nitrotoluylenediamin, phenol, phenylenediamin, phenylhydrazine, phenylnaphthylamin, phenylglycocoll, phenylglycocoll-orthocarboxylic acid, phthalic acid, phthalic anhydride, phthalimid, resorcin not suitable for medicinal use, salicylic acid and its salts not suitable for medicinal use, sulphanilic acid, thiocarbanilid, thiosalicylic acid, tetrachlorphthalic acid, tetramethyldiaminobenzophenone, tetramethyldiaminodiphenylmethane, toluol sulphochloride, toluol sulphamid, tribromphenol, toluidin, tolidin, toluylenediamin, xylidin, or any sulphoacid or sulphoacid salt of any of the foregoing, or of any of the products provided for in Group I; all other products by whatever name known which are employed in the manufacture of any of the products provided for in Group II or III and which are obtained, derived, or manufactured in whole or in part from any of the foregoing or from any of the products provided for in Group I; anthracene having a purity of 30 per centum or more, carbazol having a purity of 65 per centum or more, metacresol having a purity of 90 per centum or more, naphthalene having a solidifying point of seventy-nine degrees centigrade or above, orthocresol having a purity of 90 per centum or more, paracresol having a purity of 90 per centum or more; all distillates of coal tar, blast-furnace tar, oil-gas tar, and watergas tar which on being subjected to distillation yield in the portion distilling below one hundred and ninety degrees centigrade a quantity of tar acids equal to or more than 5 per centum of the original distillate; all mixtures, including solutions, consisting in whole or in part of any of the foregoing except sheep dip and medicinal soaps, not otherwise specially provided for in this act; all the foregoing not colors, dyes, or stains, color acids, color bases, color lakes, leucoacids, leuco-bases, indoxyl, indoxyl compounds, ink powders, photographic chemicals, medicinals, flavors, synthetic resin-like products, synthetic tanning materials, or explosives, and not otherwise specially provided for in this title. 35 per centum ad valorem.

"Group III. All colors, dyes, or stains, whether soluble or not in water, color acids, color bases, color lakes, leuco-acids and leuco-bases whether colorless or not, indoxyl and indoxyl compounds; ink powders; photographic chemicals; acetanilid suitable for medicinal use, acetphenetidin, acetylsaliclic acid, antipyrine, benzaldehyde suitable for medicinal use, benzoic acid suitable for medicinal use, betanaphthol suitable for medicinal use, phenolphthalein, resorcin suitable for medicinal use, salicylic acid and its salts suitable for medicinal use, salol, and other medicinals; sodium benzoate; saccharin, methylsalicylate, coumarin, and other flavors; synthetic phenolic resin and all resinlike products prepared from phenol, cresol, phthalic anhydride, coumaron, indene, or from any other article or material provided for in Group I or II, all of these products whether in a solid, semisolid, or liquid condition; synthetic tanning materials; picric acid, trinitrotoluol, and other explosives except smokeless powders; all of the foregoing when obtained, derived, or manufactured in whole or in part from any of the products provided for in Group I or II; natural alizarin and natural indigo, and colors, dyes, stains, color acids, color bases, color lakes, leuco-acids, leuco-bases, indoxyl, and indoxyl compounds obtained, derived, or manufactured in whole or in part from natural alizarin or natural indigo; natural methyl salicylate or oil of wintergreen or oil of sweet birch; natural coumarin; and all mixtures, including solutions, consisting in whole or in part of any of the articles or materials provided for in this group, 50 per centum ad valorem.

