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U.S. Conness, House,
HOUSE OF REPRESENTATIVES
SCHEDULE H-SPIRITS, WINES, AND
COMMITTEE ON WAYS AND MEANS.
HOUSE OF REPRESENTATIVES.
OSCAR W. UNDERWOOD, Alabama, Chairman. CHOICE B. RANDELL, Texas.
ANDREW J. PETERS, Massachusetts. FRANCIS B. HARRISON, New York. A. MITCHELL PALMER, Pennsylvania. WILLIAM G. BRANTLEY, Georgia.
TIMOTHY T. ANSBERRY, Ohio. DORSEY W. SHACKLEFORD, Missouri. SERENO E. PAYNE, New York. CLAUDE KITCHIN, North Carolina.
JOHN DALZELL, Pennsylvania, OLLIE M. JAMES, Kentucky.
SAMUEL W. MCCALL, Massachusetts. HENRY T. RAINEY, Illinois.
EBENEZER J. HILL, Connecticut. LINCOLN DIXOX, Indiana.
JAMES C. NEEDHAM, California. CORDELL HULL, Tennessee.
JOSEPH W. FORDNEY, Michigan, WINFIELD S. HAMMOND, Minnesota. NICHOLAS LONGWORTH, Ohio.
DANIEL C. ROPER, Clerk. II
6 hlil/e your
H.-SPIRITS, WINES, AND OTHER
COMMITTEE ON WAYS AND MEANS,
HOUSE OF REPRESENTATIVES,
Wednesday, January 15, 1913. The committee met at 10 o'clock a. m., Hon. Oscar W. Underwood (chairman) presiding.
Present with the chairman: Messrs. Harrison, Shackleford, Kitchin, James, Rainey, Dixon, Hull, Hammond, Palmer, Ansberry, Payne, Dalzell, Hill, Needham, and Fordney.
The CHAIRMAN. The committee will come to order.
TESTIMONY OF FRANCIS E. HAMILTON, 32 BROADWAY, NEW YORK CITY, COUNSEL FOR THE WINE & SPIRIT TRADERS' SOCIETY OF THE UNITED STATES.
Mr. Hamilton. I appear here to ask that Schedule H be modified and that my remarks are contained in this brief far better than I can express them to the committee. Unless we can show the committee that we can gain more revenue by a reduced rate, I do not think there is anything more that we can say or try to say.
BRIEF' OF THE WINE & SPIRIT TRADERS' SOCIETY OF THE UNITED
Schedule H, paragraphs 300-3121, inclusive, wines, liquors, alos,
NEW YORK, January 15, 1918. The WAYS AND MEANS COMMITTEE,
House of Representatives, Washington, D. C. GENTLEMEN: Your petitioners, the Wine & Spirit Traders' Society of the United States, comprising the large majority of all importers of wines, spirits, cordials, liqueurs, ales, mineral waters, and other beverages covered by Schedule H, of the tariff act, do most respectfully request the following modifications and reductions of tariff
rates as now imposed, and submit the following brief for your consideration. Respectfully, THE WINE & SPIRIT TRADERS' SOCIETY
OF THE UNITED STATES. By its council: F. G. Herman Fayen, of Chas. F. Schmidt
& Peters (Inc.), president; Henry E. Gourd, of Henry E. Gourd, first vice president; Irving K. Taylor, of W. A. Taylor & Co., second vice president; Maurice La Montagne, of E. La Montagne's Sons, treasurer; Horace I. Bowne, of Loeser Bros. & Gilmore, secretary; Lucien Antoine, of Williams & Humbert; Henry A. Batjer, of Batjer & Co.; Arthur J. Billin, of Jas. Buchanan & Co.; Cesare Conti, of Cesare Conti; Eugene J. Cantin, of Luyties Bros.; William J. Davies, of John Dewar & Sons (Ltd.); H.P.Eschwege, of Francis Draz & Co.; L. de W. Hollub, of Thos. McMullen & Co.; George D. F. Leith, of Wm. G. Moehring & Co.; Grosvenor Nicholas, of Ġ. S. Nicholas & Co.; Frederick Renken, of The Mumm Champagne & Importation Co.; Alex. D. Shaw, of Alex. D. Shaw & Co.; C. H. Simonds, of F. O. de Luze & Co.; David R. Ward, of Bass & Co.; Alfons Wile, of Julius Wile, Sons & Co.
FRANCIS E. HAMILTON, General Counsel, 32 Broadway, New York City.
