Should a Protective Tariff Be Enacted for the 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
1917Article in The Journal of Commerce, Special Annual Edition, February 5, 1917.

I. F. Stone

The answer to this question is very simple, viz., "Yes," for on looking over the experience of the dyestuff manufacturers of aniline colors was first established in the United States it will be found that about 1880 there was some ten factories enaged in the manufacture of these products, and it looked as though it would be a very successful industry, as tariff conditions at that time were favorable to such enterprises. Unfortunately, however, in 1883 a new tariff law was passed, reducing the tariff protection on colors to such an extent that the industry was no longer possible and consequently most of these factories dropped out until at one time there were only three engaged in this manufacture. These were carried on more or less by the ambition of their owners that some day conditions would be changed rather than at a profit. One of these factories particularly lost a large amount of money up until the time it finally reached some success, about 1900. About 1898 another factory was established, and then about 1914 still another was established, so that in 1914, at the beginning of the present European War there were five factories engaged in this industry, but none of them on a large scale and none of them were successful enough to make a complete line of colors and were restricted to only a few of these which might be made to advantage in this country, therefore the industry was not a large one up to the beginning of the present European War, viz., about August 1, 1914.

The reason for this condition was that since 1883 no favorable Tariff Bill was passed to encourage this industry, consequently no particular progress was made. Upon the beginning of the European War however, when it was impossible to import colors and dyestuffs from Germany, a great shortage in the dyestuff supply was the consequence and it then became evident that the dyestuff industry in this country were in existence in the beginning 01 the war could never occur again and American consumers could rely on American manufacturers for their supply.

As about 80 per cent of the aniline colors and other coal tar dyes were exported into this country by Germany when Germany was prevented from this exportation by the war, a great development in the industry in this country began, until at the present time there are some one hundred and twenty factories engaged in the manufacture of various products which are necessary for American consumption and the supply for 1917 is therefore ample for all necessary colors.

This development was entirely due to the European War and not to a protective tariff, so that the point is now that if this industry is to be continued in this country on a large scale a sufficient protective tariff must be given it or the bulk of the business will again return to Germany after the present war is over. To meet this emergency a bill was recently passed (H. R. 16763), increasing the duty on aniline colors from 30 per cent ad valorem to the same duty ad valorem, plus 5c per pound specific duty, and on what we call intermediate products to 15 per cent ad valorem, plus 2^c per pound specific duty. On such coal tar products such as indigo, alizarine and anthracine derivatives, known as vat colors, where no protection was formerly given, an ad valorem duty of 30 per cent was given, so that the industry as it now stands, has this additional protection, for the time being. The disadvantage is that this 5c per pound specific duty is only for a period of a few years, that is, is reduced automatically each year Ic per pound for five years, so that at the end of five years the original duty goes into effect again.

A committee appointed October 9th, 1914, by the American Chemical Society (New York Section) to investigate the subject in the fall of 1914, made a very careful report on November 6, 1914, recommending that in addition to the 30 per cent ad valorem duty then in effect, a specific duty of 7½c per pound should be given on aniline colors, and in addition to the 15 per cent ad valorem duty on intermediates, a specific duty of 3¾c should be given, but Congress in passing the present bill seemed to disregard the opinion of these experts and only gave the above mentioned 5c per pound on aniline colors and 2½c on intermediate, atlhough they did also add the 30 per cent ad valorem duty to the other products, viz., indigo, alizarine and anthracine derivatives, which were formerly on the free list.

Whether the bill recently passed will then give enough protection to insure the continuance of the present rate development in the coal tar industry is a serious question, and in my opinion the matter is so important to American consumers of these products that the matter should be gone into very carefully again by the Government, and if it is found that the present protection is not sufficient then a new bill should be passed which would protect this industry to its full extent, as after the war it is evident the European manufacturers will make every effort to regain the business they have lost during the war and even with the present tariff against them will probably be able to make prices which will make it impossible for the American manufacturers to compete, as the American manufacturers are at a disadvantage on account of the extremely high prices of labor and raw materials in this country, and to some extent to their lack of fifty years' experience which the European manufacturers have had; then again the great German factories are now in one great convention or combination and will accordingly fight as a unit to regain the American business, and this great unit is obviously able to do what individual manufacturers could not afford to do, in that their combined production and consequent lessening of selling expenses might easily overcome the present tariff.

In conclusion, I will repeat that it is imperative that the Government of the United States should give this matter immediate and careful attention and in the end, give this industry a protection which will insure its development and stability in the years to come.