PARAGRAPH 300-BRANDY.

increase has been enjoyed by the American-made wines and liquors rather than the imported.

(10) That if the rate under the former tariff is reestablished there is grave reason to doubt that the revenue to the Government will in the future continue to increase. (11, That in the future the importation of wines and liquors will continue to decrease and, consequently, the returns in duty decrease; that the future will show a great increase in the consumption of American-made wines and liquors and a consequent increase in internal revenue.

(12) That the maintaining of the present rate of duty on imported spirits means the continued growth in the consumption of American-made wines and liquors and, therefore, a factor in decreasing the "high cost of living," or (as sometimes defined) “the cost of high life.”

(13) That this firm is itself a positive example of the recognition by the American consumer and his leaning toward American-made wines and liquors, as is evident from the following:

In the fall of 1910 we started to manufacture in New York the same gin that had up to that time been made only in London and had been imported to the United States from London only, for 60 or 70 years.

As a result of our maintaining the same quality when made in New York as when made in London, the sale of this gin in the first 12 months increased over 100 per cent, in the second 12 months an increase of 50 per cent and is still increasing and growing in favor with the American public.

Of course, when we started manufacturing our gin in New York we saved the duty now assessed on imported spirits and therefore showed the consumer a reduction in the cost to him on gin of the same identical quality he had been purchasing in the past.

(14) Our own firm is not the only example of recognition by the American consumer of quality in wines and liquors when made at home.

We respectfully submit that the present duty on imported spirits must be maintained to insure revenue and to increase the consumption of American-made wines and liquors and to reduce the cost of wines and liquors to the American public. Respectfully.

PARAGRAPH 301.

SIR ROBT. BURNETT & Co., By SAM J. SNYDER, President.

Each and every gauge or wine gallon of measurement shall be counted as at least one proof gallon; and the standard for determining the proof of brandy and other spirits or liquors of any kind imported shall be the same as that which is defined in the laws relating to internal revenue: Provided, That it shall be lawful for the Secretary of the Treasury, in his discretion, to authorize the ascertainment of the proof of wines, cordials, or other liquors, by distillation or otherwise, in cases where it is impracticable to ascertain such proof by the means prescribed by existing law or regulations: And provided further, That any brandy or other spirituous or distilled liquors imported in any sized cask, bottle, jug, or other packages, of or from any country, dependency, or province under whose laws similar-sized casks, bottles, jugs, or other packages of distilled spirits, wine, or other beverage put up or filled in the United States are denied entrance into such country, dependency, or province, shall be forfeited to the United States; and any brandy or other spirituous or distilled liquor imported in a cask of less capacity than ten gallons from any country shall be forfeited to the United States. PARAGRAPH 302.

On all compounds or preparations of which distilled spirits are a component part of chief value there shall be levied a duty not less than that imposed upon distilled spirits.

PARAGRAPH 303.

Cordials, liqueurs, arrack, absinthe, kirschwasser, ratafia, and other spirituous beverages or bitters of all kinds, containing spirits, and not specially provided for in this section, two dollars and sixty cents per proof gallon.

PARAGRAPH 304.

PARAGRAPHS 306-307-WINES.

No lower rate or amount of duty shall be levied, collected, and paid on brandy, spirits, and other spirituous beverages than that fixed by law for the description of first proof; but it shall be increased in proportion for any greater strength than the strength of first proof, and all imitations of brandy or spirits or wines imported by any means whatever shall be subject to the highest rate of duty provided for the genuine articles respectively intended to be represented, and in no case less than one dollar and seventy-five cents per gallon. PARAGRAPH 305.

Bay rum or bay water, whether distilled or compounded, of first proof, and in proportion for any greater strength than first proof, one dollar and seventy-five cents per gallon.

PARAGRAPH 306.

Champagne and all other sparkling wines, in bottles containing each not more than one quart and more than one pint, nine dollars and sixty cents per dozen; containing not more than one pint each and more than one-half pint, four dollars and eighty cents per dozen; containing one-half pint each or less, two dollars and forty cents per dozen; in bottles or other vessels containing more than one quart each, in addition to nine dollars and sixty cents per dozen bottles, on the quantity in excess of one quart, at the rate of three dollars per gallon; but no separate or additional duty shall be levied on the bottles.

PA AGRAPH 307.

