Co., Inc., Lexington, Ky.; American Watch Association, Inc.; and R. F. Downing & Co., Inc. All of these will be included in the record. (The documents above-refered to are as follows:) Hon. Senator WALTER F. GEORGE, SANDOZ CHEMICAL WORKS, INC., Chairman, Finance Committee, United States Senate, Washington, D. C. DEAR SIR: We have the honor of approaching you as importers of coal-tar dyes and other coal-tar products from Switzerland during the last 30 years. The purpose of this letter is to invite your attention to section 17 (a) of H. R. 5505 which would eliminate the right to amend entries of coal-tar products hitherto granted by the Tariff Act for sound reason. Trusting that the representative of this company will be accorded an opportunity to appear before the United States Senate Finance Committee in the event the committee should hold hearings on H. R. 5505, we take pleasure in summing up our viewpoint, as follows: Importers of such coal-tar products, if comparable with domestic coal-tar products, are dutiable on the basis of the selling price of the latter products in this country. If they are not comparable, they are dutiable on the basis of United States value, which is defined in the tariff. Before comparable dye tests are made, it is impossible at the time of entry to determine whether or not coal-tar dyes and other coal-tar products are dutiable on the basis of the American selling price or United States value. Therefore, it is necessary to make tests of the imported coal-tar dyes after arrival in this country before determining whether they are competitive or noncompetitive. At the present time under section 487 of the Tariff Act of 1930, the importers of coal-tar dyes and other coal-tar products are permitted to amend their entries at any time prior to the time it has come under the observation of the appraiser for the purpose of appraisement. We hold that this right should be preserved in fairness to the importers, in the interest of simple procedure and in order to eliminate unnecessary litigation. Believe us, dear sir, we are, Re proposed import tax on copra. Hon. WALTER F. GEORGE, SANDOZ CHEMICAL WORKS, INC., CALIFORNIA STEVEDORE & BALLAST Co., Senate Office Building, Washington, D. C. DEAR SENATOR: We take the liberty of approaching you regarding a matter of vital importance to our stevedoring industry, a large volume of which consists of copra discharging, which involved a yearly labor payroll in 1951 in excess of $491,854 and machinery owned by our company alone valued at nearly one-half million dollars. Since 1934 coconut oil, which is derived from the crushing of copra, has been subject to an excise tax of 3 cents per pound. While this tax is burdensome to the vegetable oils and fats industry, it has not directly affected the importers and crushers of copra, since it is levied only upon the first domestic processing of the product, or in other words, the first refining of the coconut oil after it has left the hands of the importers and crushers as a crude-oil product. If the proposed legislation goes into effect, it will mean that the importer of copra will have to pay the 3 cents per pound processing tax on the oil content of the copra, which is equivalent to about $42 per long ton on the copra itself. Enclosed herewith is a memorandum describing the background of the proposed new tax measure together with the general arguments made by the National Institute of Oilseed Products for its defeat. A further significant fact not brought out by the memorandum is that prior to World War II about 90 percent of the Philippine copra production was shipped to the United States. At the present time only about 40 percent of this copra is coming to our country, largely owing to the fact that because of the oil processing excise tax the other nations in the world are able to purchase copra at a more favorable price and are thereby securing a larger and larger portion of the supply, to the disadvantage of our copra-crushing industry. This is a trend which is most alarming to observe and which, if it continues, will eventually force our industry into serious difficulties.. We, the California Stevedore & Ballast Co. and the Metropolitan Stevedore Co., our wholly owned subsidiary at the port of Los Angeles, therefore respectfully bespeak your kind assistance in eliminating section 22 of H. R. 5505 when this comes before the Senate Finance Committee in 1952. Yours sincerely, CALIFORNIA STEVEDORE & BALLAST Co., By J. G. LUDLOW, Vice President and General Manager. METROPOLITAN STEVEDORE Co., By J. G. LUDLOW, President. MEMORANDUM A 3 cents per pound excise tax was imposed in 1934 upon the first domestic processing of coconut oil. This tax was never a revenue measure but was rather in the nature of a protective tariff. At that time coconut oil was widely used in the manufacture of margarine, and the basic reason for the imposition of the tax on coconut oil was to protect the dairy industry. The tax, of course, imposed an important burden upon the copra industry of the Philippine Islands and, to mitigate in some degree the effect of this burden, prior to 1946 the amounts collected by the Treasury as a result of this tax were returned to the Philippine Islands. This further demonstrates the fact that the tax was never designed as a revenue measure for the support of the Government of the United States although since 1946, and Philippine independence, the tax