Mr. CLARK. I suggest this gentleman testify in the morning. Mr. CLARK. All right; go on. The CHAIRMAN. Is your brief all written out? Mr. BURCH. No, sir; this is a proposed amendment to the tariff bill. The CHAIRMAN. What paragraph? Mr. BURCH. That I have not gotten here. The CHAIRMAN. What is the subject? Mr. BURCH. Drawbacks. The CHAIRMAN. Oh, drawbacks. Mr. BURCH. Yes; this has nothing to do with increasing the tariff or lowering the tariff. The CHAIRMAN. Go ahead; read it. Mr. BURCH (reading): That on the exportation of spirits, whisky, brandy, and cordials manufactured or produced in the United States on which an internal-revenue tax has been paid there shall be allowed a drawback equal in amount to the tax paid on same The CHAIRMAN. I want to suggest to you that it is unnecessary to read that full amendment. You can file that and it will be printed. Now, state the reasons for it, and we will consider your amendment. State the reasons for a drawback on alcohol. Mr. BURCH. The reasons for it mainly are that the present manner of exporting spirits is so tied up with red tape and circumlocution that we are absolutely prevented from getting our stuff out of the country, and if we are going to get an export business we have got to have the laws modified so that we can export. This also provides for a drawback on manufactures of distilled spirits. A concern in my city-Detroit-in October of 1908, this year, got this decision on the exportation of herpicide, manufactured by the Herpicide Company, of Detroit, Mich. : That in the use of imported alcohol a drawback will be allowed equal in amount to the duty paid on the imported materials used, less the legal deduction of 1 per cent. Those people are compelled to import German alcohol to Detroit, manufacture it, and get a drawback of the duty paid, instead of using domestic, American alcohol, which they could do with the proposed amendment that I am asking for. The CHAIRMAN. We will have your amendment submitted to the Internal Revenue Bureau and have their opinion of it, as well as printed in the record, and study it carefully ourselves. Mr. BURCH. This matter came up, Mr. Chairman, in 1902, and that time the objection raised was that we already had a method of exporting. Now we have two ways of getting spirits out of this country. One is by putting them up in a manufacturing warehouse set aside specially for that purpose, which is very cumbersome and very expensive; the other is to export bottled in bond from distillery warehouses. Both of them have proved ineffectual. We are unable to do business under the regulations as provided by the department, and we desire to get some simple method of getting our product out of the country. In fact, the same product is brought in from foreign countries now, and this amendment provides that the appraiser of customs at the port of export shall determine the amount of the drawback. In other words, we want to get the matter so simple that we can get our product out of this country as easily as the foreign shipper can get his product in here. If we can do that we can get a foreign business. Mr. FORDNEY. You have an amendment prepared, have you? The CHAIRMAN. Hand that to the reporter and let him put it in. (The amendment referred to is as follows:) An amendment to the tariff bill to encourage the sale and exportation of articles of domestic manufacture. SECTION 1. That on the exportation of spirits, whisky, brandy, and cordials manufactured or produced in the United States on which an internal-revenue tax has been paid there shall be allowed a drawback equal in amount to the tax paid on same. SEC. 2. That on the exportation of articles manufactured or produced in the United States in part from domestic alcohol on which an internal-revenue tax has been paid there shall be allowed a drawback equal in amount to the tax paid on the alcohol so used: Provided, That no other than domestic tax-paid alcohol shall have been used in the manufacture or production of such articles. Such drawback shall be determined by the appraiser of customs at port of exportation and paid in manner provided for payment of drawback on exportation of articles of domestic manufacture and production made wholly or in part from imported duty-paid materials, under section thirty of an act entitled "An act to provide revenue for the Government and to encourage the industries of the United States," approved July twenty-fourth, eighteen hundred and ninety seven. Mr. CLARK. Are you asking for a drawback on American alcohol? Mr. BURCH. Of the internal-revenue tax. Mr. CLARK. That is your proposition? Mr. BURCH. That is our proposition. It absolutely in no way affects the revenue, because the stock you give us would be immediately replaced by new stuff taking the place of that which was exported. So that it can not affect the revenues in any way whatever, but