BRIEF RELATIVE TO FOOD PRODUCTS FILED BY LOUIS J. SCARAMELLI, IN BEHALF OF THE ITALIAN CHAMBER OF COMMERCE OF NEW YORK CITY. WASHINGTON, D. C., COMMITTEE ON WAYS AND MEANS, Washington, D. C. GENTLEMEN: The Italian Chamber of Commerce in New York, a commercial body of American citizens, incorporated under the laws of the State of New York, representing important interests in both trade and consumption of Italian as well as of domestic products in the United States, and especially identified with the interests of agricultural products and provisions covered by Schedule G of the tariff law, respectfully submits to the consideration of this honorable committee, for adoption, the following recommendations respecting duties on articles coming under said schedule. This chamber believes that its recommendations will receive greater attention and carry greater weight with this honorable committee if the most relevant motives and facts that justify their suggestion be stated before those having a specific relation to each singular article. One of the most remarkable features of the economic intercourse between this and foreign countries during the last decade, namely, since the operation of the present tariff, has been the development of immigration to an unprecedented number, which was in itself both a consequence and a factor of the prosperity that until recently has marked the progress of this great nation, and we trust will mark it even in a greater measure in the future. This immigration, which has brought to our shores for the period stated 7,500,000 people, about 3,900,000 of whom are from Mediterranean countries, and about 1,754,000 from Italy alone, adding new useful strains to the already cosmopolitan character of the population of this country, has, by reason of its habits and tastes, determined a notable increase in the import trade from the Mediterranean countries, whence most of this population originates, as well as in the consumption of such American products as it is possible to obtain in this country on the lines of those originating from the old countries. Thus, importations from Italy, for instance, from a little over $20,000,000 in 1898, increased to about $50,500,000 in fiscal year 1907, the increase being chiefly in articles of food. But it must not be understood that this inflow of alien population did not advantage domestic industries as well, for the great development shown by such domestic industries as the macaroni, wine, and prepared-meat industries was in no small measure due to the demand arising from this increased immigration. The development of these industries-due mainly to immigration from Mediterranean countries-has not probably attracted as much attention as it deserves from the great body of native American population, by reason of the difference in habits and tastes and the comparatively little interest that is taken in the newcomers, save as a source of much exaggerated and unwarrantable fear of competition in the labor market. While from a superficial survey it would appear as if the interests of the domestic industries profiting by such immigration were op posed to those of the import trade from the countries of origin of this immigration, from a deeper study and analysis of actual conditions and facts, and their mutual relations, it is evidenced that the continuance and increase of this import trade is as necessary to the success of kindred domestic industries as this statement may at first seem paradoxical. The reasons are that the importation of such articles is first of all the preliminary and necessary step to the cultivation and maintenance of the habits and tastes upon which is based the consumption, not only of the foreign, but also of the similar domestic article; second, that the importation is the necessary safeguard for the continuation of the supply in cases of short crops or limited output or other causes, and the safety valve against any attempt of monopoly to the detriment of consumers; third, the fact that some of these articles, such as Roman cheese, are only produced abroad, or are yet and can only be produced in limited quantity, or can not be produced at all at reasonable price in the United States, such as olive oil; and last, the fact that the importation of several foreign food products bears such relation and interdependence, not only to other foreign articles, but also to articles of domestic production, that this importation is necessary to the home manufacturer in order to develop the consumption of his own product. Thus, for instance, the importation of Parmesan and Roman cheese, which are not produced at all in this country, and that of tomato paste is as essential to the consumption of domestic macaroni, because such products are used in the preparation of this food according to the taste of the consumers as is that of olive oil, used as condiment, to the consumption of New York or California beans, or of American codfish. The above-stated arguments, showing interdependence between foreign and domestic interests rather than opposition, or no reason for other than revenue duties on articles not produced or of impracticable production in the United States, should carry weight with this honorable committee in refusing to increase duties on articles under Schedule G, which are already amply protective, and to consider, on the other hand, favorable reductions on such articles as are now too heavily taxed, especially when is considered their economic function as a factor of