is no longer remitted to the Philippines but is taken into the general fund of the Treasury of the United States, a consequence never intended when the tax was imposed. The tax has been burdensome, not only to the Philippine copra producers but to the United States producers and users of coconut oil, constituting as it does, an additional burden of cost which coconut oil must bear over other competing materials. In consequence, the copra and coconut oil industry in the United States has always been eager to see the tax removed, but no proper opportunity for its removal presented itself until recently. In the last Congress however, a bill was introduced for the simplification of customs procedure, know as the Customs Simplification Act. It was originally known as H. R. 8304, then as H. R. 1535. The bill contained many very desirable features, but contained one section, section 23, which is very damaging to the coconut oil producing industry. That section converts the 3 cents per pound processing tax into an import tax payable upon the importation of copra, the raw material of coconut oil, as well as upon coconut oil. Its effect would be to retain the general burden of the processing tax but to shift it from the processor of coconut oil to the producer of coconut oil and the importer of copra. The National Institute of Oilseed Products, numbering among its members many copra importers and coconut oil producers, felt that this shift of the burden was unjust to the industry and should be opposed. It also felt that the change in the law contemplated by section 23 opened the door to reconsideration of the processing tax as a whole. The NIOP therefore approached the House Ways and Means Committee with two proposals: 1. That in connection with the Customs Simplification Act, the processing tax be repealed altogether. 2. That if repeal should be rejected, section 23 of the H. R. 1535 should be eliminated altogether, leaving the processing tax in its present form and avoiding the conversion of the tax into an import tax. The NIOP was unsuccessful before the House Ways and Means Committee. The committee took the position that a consideration of an outright appeal of the tax was not germane to the Customs Simplification Act and therefore rejected a motion that the bill be amended to accomplish such repeal. The committee also rejected the proposal of the NIOP that section 23 of the act be eliminated in its entirety, apparently failing to appreciate the serious effect upon the coconut oil producing industry of the shift of the burden. However, various members of the committee expressed themselves as beng sympathetic toward the repeal of the tax in its entirety in a bill separately introduced for that purpose. The Ways and Means Committee therefore left section 23 unchanged, made certain other amendments in the measure and sent it to the floor of the House as H. R. 5505 in which, due to certain unimportant revisions, section 23 of H. R. 1535 has become section 22 of H. R. 5505. In this form it passed the House and has been sent to the Senate, where hearings upon it will be held early next year by the Senate Finance Committee. It is useless to renew before the Senate Finance Committee the request for repeal of the processing tax as a whole, as a measure so affecting the revenue would have to originate in the House. However, it is definitely desirable to continue in the Senate the effort to prevent the conversion of the processing tax into an import tax, i. e., to renew in the Senate the proposal that section 22 of the present H. R. 5505 be eliminated in its entirety. The NIOP, through its legislative committee, is now making plans for the presentation of this contention to the Senate Finance Committee. In brief, this should be of marked interest to all soap makers and users of coconut oil as it means they will have to pay the 3 cents per pound additional at the time the oil is shipped from the Pacific coast instead of 30 days after the end of the month in which it is processed. It will also obviously affect everybody connected with the coconut oil crushing industry such as steamship lines, insurance companies and labor, both in the stevedoring and the actual plants themselves. The members of the Senate Finance Committee who will pass on this matter are Senators George (Georgia), Connally (Texas), Byrd (Virginia), Johnson (Colorado), Hoey (North Carolina), Kerr (Oklahoma), Frear (Delaware), Taft (Ohio), Butler (Nebraska), Brewster (Maine), Martin (Pennsylvania), and Williams (Delaware). TACOMA VEGETABLE OILS, INC., Senator HARRY P. CAIN, United States Senate, Washington, D. C. DEAR SENATOR CAIN: At the present session of the Senate we have been advised that the Senate Finance Committee will consider H. R. 5505 dealing with changes in the processing tax on coconut oil. Under section 22 of this bill it is planned to eliminate the processing tax on coconut oil and substitute an import tax that will yield the same revenue. The National Institute of Oilseed Products, of which we are a member, has been carrying on in an endeavor to have the coconut oil processing tax eliminated entirely. From the enclosed information you will note that this tax was started to give aid to the Philippine Islands while they were under our control. This tax imposes an unjust burden on the islands and is seriously injuring their economy. The President of the Philippine Islands has the matter up for