It will be noted that prices in July, 1921, were very little higher than in 1914; in one case the July, 1921, price is lower than the 1914 price. An unusual feature in the situation is that the price list of 1914 remained operative up to October, 1919. In other words, there was no increase during the war. The increase made in 1919 averaged 22.3 per cent for Azo and 19.8 per cent for Velox. From October, 1919, to the present time (November, 1921) there has been no increase.

BLUE-PRINT PAPER.

The prices furnished by different sensitizers of blue-print paper show a great variation in the tendencies of the prices of different concerns during and since the war. The following table shows the prices charged by one manufacturer to consumers for finished blueprint paper of 50 per cent rag stock in 50-yard rolls of three standard widths:

The prices on 100 per cent rag paper charged by the manufacturer in question averaged generally about 40 per cent higher than the prices of the 50 per cent rag stock.

The above figures show a great increase in present prices over pre-war prices, the increase amounting in each case to considerably over 100 per cent. Figures furnished by certain other manufacturers indicate a much smaller increase. One manufacturer reports the average price in June, 1921, of 50-yard rolls, 36 inches wide, 50 per cent rag, to have been $2.85 per roll compared with an average pre-war price of $2.25, while the price of the same size roll in 100 per cent rag stock increased from $4.75 to $5.44; increases in other sizes and grades were in somewhat the same proportion.

TARIFF HISTORY.

Under the tariff acts of 1890, 1894, and 1897 albumenized or sensitized paper bore duties of 35, 30, and 30 per cent ad valorem, respectively. The raw paper was first separately named by the act of 1897, being made dutiable at 3 cents per pound and 10 per cent ad valorem. The act of 1909 made no change in the rates of 1897. The act of 1913 reduced the duty on sensitized paper to 25 per cent ad valorem and changed the duty on raw paper to 15 per cent ad valorem.

The 1913 change in duty on sensitized paper was only 5 per cent. No effect from the reduction is discernible in the volume of imports. The change in duty on raw paper constituted a material reduction. In the last three years during which the act of 1909 was in operation the ad valorem equivalent duty collected on plain basic paper aver

aged nearly 29 per cent. The 1913 rate was 15 per cent. However, war conditions obscured the effect of the lowered tariff, and it is impossible to say whether or not the decreased rate would have resulted in increased imports had conditions remained more nearly normal. In actual fact, imports of plain basic paper fell off sharply during the war.

COMPETITIVE CONDITIONS.

Sensitized blue-print paper.-In considering competitive relations with foreign countries, sensitized blue-print paper may be left out of consideration as it is imported in only negligible amounts. One reason for this is the same fact that partially accounts for the absence of exports of this commodity, namely, that it quickly deteriorates with age. Another reason, as given by a domestic manufacturer of sensitized blue-print paper, is that the raw paper of the cheaper grades made in the United States costs the sensitizer less than European paper of the same quality sells for. What small quantities of finished blue-print paper are imported are of the higher grades.

Raw blue-print paper.-The manufacturer quoted on the absence of foreign competition in sensitized blue-print paper, states also that imports of raw blue-print paper are too limited to be of concern to American manufacturers of the raw paper. He adds that the raw paper import is of a quality and finish that is not procurable in the United States and is imported only for certain special purposes. On the other hand, a manufacturer of raw blue-print paper states that since the war the influx of foreign paper at a low price has cut materially into his business.

Raw photographic paper.-Foreign competition is much more serious, however, in the photographic paper industry. Before the war the imports of raw photographic paper were probably a considerable proportion of the total paper sensitized, apparently running sometimes as high as one-half. When war conditions caused a decline in imports, a number of plants were constructed to meet the deficiency. These new plants, and naturally the old ones too, are seriously menaced by a renewal of the old import trade, for the combined capacity of the present mills plus a possible pre-war scale of imports would be more than enough to supply the domestic demand. Apparently thus, a portion of the domestic trade or a portion of the import trade must be sacrificed, and upon the decision as to which depends the amount of duty that should be placed on the raw photographic paper.

