning, it is important that your honorable committee fully appreciate that all of these products are foreign to this country, and not one is capable of growth or production here in commercial quantities, and that all of them are distinctly raw products, and no one of them is suitable for use in the condition in which it is imported. All of these products are used in the manufacture of soaps, medicinal products, disinfectants, deoderizers, perfumes, tooth paste, and dental preparations, and all of which are household necessities having their therapeutic value and the change in provision from free to dutiable list will so increase the cost of production to the American manufacturer he will be forced to increase the price of his finished product to the consumer in order to afford him a fair and reasonable return for his investment. The blanket provision for all combinations of distilled and essential oils mentioned in the last part of paragraph 51 might, and probably will, in our judgment defeat the object of the law, as they are all commercially capable of combination in such proportions as would admit of immediate use in making any of the above-mentioned products and would thereby be subject to a lesser duty than should be paid if imported separately because of the inability of the appraiser to determine the exact proportion of the oils entering into and making up the value of the combined article. As an illustration, oil jasmin, which costs $144 per pound, origanum white, which costs $1 per pound, and oil rosemary, which costs 65 cents per pound. could be combined and shipped to this country and billed as mixed oils for soap perfume and it would be impossible for the Government to determine the dutiable value without the honest assistance of the importer. Under such a condition a reputable importer is at a great disadvantage. The materials to which we refer have been specifically provided for as free in all tariffs since that of 1883, and, as stated, being raw products impossible of production in this country, we strongly urge that they should continue to be free. The materials to which we refer and the countries of production are as follows: Oil bergamot, Italy; oil citronella, Java and Ceylon; oil almonds, France and England: oil caraway, Holland; oil jasmin, France; oil origanum, white and red, France; oil chamomile, Germany; oil cedrat, Sicily; oil neroly, France; oil aspic, France; oil valerian, France and Germany; oil limes, Sicily and West Indies; oil thyme. France; oil cassia, China; oil lemon, Sicily; oil anise, China; oil lavender, France: oil rose, France and Bulgaria; oil rosemary, France; oil juniper berries, Germany and Austria; musk, China; civet, Abyssinia; enflurage grease, Grasse, France. We have the honor to be, yours, respectfully. ANTOINE CHIRIS Co. |