Permanence of the American Dyestuff Industry

The Aniline Color, Dyestuff and Chemical Conditions
from
August 1st, 1914,
to
April 1st, 1917.
A series of Addresses and Articles
Compiled by:
I. F. Stone
1917Written for the Textile Club Presented at a Meeting at the Hotel Martinique, March 3rd, 1917.

I. F. Stone

In considering this question there must first.be taken into consideration the conditions before the present European War when the dyestuff industry in this country was not at all successful and European manufacturers, especially the Germans, had a practical monopoly on the business. The five American factories then in existence were struggling along under very adverse conditions, but even at that they managed to produce from fifteen to twenty per cent of the normal consumption in this country, although they did so at a very small profit on the capital employed and hard effort on the part of the gentlemen engaged in this manufacture.

The adverse conditions under which these American factories worked were, briefly: First, the fact that their raw materials, known as intermediates, were not then produced in this country, but were manufactured in Europe, and they therefore had to depend upon Europe for their supplies; second, the tariff protection extended to them by the United States Government was not sufficient and they could not compete, therefore, with European manufacturers owing to the higher costs of manufacture in this country due to labor conditions and perhaps, also, to the lack of thoroughly experienced chemists; and, third, the policy of the European manufacturers, particularly the Germans, to make such prices on the colors which were being manufactured here so that the American manufacturers could not sell at a profit.

Immediately after the beginning of the present war, however, conditions changed in that it was no longer possible for the German manufacturers to export their colors to this country, neither was it possible for American manufacturers to obtain from Europe their intermediates (raw materials) which they needed to manufacture colors; therefore, it became necessary, in order to manufacture in this country the necessary quantities of finished colors, to provide for the manufacture of these intermediates, and during the war the manufacture of such intermediates has been so well established that there is now a liberal supply of these materials and the American manufacturers of colors are therefore able to manufacture practically all of the necessary colors consumed in this country. When I say all, I do not mean every color which was manufactured in Europe and which was formerly consumed in this country, as there are many specialties which had not yet been made here, but these specialties are not actually necessary in that the colors now produced here are those of which there is the largest consumption, like blacks, blues, browns, reds, greens, violets, orange, yellows and other suitable colors used for woolens, cottons, silks, leather and all other materials on which colors are needed.

It being a fact that the American manufacturers are now able to produce all of the necessary colors needed, the question then is whether this will be a permanent industry or whether the conditions which prevailed before the present war will again be the same, in that the European manufacturers may be able to flood the country with their colors at prices with which the American manufacturere cannot compete. It gives me much pleasure to be able to answer this question very definitely in the affirmative, viz., the dyestuff industry of this country is now on a permanent basis for the following reasons:

First -  The production of coal tar derivatives, like benzol and naphthaline, has been increased to such an extent that the quantities produced are now from five to ten times more than before the war, and the manufacturers of intermediates, depending on these products, will continue to be able to get a fully supply at prices which will compare favorably to European prices on account of the largely increased production, it being well known that the United States has practically inexhaustible supplies of coal, which is the base product and from which will be derived the benzol and naphthaline and other products necessary for the manufacture of the intermediates and from them the manufacture of the finished colors.

Second - The United States Government has finally discovered that in order to make this industry permanent it is necessary to give more adequate tariff protection, therefore a tariff bill, known as H. R. 16763, was passed in 1916, giving a protection of 30 per cent ad valorem and 5 cents per pound specific duty on finished colors, and 15 per cent ad valorem and 2J^ cents per pound specific duty on intermediates, the addition to the old tariff being the 5 cents and 2^ cents per pound specific duties just mentioned, and this additional protection gives the American manufacturers a very much better opportunity to operate, although, even at that, a higher protection would be still more important if it could be obtained. The exception to the above protection is that on indigo and what is known as indigoids and alizarine colors, no specific duty was imposed although they were given the 30 per cent ad valorem duty as against the fact that they were free before this bill was passed. There is no specific reason why these colors should not also have this specific duty, and why they were excepted in the passing of this bill is a question for those who passed it to answer, and I believe that upon mature condition this exception will be cancelled and all of the colors now manufactured in this country will have the same protection, which they certainly should have.

Third - The manufacturers of intermediates and colors have, during the war, been able to obtain, owing to abnormal conditions, an abnormal rate of profit, and out of this abnormal profit they have been able to build and pay for their factories as well as accumulate a surplus profit which they can use for the further increase of their present production and the working out of the special colors not now manufactured here.

Fourth - The American consumers have realized, due to the conditions prevailing since the war, the importance of having an aniline industry in this country which will in the future prevent any repetition of the conditions which prevailed just after the war, when it was for some time impossible to secure enough colors for the consumption of the country, as a consequence of which many consumers were obliged either to run their mills or factories only a part of the time, or, as in some cases, close down entirely. With this realization, therefore, they will undoubtedly give the preference to American-made products, which in itself would help in the competition against European manufacturers after the war.

To sum up briefly the whole question of the permanency of the American dyestuff industry, it is apparent from the above that with factories capable of producing the colors necessary for consumption, an adequate tariff protection by the Government, a strong financial condition established during the war, and the preference of American consumers for American products, we have certainly insured the permanence of the American dyestuff industry.