"SEC. 501. That on and after the day following the passage of this act, in addition to the duties provided in section 500, there shall be levied, collected, and paid upon all articles contained in Group II a special duty of 6 cents per pound, and upon all articles contained in Group III a special duty of 10 cents per pound: Provided, That the special duties herein provided for on colors, dyes, or stains, whether soluble or not in water, color acids, color bases, color lakes, leuco-acids, leuco-bases, indoxyl and indoxyl compounds, shall be based on standards of strength which shall be established by the Secretary of the Treasury, and that upon all importations of such articles which exceed such standards of strength the special duty of 5 cents per pound shall be computed on the weight which the article would have if it were diluted to the standard strength, but in no case shall any such articles of whatever strength pay a special duty of less than 5 cents per pound: Provided further, That beginning six months after the date of passage of this act no package containing any such color, dye, stain, color acid, color base, color lake, leuco-acid, leuco-base, indoxyl, or indoxyl compound shall be admitted to entry into the United States unless such package and the invoice shall bear a plain, conspicuous, and truly descriptive statement of the identity and percentage, exclusive of diluents, of such color, dye, stain, color acid, color base, color lake, leuco-acid, leuco-base, indoxyl, or indoxyl compound contained therein: And provided further, That beginning six months after the date of passage of this act, no package containing any such article shall be admitted to entry into the United States if it, or the invoice, bears any statement, design, or device regarding such article or the ingredients or substances contained therein which is

false, fraudulent, or misleading in any particular. In the enforcement of this section the Secretary of the Treasury shall adopt standards of strength which shall conform as nearly as practicable to the commercial strengths in use in the United States prior to July 1, 1914.

"The Secretary of the Treasury is hereby authorized to make regulations for the enforcement of the provisions of this title.

"SEC. 502. That paragraphs 20, 21, 22, 23, 179, 394, 452, and 514; and the provision for salicylic acid in paragraph 1; and provisions for salol, phenolphthalein, acetanilid, acetphenetidin, antipyrine, acetylsalicylic acid, and aspirin in paragraph 18; and the provision for benzoate of soda in paragraph 67; and the provisions for carbolic and phthalic acids in paragraph 387 of an act entitled 'An act to reduce tariff duties and to provide revenue for the Government, and for other purposes,' approved October 3, 1913, are herby repealed: Provided, That all articles which may come within the terms of paragraphs 1, 5, 37, 46, 63, 501, and 538 of said act of October 3, 1913, as well as within the terms of Group I, II, or III of section 500 of this act, shalĺ be assessed for duty or exempted from duty, as the case may be under this act.

"SEC. 503. That on and after the day when this act shall go into effect all of the foregoing goods, wares, and merchandise previously imported, for which no entry has been made, and all of the foregoing goods, wares, and merchandise previously entered without payment of duty and under bond for warehousing, transportation, or any other purpose, for which no permit of delivery to the importer or his agent has been issued, shall be subject to the duties imposed by this act, and to no other duty, upon the entry or the withdrawal thereof: Provided, That when duties are based upon the weight of merchandise deposited in any public or private bonded warehouse said duties shall be levied and collected upon the weight of such merchandise at the time of its entry.

"SEC. 504. Except as otherwise herein specially provided, this act shall take effect on the day following its passage."

STATEMENT OF HON. J. HARRY COVINGTON, WASHINGTON, D. C., OF COUNSEL FOR THE CHEMICAL FOUNDATION (INC.) AND THE AMERICAN DYES INSTITUTE.

Mr. COVINGTON. This hearing that is about to take place is to demonstrate the necessity, at the present time, of a stimulus to the coal-tar chemical industry in the United States, and it does not make very much difference what a man's predilections may be in regard to the general economic policies generally that should obtain in the country to have him favor the coal-tar chemical industry when he understands it. As a matter of fact, it has been pretty thoroughly demonstrated that this industry, the coal-tar chemical industry, is so inseparably interwoven with the industrial independence of a nation, and its program for national defense, that it must at all hazards exist in a country which is to be in reality one of the great independent nations of the world.