SCHEDULE H.—Paragraphs 300 to 312, inclusive, proposed tarif. Paragraph 300. Brandy and other spirits manufactured or distilled from grain or other material, and not specially provided for in this section, $1.75 per proof gallon.
ARGUMENT UPON PARAGRAPH 300. The official figures are here given showing the value of importations under this paragraph and the amount of duty paid from 1900 to 1912, inclusive. The year 1909 is not included in the calculation, since that being the year of the tariff change the importations were abnormal prior to August 1.
From the above it will be noted that there was a steady annual increase in the value of imports from $2,771,321 in 1900 to $6,249,470 in 1908, and upon examination it will be found that with the exception of a single year this increase was from 6 per cent to 20 per cent annually, averaging over 12 per cent; while at the same time the amount of duty paid increased from $3,726,849 in 1900 to $7,686,984
in 1908, being an annual increase ranging from 10 per cent to 21 per cent, averaging about 14 per cent.
Omitting the year 1909 for the reason given above, an examination of the figures for the years 1910-11-12 shows that the importations have decreased annually from $7,227,841 in 1910 to $6,230,554 in 1912, being a loss of about 14 per cent; and at the same time the amount of duty paid has fallen from $9,115,898 to $8,942, 120, being a loss of about 2 per cent.
It must also be noted that while the loss of duty in 1911 as against 1910 was only $22,871, the loss in 1912 as against 1911 was $150,907, or seven times as great. The reason for this was that the increased tariff rate as against imports from Italy, Portugal, and Spain, and the Netherlands did not take effect until August 7, 1910, and consequently abnormal imports of brandies and gins under the low tariff continued well into the fiscal year of 1910, largely increasing
the duty returns for that year. The only correct comparison lies between 1911 and 1912. Upon the same ratio the loss in 1913 as against 1912 would be almost $1,000,000.
The reason for this lies in the increased tariff rate. Foreign spirits compelled to pay an import duty of $2.60 per proof gallon as at present can no longer compete with domestic spirits paying an internal-revenue tax of $1.10 per proof gallon, and as a result the importation of these goods must, as a business necessity, decline from year to year until it ceases.
With the natural normal increase of population there should be a corresponding increase in the importation and consumption of imported wines and liquors. Instead of increasing as a result of the increased population, the importations have actually decreased.
If the rate under the former tariff act is reestablished, however, there is no reason to doubt that the revenue to the Government will in the future continue slowly to increase as it did during the years 1900 to 1908.
Par. 301. No change suggested.
Par. 303. Cordials, liqueurs, arrack, Kirschwasser, ratafia, and other spirituous beverages or bitters of all kinds containing spirits, and not specially provided for in this section, $1.75 per proof gallon.
ARGUMENT UPON PARAGRAPH 303.
This rate of duty should agree with the rate requested for paragraph 300, and the same argument applies.
Par. 304. No change suggested.
Par. 306. Champagne and all other sparkling wines, in bottles containing each not more than 1 quart and more than 1 pint, $6 per dozen; containing not more than 1 pint each and more than one-half pint, $3 per dozen; containing one-half pint each or less, $1.50 per dozen; in bottles or other vessels containing more than 1 quart each, in addition to $6 per dozen bottles on the quantity in excess of 1 quart, at the rate of $1.90 per gallon; but no separate or additional duty shall be levied upon the bottles.
ARGUMENT ON PARAGRAPH 306. The following figures are given as showing the importations of champagne and other sparkling wines from 1906 to and including 1911, taken from the tables of the Department of Commerce and Labor, Bureau of Statistics:
1906. 1907. 1908.
$3,323, 152 3,355, 224
415, 394 $6, 127,062 $8.
1908; $6 from Feb. 1, 1908, to June 30,
1909; $9.60 from Nov. 1, 1909, to June
30, 1910, approximately.. 218, 495
3,566, 824 $9.66.
2,505, 574 2,619, 768
3, 284, 426 2,097, 552
It appears that from 1906 to 1909, inclusive, there was a steady increase in the quantity and value of importations of champagnes and other sparkling wines excepting in the year 1908, when the business conditions were unfavorable.
The duty on French champagnes and other sparkling wines was advanced to $9.60 on November 1, 1909, and as a consequence there was a large increase in the importations of wines prior to that date in order to secure the benefit of the lower duties prevailing up to that period. This accounts for the large amounts of duty collected in
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