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1910. There followed a heavy falling off in the importations after November 1. The year 1911, during which the present rate of duty, $9.60 per case, prevailed during its entirety, offers the only fair basis of comparison, and it will be observed that the quantity imported in that year was only about half as large as the importations of 1906, 1907, and 1909, and 40 to 45 per cent less than the importations of 1908 and 1910, with a heavily reduced amount of duty collected, notwithstanding the great increase in the duty rate.
Under ordinary and normal conditions the importations of champagne and other sparkling wines have shown a steady increase from year to year, but under the present rate of $9.60 per case, the importations have fallen off heavily, and it is obvious that the present duty is so high as not only to prevent the natural increase which should be expected under normal conditions, but to actually reduce the revenue to the Government. The maximum yield to the Government can unquestionably be secured by a rate of $6 per case.
PAR. 307. Still wines, including ginger wine or ginger cordials, vermouth, and rice wine or sake, and similar beverages not specially provided for in this section, in casks or packages other than bottles or jugs, 35 cents per gallon. In bottles or jugs, per case of 1 dozen bottles or jugs, containing each not more than 1 quart and more than 1 pint, or 24 bottles or jugs containing each not more than 1 pint, $1.25 per case; and any excess beyond these quantities found in such bottles or jugs shall be subject to a duty of 4 cents per pint or fractional part thereof, but no separate or additional duty shall be assessed upon the bottles or jugs: Provided, That any wines, ginger cordial, vermouth, rice wine or sake or any similar beverages imported containing more than 24 per centum of alcohol shall be classed as spirits and pay duty accordingly. The percentage of alcohol in wines and fruit juices shall be determined in such manner as the Secretary of the Treasury shall by regulation prescribe: Provided also, That an allowance of 5 per centum be made upon all champagnes and other sparkling wines, and upon still wines, vermouths, liquors, cordials, distilled spirits, malt liquors, ginger ales, and all other beverages imported in bottles or jugs.
ARGUMENT UPON PARAGRAPH 307.
The importation of still wines, vermouth, and similar beverages, has not kept pace with the increase in importations of other lines of merchandise, and with the increase of population, because of the excessive duties which are charged thereon under the present tariff. From 1900 to 1908 there was an increase of importations of almost 70 per cent. From 1910 to 1912 there has been an actual decrease in the value of importations of more than 10 per cent. A duty of 45 cents per gallon on wines containing 14 per cent or less of alcohol, and of 60 cents per gallon on wines containing in excess of 14 per cent of alcohol, is so largely in excess of the difference between the cost of production of wines in this country and abroad that the foreign wines are heavily handicapped. In fact there are but few wines produced in this country which can adequately take the place of certain foreign wines. A uniform duty of 35c. per gallon on wines in bulk would represent at least four times the difference in the cost of production between the foreign and American wines, and is therefore fully adequate to protect the American wine industry, quite aside from the heavy freights which the foreign wines are subject to from the interior to the foreign shipping port, and from there across the ocean. The same argument applies to wines, vermouths, and similar beverages imported in cases. The present rate of $1.85 per case is excessive and the rate of $1.25 as proposed, would adequately protect the American industry.
In comparing the quantity of wines imported, and the duties collected therefrom in the last 10 or 12 years, the same arguments respecting the importations during the year 1911 apply as have been referred to in the argument under paragraph 300 with respect to importations from Germany, Holland, Spain, Portugal, and Italy.
It is also desired that the portion of this paragraph which prescribes that wines, cordials, brandy, and other spirituous liquors including bitters of all kinds, and bay rum or bay water, imported in bottles or jugs, shall be packed in packages containing not less than 1 dozen bottles or jugs in each package, or duty shall be paid as if such package contained at least 1 dozen bottles or jugs-shall be eliminated. It is sometimes very inconvenient to pack 12 bottles in a case. Frequently samples are sent over, 1 or 2, or any small number sufficient for the purpose, packed in the case, and there is no just reason why the duty on 12 bottles should be assessed on 1 or 2 or any other number of bottles less than 12.
Paragraph No. 307 of the present tariff act contains the following:
“Provided further, That there shall be no constructive or other allowance for breakage, leakage or damage on wines, liquors, cordials, or distilled spirits."