consumption for other products, both domestic and foreign. Another important fact pertinent to the present tariff law under Schedule G, upon which this chamber desires to draw the attention of this honorable committee, is the inconvenience of the present system of ad valorem duties, or of combined ad valorem and specific duties. While, theoretically, an ad valorem duty system would seem the most logical way of collecting revenue upon imported merchandise, in the same way, for instance, as a gradual income tax theoretically appeals as the fairest system of public taxation, practically the ad valorem duties and the system of duties, ad valorem and specific combined, has not proven, under the line of goods covered by Schedule G, a desirable or fair system such as to conciliate without vexation. or friction, or with a minimum of these, the interests of trade with those of revenue. The difficulty inherent to ascertaining the market value of a foreign article, all the greater in countries where, by reason of want of industrial organization and systematic commercial methods, the causes and range of variability of such market value are numberless, sudden, and indefinite, and the penalties and losses often incurred by importers through absolutely no fault of their own, as well as the uncertainty and retarding influence on trade unavoidable while such system obtains; in brief, the hardships experienced by importers in consequence of this system of duties are more than sufficient to substantiate a plea for the substitution of specific duties to ad valorem or combined and ad valorem duties. Specific duties, fixed for each article (when no decrease of present ad valorem rate is asked for) at a rate corresponding to the quotient obtained by dividing the total revenue (fines excepted) derived from such article by the quantity of said article imported during a given number of recent years, sufficient to establish a fair average, should be substituted for the present ad valorem duties. The collection of such specific duties would entail less expense and eliminate the friction and vexation that is almost unavoidable with ad valorem rates, while the importer would know exactly where he stands in the matter of duty outlays. From the foregoing preliminary statement of basic facts and reasons underlying the revision of duties coming under Schedule G, pleaded for by this chamber, this institution passes to the following specific recommendations for singular articles: 229. Macaroni, vermicelli, and all similar preparations. The Italian Chamber of Commerce in New York, considering that goods under this paragraph, now paying duty at the rate of 1 cents per pound (which, at an average selling price for domestic macaroni in New York of about 3 cents per pound, is equivalent to a protection of about 45 per cent on domestic product), represent practically a staple of consumption for a large number of population of foreign birth; that domestic have over foreign manufacturers, besides the protection of the duty, the additional one of the maritime freight (7 cents per box of 22 pounds, or about one-third of 1 cent per pound); that American durum wheat flour enters now to a greater extent than heretofore into the manufacture of imported macaroni in substitution of Russian durum wheat flour, thus advantaging American agriculture; that the importers of macaroni have over domestic manufacturers, who prepare the goods according to demand, the disadvantage of cold-storage charges in order to prevent deterioration during hot weather; therefore recommends that no increase be made in the rate on macaroni and kindred products, as any such increase would not benefit the domestic manufacturer owing to the cheaper grade of macaroni made in this country, and would only prejudice the consumer, who demands the foreign article for certain specific qualities. American macaroni made from Russian wheat flour sells, after paying duty on flour, at $1.18-$1.20 per case of 22 pounds, against an average price of $1.35-$1.40 for imported macaroni, which shows. that macaroni can be sold even with foreign wheat flour cheaper in the United States than abroad. 232. Rice, cleaned. The Italian Chamber of Commerce in New York recommends a reduction of duty under this paragraph. Foreign rice pays a duty of 2 cents per pound, equivalent to a protection from 60 to 75 per cent on the domestic article, taking the extreme prices of domestic rice at 44 and 6 cents per pound. The fact that the best grade of South Carolina rice sells even at a higher figure than the imported, notwithstanding the duty that the latter has to pay, shows that there is no need of much fiscal protection on this article, the production of which has increased at the rate of about 400 per cent during the last decade, especially in the rich, dark, loamy soils of Louisiana and prairie lands of eastern Texas; so that in point of value rice is now the twelfth crop of the United States, with a total production for 1907 of 963,500,000 pounds, and a considerable export trade that depends upon the outcome of the crop, and reached in 1905 about 75,000,000 pounds, against about 43,500,000 pounds imported in the same fiscal year and 71,333,000 pounds imported in fiscal year 1907, in which latter amount Italy participated with about 3,000,000 pounds. Italian rice is demanded in this country for certain specific qualities of its own, which are essential in the preparation of certain food, and, as for this purpose it can not be substituted, this