For that reason, the Chemical Foundation, which has rather recently become the owner of practically all of the former Germanowned patents in the United States, covering both medicinals and dyestuffs, has undertaken in conjunction with the pending bill of Mr. Longworth to assemble for the committee, in logical form, the story of the necessity of a coal-tar chemical industry. Mr. Joseph H. Choate, of New York, and myself are the counsel for that organization as well as for the American Dyes Institute, and with some. appreciation of the time this committee has to take with hearings, and the realization it must act with rapidity, we have taken the liberty of putting together, in what we believe is the most logical form, the story as it will be related by various witnesses. It is not a thing that needs legal argument; it is not a matter that I should occupy the time of this committee by presenting to you by experts; it is a story that can be unfolded in such way as to demonstrate to you

the necessity, at all hazards, of fully establishing this industry, no matter how severe the conditions may be.

The story will come to you from the lips of those who are connected with our Army, and who have seen the necessity for chemical warfare and the progress of chemical warfare; the story of those who are scientific research men and who have found out how inseparably the coal-tar chemical industry is associated with those medicinals necessary for the very life and being of our people. And the story of our producers of dyestuffs is interwoven with the necessity of thoroughly regulating the importations into this country of dyestuffs made in Germany so as merely to supply those immediate needs of our textile consumers, if we are to have this independent industry. And finally there will be the story of the consumers of the great dyestuffs used in this country, as indicating a willingness on their part to coperate and help to establish this great independent industry by subscribing to the policy of restrictive legislation for a space, down to the point where they can get only those stuffs that are not produced in this country.

With that simple statement, I am going to ask you to call these gentlemen in the order in which I have listed their names, because they have the facts and the arguments which you need. I am going to ask each of you to take a copy of the very informing brief prepared by Mr. Joseph H. Choate, who is chief counsel of the Chemical Foundation, Incorporated, and to have it with you during the progress of this hearing. We are going to try to be as brief as possible, and I will say to you gentlemen that the list of witnesses has been assembled with the idea that there shall not be any duplications and repetitions of those things which the preceding witness has gone into.

STATEMENT OF DR. GRINNELL JONES, CHEMICAL EXPERT, UNITED STATES TARIFF COMMISSION.

Mr. COVINGTON. Dr. Jones, I may say, simply wants to present the report of the Tariff Commission at this time, and then he will hold himself at the will of the committee to go at such length into the subject as the committee desires, as far as their investigations have gone.

Mr. JONES. My name is Grinnell Jones. I am a chemist on the staff of the Tariff Commission, having general charge of the investigations of the commission on chemicals, including dyes and related products.

On September 8, 1916, Congress passed a special tariff law raising the duties on dyes and related coal-tar chemicals. Immediately following this legislation, in the same law, will be found the legislation creating the United States Tariff Commission and instructing the commission to assemble information pertinent to the tariff for the use and convenience of Congress in framing tariff laws.

The commission realized that the new dye industry would present one of the most important and at the same time the most complex and highly technical problems in tariff readjustment whenever the war-time restrictions on international trade are removed.

The work which the commission has done on this industry is of a fourfold character: First, a study of the effect of the dye shortage on the consumers of dyes; second, a detailed study of the develop

ment of the new American dye industry; third, a careful study of the phraseology and operation of the existing tariff law, and the court decisions in litigation under this law, with a view to suggesting amendments which would give legal effect more perfectly and completely to the evident intent of Congress; fourth, a study of costs of production. Preliminary plans have been made for an investigation of costs of production which, however, can not be pushed to completion unless additional appropriations are available.

I propose to outline the most important conclusions of each of these inquiries in turn.

Inquiries were directed to a large number of representative consumers in August, 1917, to ascertain how the consumers had been affected by the shortage of dyes. The main results of this inquiry were published in a little pamphlet early in 1918. There was little actual closing of textile mills on account of dye shortage, but such shutdowns were only averted by a very narrow margin and by the most desperate expedients before the American production had developed sufficiently to save the situation. A large majority of the consumers expressed the hope that the dye industry should be given sufficient protection to insure a vigorous development in the United States. A similar inquiry sent out in February, 1919, showed that the situation from the consumers point of view had greatly improved, but is still not entirely satisfactory.