It may be of significance to analyze the arguments set forth by producers and consumers of raw photographic paper. A concern that for many years prior to the war made raw photographic paper says that immediately following the reduction in duty in 1913, foreign competition began to be formidable, and but for the war would have driven it out of business. It says that at the present lower foreign prices, if the duty remains unchanged, it will have to close its mills. A company which undertook the manufacture of raw photographic paper during the war has entirely ceased making that kind of paper, stating that its war-time customers are returning to foreign sources of supply because the American cost of production is higher than the price of the foreign paper delivered in the United States. A large concern which sensitizes all or a large part of its output also states that the American cost of production of raw paper

is higher than the price of the foreign paper delivered in the United States. All the companies referred to desire to have the American product protected, their contention being that the American raw paper is satisfactory to the American consumer.

This contention, however, is contraverted by a large sensitizing firm that does not make its own raw paper. It maintains that the American product, as far as it is sold to sensitizers, is not so good as the imported paper, and that whatever the duty, it must continue to import raw paper if the quality of its product is to be kept up. The following reasons are assigned for the inferior quality of the domestic product: (1) The water available in this country is not so good for the purpose as that available in Europe; (2) linen rags and other raw materials are more easily obtained in Europe; and (3) the art of raw photographic paper making has not been developed as far here as in Europe, and the workers in the mills have not had as careful training. The same company states that it has failed to interest American mills in attempting to produce paper of the quality produced in Europe.

The truth seems to be that in the United States, in the photographic paper industry as in other lines of business, it ordinarily brings higher returns, for a given amount of capital, to maintain a large output of medium-grade products than to maintain a small output of high-grade products.

American manufacturers generally agree that in regard to water, the United States, particularly New England, is at no disadvantage as compared with Europe. On the other hand, it is asserted in other quarters that foreign manufacturers of raw photographic paper have uniformly refused, because of the unsuitability of the water, to establish mills in the United States. The European advantage of more easily obtainable rags and other raw materials may very likely make possible a somewhat lower cost of production, but not necessarily a superior quality of product. Advantages in training and skill of workers and superior technique are hard to overcome, but they can be surmounted if American manufacturers will make the effort.

Summing up the situation, it may be said that whatever the comparative quality of the domestic and imported raw photographic paper, the advantage of lower cost of production is likely to be with the European mills for some time to come, and that because of increased equipment installed during the war a return of imports to their pre-war volume might seriously embarrass the domestic industry. Sensitized photographic paper.—Foreign competition in sentitized photographic paper is apparently not so keen an issue as in the raw paper. The proportion of imports to domestic production is considerably less than in the case of the raw paper, for not only is domestic production of sensitized paper greater, but the absolute quantity of imports (though not always the value) has in the last 13 years probably been much less than the quantity of imports of raw paper, although, as stated above, import figures for raw photographic and raw blue-print paper can not be separated.

A large manufacturer of sensitized photographic paper says that protection for the American sensitizing industry is needed because Germany can produce it at a lower cost. The main reason assigned for the difference in cost is that most of the sensitizers in this country are to a large extent dependent on imported raw paper, barium sulphate,

and gelatin, on account of the fact that the qualities of these materials needed are not available to sensitizers in this country. The German manufacturer, on the other hand, can secure these materials cheap in his own country. The lower cost of labor in Germany and the low external value of the mark compared with its value inside Germany also aid the German in marketing his paper in the United States.

IMPORTS FOR CONSUMPTION-REVENUE.

Photographic paper, plain basic for albuminizing, sensitizing, or baryta coating for photographic or solar printing process.

IMPORTS FOR CONSUMPTION-REVENUE continued.

Photographic paper, albuminized or sensitized or otherwise coated.

Act of 1913, paragraph 381: * * * cigarette books, cigarette-book covers, and cigarette paper in all forms, except cork paper, 50 per centum ad valorem.

DESCRIPTION AND USES.

Cigarette paper, as the name implies, is used in making cigarettes, both by the factory and by the smoker. By far the greater part goes into factory-made cigarettes. It is a light white paper.

It is suggested that cigarette paper, along with cigarette books 'and cigarette-book covers, be transferred from its present location in the sundries schedule to the paper schedule.