simply encourages and helps and assists us to get our product into a foreign country, which we are absolutely unable to do to-day. Mr. CLARK. Your theory is that it would let out much more of the alcohol that is made in America? Mr. BURCH. Yes, sir; undoubtedly. Parke, Davis & Co., the largest pharmaceutical company in Detroit, have expended in Walkerville an investment of half a million dollars to manufacture, and they do manufacture there, all of their tinctures and drugs in which alcohol is used. They are manufactured in Walkerville for their export trade, and made from German and Canadian alcohol, and they went to the trouble, as I say, to invest a half million dollars in Walkerville to do it. Mr. CLARK. Is Walkerville in the United States? Mr. BURCH. No; it is across the river, in Canada. There is another gentleman here, or he was to be here this morning, representing the National Perfumers' Association. Mr. CLARK. Your proposition is as simple as falling off a log. Everybody can understand it. If we conclude we want to do it, we will do it. If we do not want to do it, we will not do it, and there can not be any information had on the subject. Mr. BURCH. Well, I thank you. HON. WILLIAM WARNER, SENATOR, FILES LETTER FROM OFFICIALS OF AMALGAMATED ASSOCIATION OF IRON, STEEL, AND TIN WORKERS RELATIVE TO TIN PLATE DRAWBACK. Hon. Wм. WARNER, Washington, D. C. ST. LOUIS, Mo., December 21, 1908. DEAR SIR: Being in possession of information that the Ways and Means Committee are going to introduce a tariff bill in this session of Congress, and being interested in the metal schedule directly, we desire to call your attention to the unjust provision of the drawback provision of the Dingley tariff law as it affects the importations of tin plate. Representatives of our association appeared before the committee on November 27, 1908, urging not alone the abrogation of the drawback agreement, but the maintenance of the present duty on tin plate. United States statistics show that during the six years ending in 1907 the amount of $10,911,635 has been refunded to foreign manufacturers on reexported plates, which admits this product into the United States for one one-hundredth of 1 cents. To enable the American manufacturers to compete with imported plate, American workingmen have taken a reduction of 25 per cent in their wages when working reexport plate. However, in view of this concession, importations are increasing, which is resultant in the American mills being closed in many instances, while the mills in Wales, where this product is worked, are running at their full capacity. By referring to the hearing of the Ways and Means Committee on November 27, 1908, and to a brief submitted on December 2, 1908, by the officials of our association, you will obtain added information bearing on this subject, which we deem of vital importance, not alone to employees in American tin-plate mills, but to the industry in general. Trusting you can see your way clear to give this matter your earnest support and cooperation, we are, on behalf of Future City Lodge No. 1, State of Missouri, Amalgamated Association of Iron, Steel, and Tin Workers of North America, located at St. Louis, Mo., Respectfully, yours, JOHN RYAN, President. E. W. PAINTER, Recording Secretary. THE NATIONAL WHOLESALE DRUGGISTS' ASSOCIATION SUGGESTS AN AMENDMENT TO THE DRAWBACK LAW PROVIDING FOR REFUND OF INTERNAL-REVENUE TAX ON ALCOHOL. PHILADELPHIA, December 21, 1908. Hon. SERENO E. PAYNE, Washington, D. C. DEAR SIR: On behalf of the National Wholesale Druggists' Association I would respectfully ask that the customs drawback law be amended so as to provide for a refund of the internal-revenue 61318-MISC-096 tax paid on domestic alcohol used in the manufacture of exported articles. The enactment of the following proposed bill would directly benefit all American manufacturers having an export trade in articles such as drugs, flavoring extracts, chemicals, perfumery, etc., in the production of which alcohol is a necessary material: A BILL To encourage the export trade in drugs, chemicals, and other articles of domestic manufacture. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That on the exportation of articles manufactured or produced in the United States in part from domestic alcohol on which an internal-revenue tax has been paid there shall be allowed a drawback equal in amount to the tax paid on the alcohol so used: Provided, That no other than domestic tax-paid alcohol shall have been used in the manufacture or production of such articles. Such drawback shall be determined and paid in manner provided for determination and payment of drawback on exportation of articles of domestic manufacture and production made wholly or in part from imported duty-paid materials, under section thirty of an act entitled "An act to provide revenue for the Government and