A more important line of investigation was a study of the progress of the American industry by means of detailed reports from all manufacturers showing their production of individual products. This investigation was made at the request of the President in order to prepare for the enforcement of a clause in the present law which requires that on September 8, 1921, the President shall issue a proclamation reducing the rates of duty unless the American industry has developed sufficiently by that date to supply 60 per cent of the domestic consumption. We have taken a census of production showing in detail the output of individual dyes and drugs or other finished products and also of 1aw materials and intermediate products for 1917 and 1918. The results of the 1918 census are now before you in a pamphlet entitled "Report on Dyes and Related Coal-Tar Chemicals, 1918." That pamphlet goes into great detail on the difficulties confronting the American industries.

The output of dyes during 1918 was 57,155,600 pounds, which is a gain of almost 25 per cent over the 1918 output, which was almost exactly equal to the imports during the year preceeding the outbreak of the European war. In 1917, more than 300 different dyes were made. However, in spite of the great and encouraging progress, the American industry is still unbalanced.

The American industry has been especially successful in producing the classes of dyes known as "azo" dyes, sulphur dyes, and induline dyes, and has had considerable success in making triphenylmethane dyes and indigo. On the other hand, many important dyes are still missing entirely, or only made in small experimental lots.

Conspicuous among the undeveloped branches of the dye industry. are the alizarin dyes and a whole series of so-called "vat" dyes for cotton, derived from the raw material anthracene. These dyes are the fastest dyes known, and are absolutely essential for ginghams and cotton shirtings of the best quality. The scarcity of these dyes has

forced the substitution of less satisfactory dyes with results that have unfortunately damaged the reputation of all American dyes. Experimental work on these dyes has been active, but actual production has been negligible up to the present time. There is, however, no question that these dyes will be produced within a short time, provided the companies feel that they have sufficient protection to justify them in making the necessary additional investments required. There were 77 firms that reported the manufacture of dyes during 1918.

During this same period there has been a notable development of other products derived from coal tar. The importance of coal-tar products for the manufacture of explosives is so familiar that I do. not need to elaborate it here.

Nearly 10,000,000 pounds of color lakes were made during 1918. Nearly a third of a million pounds of photographic developers were made by six firms. Flavors of coal-tar origin reached an output of nearly a half a million pounds and perfume materials more than 100,000 pounds. Synthetic resins and tanning materials contributed over 4,000,000 pounds to the total. The development of the manufacture of synthetic drugs is, however, of the greatest public importance. During 1918, 32 different drugs of coal-tar origin were made by 31 firms, with an output of more than 3,500,000 pounds, valued at nearly $8,000,000. Three of these synthetic drugs were in great demand during the recent influenza epidemic, and, if it had been necessary to rely on imports in such an emergency, the situation would have been much worse than it was. Still another drug of exceptional importance is arsphenamine, or salvarsan, which is generally regarded as the most effective remedy for syphilis. This drug was made by three American producers and sold at a price substantially below the price at which it was sold by the Germans before the war.

The total output of finished products of coal-tar origin, exclusive of poison gases and explosives, was 75,494,113 pounds, valued at $83,095,404.

The report which you have before you contains a great deal of detailed and hitherto unpublished proof of the great achievements of the industry. This report also contains a narrative of the principal events of interest in the development of the industry since the outbreak of the European war. As a result of its study of this industry the commission has reached the following conclusions: Dyes are essential for the production or at least the salability of a great variety of products having a value many times the value of the dyes themselves. And, therefore, there is a strong argument for developing the dye industry not primarily for its sake but rather for a kind of insurance for many other much larger industries which consume dyes and which are dependent upon them. Furthermore, it is important that the dye industry should be developed as a part of any program of military preparedness on account of its close relationship to the manufacture of explosives and poison gases.

The second conclusion is that there are no inherent or permanent obstacles to the development of the industry on a secure economic basis. The essential raw materials are all available and are produced under favorable conditions. The progress in this and other lines is a