chamber recommends that the duty on this article be reduced to 12 cents per pound in order to relieve the consumer of the present too onerous rate. 237. Cheese. Dairy products. The Italian Chamber of Commerce in New York, under this paragraph, taxing cheese with a duty of 6 cents per pound, has the following remarks and recommendations to make: While the better paid kinds of imported cheese can stand this duty, in the case of the cheaper denominations it should, out of equity, be reduced proportionately to the lesser cost of the cheese, on the principle, however, of a specific duty. It does not seem right that a cheese selling at 20 cents per pound should pay duty at the same rate as one selling at 30 cents, but there should be a classification of cheese according to its description, and duties fixed specifically and differently for each kind of recognized commercial description. This would bring about a better distribution of the burden of duty. The duties should be lowest on such cheese as Roman, Parmesan, Gorgonzola, etc., which are not or can not be produced in the United States, and therefore do not come into competition with any domestic product, while a lower rate of duty than the present on such cheese would not only encourage consumption but also secure increased revenue to the Government, and indirectly favor the consumption of other articles, both domestic and foreign, to the use of which cheese is tributary or helpful. In any case the duty on cheese, if not better arranged by a scale of specific rates proportionate to the value represented by each singular description, should not be increased, as it is already equivalent to a protection of 38.7 to 300 per cent in favor of the domestic article. There is, perhaps, no other article as cheese which is demanded for certain specific characters of flavor and appearance peculiar to its own particular description, in which kind and quality of milk, process of manufacture and curing, aging, season of make, climatic conditions, country of origin, etc., are factors that can not often be reproduced at all outside of the foreign district where that given description of cheese is produced. Hence in the case of most descriptions of imported cheese it can not be said that the foreign article Fruits (other than citrus) and nuts. The California production of nuts is far from sufficient for the needs of consumption, as demonstrated by statistics, which show a notable increase in the importation of almonds, walnuts, filberts, and chestnuts, foreign countries still supplying 55 per cent of the consumption. The present duties of 4 cents per pound on unshelled almonds (par. 269), of 3 cents per pound on filberts and walnuts (par. 270), and of 1 cent per pound on chestnuts (par. 272), equivalent to a protection of 30 to 35 per cent in favor of the domestic interests are therefore, in the opinion of the Italian Chamber of Commerce in New York, burdensome to consumers, causing them to pay for these commodities higher prices to the extent of the protection stated, which can not but unfavorably affect the consumers, as it will require many years before domestic production reaches a position adequate to the needs of consumption. The duty on chestnuts, considering the alarming progress that the chestnut-bark disease is making in this country, which if it progresses at the present rate will destroy in a few years all chestnut trees in the United States, should be abolished, and this nut placed on the free list in order to enable the foreign supply to fill the deficiency in the American production caused by the disease in question, without consumers having to pay a too high price for this article. The duties on the other kinds of nuts should at least not be increased. The duty on figs of 2 cents per pound (par. 264), equal to an increase of about 40 per cent on the market value, should be reduced, as California is not yet in a position to supply the needs of consumption, her contribution in this direction being about 10,000,000 pounds, against 24,330,000 imported from abroad. Likewise the present duty of 25 cents per gallon on olives, green or prepared in bottles, jars, or similar packages, and of 15 cents per gallon on the same product in casks (par. 264), representing an increase in the original cost of at least 75 per cent, should be reduced to 10 cents per gallon for such goods in casks, as comparatively small is the production of olives, nor can it ever amount to such proportion as to warrant a sacrifice on the part of consumers. In 1899 the total crop of olives in California amounted to 5,040,227 pounds, the number of trees reported to the Twelfth Census on June 1, 1900, being 1,530,164. Owing to the slow growth of the olive tree, it would require many years for new plantations to come into full bearing, and with the high cost of labor in California the olive industry can not be expected to develop to any notable extent, for the present at least, as cheap labor is required for the gathering of the fruit. In the meantime, at the present rate, consumers would have to pay a high protective duty, while there is practically little to protect. Olive oil. For the same reason this chamber enters a plea for the reduction of duties on edible olive oil, which, although not coming under this schedule nor paragraph, but under Schedule A, oils, paragraph 40, is considered a provision, and pays duty at the rate of 40 cents per gallon in casks and 50 cents per gallon in bottles, jars, tins, or similar packages. |