to encourage the industries of the United States," approved July twenty-fourth, eighteen hundred and ninety-seven. As you are doubtless aware, under the general terms of the customs drawback law a drawback is now paid on foreign alcohol forming a component part of exported articles. This proposed bill, if enacted, would simply permit of the use of domestic alcohol instead of the foreign product in manufacturing for the export trade. It would seem a self-evident proposition that if no difficulty has been experienced in identifying foreign alcohol on which the customs tax is $1.75 per proof gallon, so as to protect the Government, there could be no possibility of danger in providing for a similar system of rebates on domestic alcohol, on which the tax is $1.10 per proof gallon. As the Committee on Ways and Means will probably be guided by the Treasury Department in deciding whether they should recommend to Congress the enactment of this proposed legislation, it is most important, in my opinion, that the Treasury officials directly charged with the preparation of the regulations allowing a drawback of the duties paid on foreign alcohol should be consulted. I respectfully submit this suggestion, because the investigation which I have made has convinced me that the apparent disinclination of the internal-revenue officials to favor such legislation is wholly due to their unfamiliarity with the present regulations under which the customs drawback law is administered. One consideration which should aid the Committee on Ways and Means to reach a favorable decision on this question is that the laws of England, Germany, and France, granting untaxed denatured alcohol, also provide for the payment of a drawback on domestic tax-paid alcohol entering into the manufacture of exported articles. In conclusion, I would respectfully ask that you refer this letter to the Secretary of the Treasury, with the suggestion that the internalrevenue department and customs division jointly confer respecting the problems in administration which such legislation would necessarily entail. Yours, respectfully, EXHIBIT A. CHAS. H. RITTER, DETROIT, MICH., December 12, 1908. DEAR SIR: I wish to add our indorsement of the "Amendment to the tariff bill, to encourage the sale and exportation of articles of domestic manufacture." With this amendment to the law the revenue can not be lessened, because this merchandise can not be exported if the alcohol must. bear the internal-revenue tax and also bear the added internalrevenue tax of the country to which it is exported. On that account it can not be exported; therefore nó revenue can be lost. If we had the drawback, so that the revenue tax would have to be paid but once and within the exporting country, there would be a very large increase in exports of such merchandise which would indirectly add not only to the revenue of the Government, but add to the increased prosperity of the country through the increased business done. Yours, respectfully, FREDERICK F. INGRAM & Co., Perfumers and Manufacturing Pharmacists. SHARP & DOHME, BALTIMORE, MD., RECOMMEND THE ENGLISH METHOD OF ESTIMATING DRAWBACK DUES. COMMITTEE ON WAYS AND MEANS, BALTIMORE, December 22, 1908. Washington, D. C. GENTLEMEN: We are among the largest manufacturers in this country of standard pharmaceutical preparations, by which we mean such products as enter into and make up physicians' prescriptions when compounded in the drug store, our customers being the retail druggists. We find that it is difficult or impossible to compete in foreign countries, notably Europe, Central and South America, because of our high tax on alcohol and the lack of necessary provisions to enable us to have this internal tax repaid on exporting goods containing alcohol from this country. We can, to be sure, import alcohol, pay the duty and have this refunded on reexporting, but it seems to us that some provision should be made in the next ways and means bill for enabling users of alcohol in medicine to use domestic tax-paid alcohol and have the tax refunded in full when these goods are exported, such exportation to be strictly in the hands of the Treasury Department. This is how this is done in England and Germany, with the result that these countries largely have this business all over the world. You will probably say that if we make a bonded warehouse of our factory the desired thing could be accomplished, but this is not practicable for the reason that, due to the enormous variety of our products, representing about 2,000 or 3,000 kinds of medicines, we can not advantageously or profitably make those for export as a different batch from those intended for domestic use, largely because, in many cases, there is not sufficient of them to enable us to do so at all to advantage. It is different where the manufacturer makes only a few products, but where the |