This provision causes great hardship to the importer. Its effect is to require the payment of duty on wines, liquors, etc., when imported in casks or other receptacles other than bottles or jugs, on the basis of the quantity actually shipped from a foreign country, no matter what portion of the contents may have escaped through breakage, leakage, or damage during the course of the voyage, or at any other time subsequent to their shipment and prior to the moment after their arrival when they are gauged by the United States gauger for the assessment of duty. The Treasury regulations have provided for an allowance of 21 per cent of the capacity of a cask for normal wantage, due to evaporation or absorption, but any quantity that may be missing from a cask in excess of the 24 per cent of its capacity is dutiable as though the missing quantity itself had actually arrived. Relief from the payment of duty is granted only when the cask arrives absolutely empty, that being considered a nonimportation, but if as much as a half gallon remains in the cask, duty must be paid on the entire quantity which was originally shipped, less only the 24 per cent allowance for normal outage. It frequently occurs that through breakage, leakage, or other damage, a 20 gallon cask shows a wantage of 5 gallons or more. Taking a cask of Holland gin as an example, the duty on a 20 gallon cask, if it showed a normal wantage of one-half gallon, would be on 194 gallons at $2.60 per proof gallon, equal to $50.70. If this cask, however, through breakage, leakage or other damage, arrived here showing a wantage of 5 gallons, the duty would nevertheless, be figured under the present tariff on a basis of 20 gallons, less 24 per cent normal outage, net 194 gallons, making $50.70, whereas the importer receives only 15 gallons, and loses in the transaction not only the 41 gallons of excessive wantage, but also the duty on 44 gallons at $2.60, equal to $11.70. To cite another example, a 20 gallon cask may arrive, as has often happened, with say only 1 gallon remaining in it, the balance having escaped through breakage, leakage or other damage. In such an instance the duty under the present tariff would likewise be figured on a basis of 20 gallons less 2 per cent normal outage, net 194 gallons, making $50.70, whereas 19 gallons are absolutely lost and only 1 received, and the importer loses in this transaction not only the 19 gallons which have escaped, but also the duty on 184 gallons at $2.60 per gallon, equal to $48.10. It will readily be seen therefore, how unfairly, unjustly, and inequitably this provision of paragraph No. 307 operates. There is no other country in the world so far as it has been possible to ascertain the facts, which exacts a duty on merchandise which has not arrived, and relief from this unjust provision is respectfully requested by striking out that section of paragraph No. 307 which reads:
“Provided further, that there shall be no constructive or other allowance for breakage, leakage, or damage on wines, liquors, cordials, or distilled spirits”; and by inserting in lieu thereof:
“Provided further, That on wines, liquors, cordials, distilled spirits and similar beverages imported in casks or packages other than bottles or jugs, the duty when paid at the time of arrival shall be assessed on the basis of the actual contents of the cask or package at the time of arrival, and when withdrawn from bond at a subsequent date, the duty shall be assessed on the actual contents of the cask or package at the time of such withdrawal."
PAR. 308. Ale, porter, stout, and beer, in bottles or jugs, 40 cents per gallon, but no separate or additional duty shall be assessed on the bottles or jugs; otherwise than in bottles or jugs, 20 cents per gallon; and a 3 per cent outage allowance shall be made on all ale, porter, stout, and beer, imported in casks or packages other than bottles or jugs, based upon the gauger's return, in accordance with the decision of the United States Customs Court of Appeals, May, 1912. (Treasury Decision No. 32576.)
ARGUMENT ON PARAGRAPH 308.
A careful investigation of import figures under this paragraph shows the following:
Here again is to be noted a steady advance both in imports and amount of duty paid from 1902 up to 1908. The rate of this advance was approximately 15 per cent per year.
The duty on this product was increased in 1909. Since 1910 there has been a steady decrease in importations with a corresponding loss of revenue.
With the normal increase in population there should have been a corresponding increase in the importation and consumption of these beverages. Instead of this we have an actual decrease and the importations in 1912 are actually lower with the exception of 1909 than in any year since 1906.
In connection with these products we submit the official figures taken from the Department of Commerce and Labor Statistics Bureau for the year ending June 30, 1911, showing the exports to Great Britain, and Europe outside of Great Britain, of barley, hops, and staves.
Exports of barley, hops, and stares, 1906–1911, inclusive,
Barley to Great Britain.
Bushels. Bushels. Bushels. Bushels. Bushels.
3,330,048 5,354, 181 3,762, 127
55,024 207,754 179,999 Pounds. Pounds. Pounds. Pounds. Pounds. 11,947, 616 | 15,564, 696 21, 748, 208 9, 219,002 9,529,561 4,859 29, 455 31,899
20, 474 Number. Number. Number. Number. Number. 9,986, 990 6,867, 388 7,737,576 8, 163, 455 8,377, 456 36, 242,790 | 34, 670, 330 40,738, 307 34, 643, 112 30,902, 181
Bushels. 7,762, 745
343,595 Pounds. 11,781, 909
Hope to Great Britain..