Still wines, including ginger wine or ginger cordial, vermuth, and rice wine or sake, and similar beverages not specially provided for in this section, in casks or packages other than bottles or jugs, if containing fourteen per centum or less of absolute alcohol, forty-five cents per gallon; if containing more than fourteen per centum of absolute alcohol, sixty cents per gallon. In bottles or jugs, per case of one dozen bottles or jugs, containing each not more than one quart and more than one pint, or twenty-four bottles or jugs containing each not more than one pint, one dollar and eighty-five cents per case; and any excess beyond these quantities found in such bottles or jugs shall be subject to a duty of six cents per pint or fractional part thereof, but no separate or additional duty shall be assessed on the bottles or jugs: Provided, That any wines, ginger cordial, or vermuth imported, containing more than twenty-four per centum of alcohol shall be classed as spirits and pay duty accordingly: And provided further, That there shall be no constructive or other allowance for breakage, leakage, or damage on wines, liquors, cordials, or distilled spirits. 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 one dozen bottles or jugs in each package, or duty shall be paid as if such package contained at least one dozen bottles or jugs, and in addition thereto, duty shall be collected on the bottles or jugs at the rates which would be chargeable thereon if imported empty. 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.

WINES.

TESTIMONY OF LEE J. VANCE, 302 BROADWAY, NEW YORK CITY, SECRETARY AMERICAN WINE GROWERS' ASSOCIATION.

The witness was duly sworn by the chairman.

Mr. VANCE. I might briefly say that I represent the American Wine Growers' Association, an organization composed of the largest and leading grape and wine growers of the United States. I might add that I also am interested in another schedule, as the publisher of a trade paper, and that is paragraph 312 devoted to mineral waters. I will make a few remarks on that.

PARAGRAPHS 306-307-WINES.

Briefly stated, I assume that the brief of Mr. Hamilton, counsel for the importers, asks for a reduction of duties on wines. I have not had the pleasure of seeing the brief and, therefore, I do not know what it contains, but I suppose that Mr. Hamilton as attorney for the Wine and Spirit Traders' Society, which is an organization of importers, is asking for a reduction.

On this schedule at the hearings in 1908 we thrashed out the question pretty thoroughly. You, Mr. Chairman, were present at that time, and probably remember the line of argument made then. At that hearing the main argument of the importing interests was that if any increase of duty were made, it would seriously handicap their business and perhaps put them out of business. Mr. Hamilton in his brief, and also in his long argument, made this statement.

I quote from his argument, in which he says that if the tariff were raised the result would be to drive "a large proportion of the present dealers out of the trade." I find they are still doing business at the same old stand. He also said as another one of his conclusions: "It goes without contradiction that to increase the duty rate upon wines and spirits would be to increase the cost, whether native or imported, to the consumer."

As a matter of fact-and Mr. Needham will bear me out as far as California wines are concerned, and I can confirm the statement as far as eastern wines are concerned-they were never cheaper in price than they are to-day. Of course, these dire prophecies have not been fulfilled. The frame of mind (as Mr. Harrison has just called it) that Mr. Hamilton was in then, if it continues, shows that it really does not amount to anything.

But, Mr. Chairman, the reasons we submit that the present tariff should be maintained may be stated briefly thus: First, that the wines, liquors, and fermented beverages generally are large revenue producers, always have been, always will be, and always have been recognized as such by every country. Second, that in order to make any reduction in the high cost of living you can hardly refuse to tax luxuries. In other words, I do not imagine that any reduction of the duty on champagne can be made by this committee on the ground that it will reduce the high cost of living. It would seem to me, on the contrary, any such reduction might help the cost of high living. A friend of Mr. Harrison's, a lawyer whom I met in New York last week, said to me, "I understand Mr. Harrison would like to see that high duty on champagne reduced. What do you think about it?" I said to him, "Do you think it is high?" He said, "Oh, yes. strikes me that $9.60 a case is too much." I said, "How does it affect you? You have not bought a bottle of champagne probably in six months." And that is the fact; any reduction in the duty on champagne and foreign wines would affect a comparatively small number of people.

It

Mr. HARRISON. Isuppose he thought I was out for the Broadway vote. Mr. VANCE. A man can think a great many things, Mr. Harrison. Mr. ANSBERRY. Did you say Mr. Harrison bought a bottle of wine? Mr. VANCE. I said a friend of mine. He happens to know Mr. Harrison.

Mr. HARRISON. He indicated by that that while he was with me he never was permitted to buy a bottle of champagne?

PARAGRAPHS 306-307-WINES.

Mr. VANCE. That must be it; I think there is no objection to that statement.

The people who are affected would not be a very large number. The duty on champagne was raised by the Payne bill from $8 a case to $9.60. The duty on still wines was raised 10 cents a gallon.

Let us compare the different tariffs on champagne and other wines. The German duty on champagne is $10.80 per case, which is $1.20 more than our duty. The Russian duty on champagne is 25 rubles per pound, equal to our 36 pounds. The reciprocal tariff, which, however, does not apply to our wines, is 14 rubles, a ruble being equal to 51 cents. A case of champagne weighs about 70 or 75 pounds. That would make the Russian duty enormously high, amounting to something like $18 per case. There is, however, a conventional tariff with France, which makes the duty on their champagne about 75 cents a bottle, or $9 per case. So you will see that the duty put upon champagne by other countries is very high.