9,738 Number. 10, 295, 966 39,512, 319
There can be no doubt whatsoever as to hops. They enter solely into the production of malt liquors and it will be observed that Great Britain takes all but an infinitesimal portion of the exports of this product from the United States. For the past six years more than 25 per cent of the total quantity of hops grown in this country have been exported to Great Britain.
Barley again is almost solely exported to Great Britain, and while some portion doubtless enters into the manufacture of Scotch and Irish whiskies, yet a large proportion is used in the manufacture of British ales and stouts, which in turn are exported to this country.
Staves enter into the manufacture of containers not only for malt and spirituous liquors in bulk, but also for containers in which bottled goods are packed.
These facts apply to every country of Europe which uses these raw products to send their wines either in bulk or bottle to this country. We, therefore, submit that a reduction of the duty rates imposed under paragraph 308 of the Payne-Aldrich Tariff Act, as suggested in the tentative form of paragraph 308 hereinbefore set forth, would redound largely to the benefit of the farming and lumber interests of this country, which, if these malt liquor importations continue to decrease still further, must suffer by reason of the natural reduction in the quantities of their products which they are able to sell abroad.
Par. 309. Malt extract, fluid, in casks, 20 cents per gallon; in bottles or jugs, 40 cents per gallon; solid or condensed, 45 per centum ad valorem.
PAR. 310. Cherry juice and prune juice, or prune wine, and other fruit juices, and fruit sirups, not specially provided for in this section, containing no alcohol, or not more than 20 per centum of alcohol, 25 cents per gallon; if containing more than 20 per centum of alcohol, 25 cents per gallon; and in addition thereto $1.50 per proof gallon on the alcohol contained therein.
ARGUMENT UPON PARAGRAPH 310.
Fruit juices are not produced to any extent in this country. There is a demand for the genuine fruit juices and fruit syrups which can not be met by the American productions, and these articles are, therefore, entitled to a much lower rate than the 70 cents per gallon that is at present levied on them. The limitation of 18 per cent alcohol now in effect on fruit juices to entitle them to the specified rate is also too low. Fruit juices, particularly when they are new, have a tendency to ferment. The only method by which this can be prevented is by the addition of alcohol or some artificial preservative. The artificial preservatives are not desirable, nor, for that matter, permissible, but a fruit juice containing less than 20 per cent of alcohol is very apt to ferment in the cask, resulting in leakage, if not entire loss, of the contents
of the cask. Twenty per cent of alcohol is a safe margin which will permit the importation of fruit juices without danger of fermentation, and the rate of duty to be fixed upon fruit juices and fruit syrups should, therefore, provide for such goods containing 20 per cent of alcohol or less, with an additional rate of duty as usual for the excess over 20 per cent of alcohol.
Par. 311. No change suggested.
Par. 312. All mineral waters and all imitations of natural mineral waters, and all artificial waters in green or colored bottles, or in jugs, if containing more than a pint and not more than a quart, 20 cents per dozen; if containing more than a half pint and not more than a pint, 15 cents per dozen; if containing not more than a half pint, 10 cents per dozen. In each of the foregoing cases no separate or additional duty shall be levied on the bottles or jugs.
If imported otherwise than in green or colored glass bottles or jugs, or in such bottles or jugs containing more than a quart, 8 cents per gallon.
SCHEDULE H, PARAGRAPH 312).
No person, firm, or corporation not holding a United States liquor license shall be permitted to import wines, spirits, or alcohol. No importation of wines, spirits, or alcohol shall be made in quantities less than three cases of full bottles or five gallons in bulk. Bottling in bond under proper Government supervision of wines, or spirits for exportation only, with reasonable allowance for lees and loss, may be allowed under suitable regulations to be established by the Secretary of the Treasury. The Secretary of the Treasury is hereby authorized to make and issue official stamps which may be purchased and affixed abroad covering the cap of every bottle of wine, Vermouth or spirits intended for importation into this country, and certifying as to maker, age, Dame, and quality or strength of the contents in general form or manner, similar to the stamp affixed to bottled in bond spirits, and the Secretary of the Treasury is bereby directed to formulate such regulations as may be necessary to control the sale and use of the said stamps by the proper parties only upon imported wines and spirits, the same to be without expense to the Government. Imported wines, spirits, ales, and beers may be sold in bond to foreign vessels for consumption upon the high seas only.
BRIEF OF THE IRISH INDUSTRIAL ASSOCIATION OF NEW YORK CITY, N. Y., RELATIVE TO THE REDUCTION OF DUTY ON WINES, SPIRITS, GINS, ALES, AND PORTER,
New York City, January 30, 1918. The COMMITTEE ON WAYS AND MEANS,
Washington, D. C. GENTLEMEN: The Irish Industrial Association of New York City, a commercial body of American citizens, representing an important interest as importers and dealers in foreign and domestic wines, spirits, gins, ales, porter, etc., in the United States of America, respectfully submits to the consideration of this honorable committee for adoption the recommendation respecting duties on said articles coming under Schedule H (paragraphs 300, 302, 303, 304, 308, and 309).
The consumers of the aforesaid articles include citizens of the whole United States, and therefore the freight charges which must be paid to transport such merchandise after it is laid down in New York City should be taken into consideration in assessing a duty on such imported articles.
It is a known fact that such articles when taken moderately perform the functions of medicines and tonics, and that the additional increase of duty imposed upon them and the additional and burdensome Treasury regulations which add to the cost f. o. b. port of New York has put the same beyond the reach of the laboring class of American people, and it does not seem just to deprive them of a necessity by the means of a high tariff which substantially prohibits their importation.
The duty on brandy and other spirits manufactured or distilled from grain or other materials, not specially provided for in the act of 1897 was $2.25 per proof gallon; act of 1909, $2.60 per proof gallon.
Duty on compounds or preparations of which distilled spirits are a component part of chief value, not specially provided for: Act of 1897, $2.25 per proof gallon; act of 1909, $2.60 per proof gallon.
Duty on cordials, líqueurs, arrack, absinthe, kirschwasser, ratafia, and other spirituous beverages or bitters containing spirits, and not specially provided for: Act of 1897, $2.25 per proof gallon; act of 1909, $2.60 per proof gallon.
Duty on ale, porter, and beer in bottles or in jugs: Act of 1897, 40 cents per gallon; act of 1909, 45 cents per gallon. In other coverings: Act of 1897, 20 cents per gallon; act of 1909, 23 cents per gallon.
Duty on stout in bottles or jugs: Act of 1909, 45 cents per gallon. In other coverings: 23 cents per gallon.
Duty on malt extract (fluid) in bottles or jugs: Act of 1897, 40 cents per gallon; act of 45 cents per gallon. In casks: Act of 1897, 20 cents per gallon; act of 1909, 23 cents per gallon. Solid or condensed : Act of 1897, 40 per cent; act of 1909, 45 per cent.
We submit to this honorable committee that the above duties are excessive and prohibitory and tend to prohibit the importation of same, thus depriving the importers and consumers of a necessity for the maintenance of life and business and the United States Treasury of the custom duties. Respectfully submitted.
Irish INDUSTRIAL ASSOCIATION OF NEW YORK,
Brandy and other spirits manufactured or distilled from grain or other materials, and not specially provided for in this section, two dollars and sixty cents per proof gallon.
BRIEF OF SIR ROBERT BURNETT & CO., DISTILLERY,
NEW YORK The WAYS AND MEANS COMMITTEE,
House of Representatives, Washington, D. C.: Permit us to refer to a brief submitted to you by the Wine & Spirit Traders' Society, Francis E. Hamilton, counsel.
The brief has to do with Schedule H of the tariff act.
Our object is to engage your attention particularly to the argument contained in this brief on paragraph 300, Schedule H.
We respectfully submit for your consideration: (1) That the decrease in imported brandies and other spirits from 1910 to 1912 is a healthy condition, arguing protection for American manufactured spirits.
(2) That to the $2.60 duty now assessed upon imported spirits is due the fact that although imports decreased 14 per cent from 1910 to 1912, the United States revenue on these same imports decreased only 2 per cent.
(3) That should the importation of brandies and other imported spirits decrease in 1913 to such an extent as to decrease the duty on same by $1,000,000, the increase in American-made spirits paying $1.10 internal-revenue tax would more than offset the deficit.
(4) That the intent of the tariff must be to protect American industries as well as to provide revenue; that imported brandies and spirits are luxuries; that luxuries must bear a high tariff; that as good, if not better, brandies and spirits are now manufactured in the United States as anywhere in the world.
(5) That foreign spirits must not be permitted to compete with American-made spirits by a reduction in tariff.
(6) That when on account of the tariff the importation of foreign spirits declines from year to year until it ceases, the American people will have been well served by their tariff and brought about a reversal of conditions, viz: (a) Recognition of American-made spirits as best. (b) An export business in American-made spirits.
(7) That the reason for the decrease in imported spirits does not lie in the increased tariff rate, but rather in the fact that the American people recognize the quality of their home product.
(8) That no matter how high the tariff on imported spirits, with the quality recognized as better, the consumption would increase; that imported spirits are luxuries, and if desired by the public would continue to increase in consumption.
(9) That statistics will show that with the normal increase in population there has been a corresponding increase in the consumption of wines and liquors, but which