The same is true as to still wines. The French duty is 35 francs per hectoliter. That would make it about 26 cents per gallon. France is not protecting her wine growers, for she produces more wine than any other country in the world. She certainly has no need for protection on her wines.

In Germany the duty on wine varies according to alcoholic percentages. The charges are higher than those of France, ranging from 28 to nearly 40 cents. The Russian duty, again, is higher than the German or French.

It is no wonder the importers of Italian wines would like the duty on still wines raised to 16 per cent alcoholic strength so that they could bring in at a cheap rate heavy wines which can afterwards be stretched or reduced to a lower strength.

any

I think it is safe to suppose that the importing interests will always ask for a reduction. That is to be expected. If I were importing line of goods, I should do the same thing. I imagine Mr. Hamilton's brief, which has probably been carefully prepared, is similar to the one which he filed at the previous hearing in 1908, at the hearings on the Payne-Aldrich bill.

At that hearing Mr. Boutell asked what the effect would be if the tariff were the same. Mr. Hamilton's reply, printed on page 4350, is as follows:

"If you are referring to still wines, then I agree with you that the consumer does not get the benefit, but it is not only in the wine. If you increase the tariff, the consumer pays it, and every time you reduce it some other person gets the benefit."

Now, some years ago when we reduced our tariff on champagne from $8 to $6 per case, the importer did not reduce the price of champagne. He simply saved that difference, and the price remained the same to the consumer.

So if you should reduce the tariff back to the old price of $8, the price of champagne would be just the same. The importer would not give the benefit to the consumer. At no time yet has the consumer received the benefit of any decrease of the duty on champagne or any other wine.

PARAGRAPHS 306-307-WINES.

Now, champagne can very well stand a high duty. The margin of profit is large enough to allow for promotion and spending money to get the "Broadway vote," as Mr. Harrison expresses it.

Coming to the mineral water schedule, that was also thoroughly thrashed out at the tariff hearing in 1908. I doubt if there is anything new to be added. The situation is just about the same.

The duty was raised a little to protect the glass industry, a third of a cent per pound on the bottles. The bottles had previously come in free. I doubt if the importers have suffered at all. I have here the statistics of the imports of mineral waters, and these imports run very regularly, showing that the small increase of duty has not seriously interfered with their importation.

I will read from table No. 3, imports of merchandise for the years ending June 30, 1907, up to 1911, at page 322. The figures show the imports of mineral waters in 1907, 1,156,368 bottles; in 1908, 1,179,965 bottles; in 1909, 1,173,540 bottles; in 1910, 1,095,822 bottles, and in 1911, 1,191.529 bottles. In other words, the slight increase of duty has not decreased the revenue or the importations to amount to anything.

Now, the mineral water importers did the very same thing that the wine importers did when the duty was raised.

One of the large importers of mineral waters sent out a notice to the trade, of which I have a copy here, dated August 11, 1909, notifying them of an increase of price of 50 cents per case. This was 25 cents per case more than the increased duty, which at one-third of a cent per pound amounted to only 25 cents a case. A case of mineral water weighs about 75 pounds, which, at one-third of a cent per pound, comes to 25 cents. The price was increased 50 cents.

In conclusion, I would say we are not asking for an increase. We "stand pat" on the present tariff. We think it is a good tariff. We think it is fair to the importers, and fair, in the protective sense, to our grape and wine-growing industry.

The brief of association represented by Mr. Vance follows:

AMERICAN WINE GROWERS' ASSOCIATION ASKS THAT THE PRESENT DUTY ON WINES AND CHAMPAGNES BE MAINTAINED.

The COMMITTEE ON WAYS AND MEANS,

House of Representatives, Washington, D. C.

NEW YORK, January 15, 1913.

GENTLEMEN: In addition to the verbal statements made this day in behalf of the grape-growing and wine-making industries of the United States, which ask that no change be made in the present rates of duty on wines (Schedule H, pars. No. 306 and No. 307), we beg to submit the following for your careful consideration:

1. This whole subject was very thoroughly gone into and discussed before the House Committee on Ways and Means of the Sixtieth Congress.

We refer to the facts and evidence submitted at the hearing on Schedule H on November 12, 1908, and to the briefs filed by both sides. All this appears in the printed report of Tariff Hearings, 1909, Schedule H, pages 4337 to 4453.

2. The present brief of the importing interests is largely a repetition of their former arguments. There are the same old claims-the same old misstatements-the same old propositions.

The plain facts against these claims, these misstatements and these propositions have not changed. The evidence for the need of present rates of duty on wines and champagnes is just as strong now as it was in 1909. This is particularly true as to the various items that enter into the cost of the production of domestic wines, as compared with the cost and selling price of foreign wines; such as extra cost of labor in the