the elimination of the tax, as well as the soap industry in this country, labor interests on the Pacific coast including the stevedoring arm, as well as many other branches of allied users of either the coconut oil or the copra meal. At this time we are trying to arrange enough support to have section 22 of the present H. R. 5505 eliminated in its entirety. If it goes through, it will mean that every copra processor will be faced with the added cost of paying the import tax when the copra is received, rather than having the first processor of the oil pay the tax. Since starting up in Tacoma, we have contributed considerable tonnage to American-flag vessels hauling our copra from the islands, the first year around 36,000 tons and for the first half of our present fiscal year, close to 20,000 tons. Rather than continue burdens on this strategic and critical material, we feel that efforts should be made to stimulate the use not only for the benefit of the United States, but also for the improvement of the Philippine Islands. Copra is their principal source of export revenue. The handling of the cargo is vital to our American merchant marine for home-bound cargo. Freight revenue on the oil to the consuming markets in the midwest and East is quite important to the Pacific coast railroads. Any assistance you can give us with the Senate Finance Committee toward the elimination of section 22 of the present H. R. 5505 will be greatly appreciated. Yours very truly, TACOMA VEGETABLE OILS, INC., Vice President. RESOLUTION OF THE PACIFIC COAST RENDERERS ASSOCIATION, EMERYVILLE, CALIF., SEPTEMBER 6, 1951 Whereas the Pacific Coast Renderers Association has opposed the imposition of a processing tax on coconut oil consumed in the United States, since its inception; and Whereas it has been the firm conviction of the members of this association that such a tax was designed primarily to reduce and hinder the competition of margarine manufactured from imported coconut oil, and to aid the Philippine Islands, then under our jurisdiction; and Whereas coconut oil has since been displaced in a manufacture of shortening and margarine by domestic cottonseed and soyabean oils, and now is confined to specialty uses in the edible field; and Whereas a very substantial portion of the coconut oil consumed in the United States is utilized in the industrial field, primarily in the manufacture of soap; and Whereas the lauric acid content of coconut oil is vital to the manufacture of a free-lathering, soluble soap of good quality in combination with animal fats; and Whereas animal fats lack the virtues of coconut oil and produce an unsatisfactory quality of soap without a sufficient admixture of coconut oil; and Whereas a mixture of animal fats and coconut oil is essential and imperative to produce a marketable soap; and Whereas soap consumption in 1949 and 1950 was smaller than in any other years since 1921, according to the Bureau of Agricultural Economics, United States Department of Agriculture; and Whereas a new washing compound, known as detergents and produced from byproducts of petroleum, has invaded the field of washing compounds in competition with oil- and fat-based soaps and has captured 31 percent of national sales of nonliquid soaps and detergent sales, and 50 percent of package (nonbar) soap and detergent sales in 1950, and which has been increasing at a rapid rate since 1945; and Whereas such detergents have the virtues of free lathering and quick solubility, even in hard-water areas, which embrace a large portion of the United States; and Whereas the basic cost of petroleum is low compared to the cost of producing, collecting, and processing of animal fats into tallow ready for the soap kettle; and Whereas the processing tax of 3 cents per pound on coconut oil retards the use of sufficient quantities, or a suitable percentage in ratio to animal fats, by increasing the cost of soap above competitive levels and has the effect of a subsidy to detergents: Therefore be it Resolved, That this association reaffirms its opposition to the processing tax on coconut oil, and petitions the Congress of the United States of America to repeal such tax on the grounds that the original purposes of the tax no longer exist, and its continuance is unfair to the soap industry and the producers of animal fats, 90 percent of which are utilized in the manufacture of soap, and who are now facing a constriction of consumption due to competition from petroleum-based detergents. The secretary of this association is instructed to forward copies of this resolution to the National Renderers Association, to the national directors and regional associations, to soap manufacturers on the Pacific coast, and all other interested parties. PACIFIC COAST RENDERERS ASSOCIATION, NELS HAMBERG, Secretary. JOSEPH FIRPO, LLOYD HYGELUND, WILLIAM A. KOEWLER, THOMAS N. CONWAY, Directors. MEMORANDUM A 3-cent-per-pound excise tax was imposed in 1934 upon the first domestic processing of coconut oil. This tax was never a revenue measure but was rather in the nature of a protective tariff. At that time coconut oil was widely used in the manufacture of margarine, and the basic reason for the imposition of the tax on coconut oil was to protect the dairy industry. The tax, of course, imposed an important burden upon the copra industry of the Philippine Islands, and, to mitigate in some degree the effect of this burden,, prior to 1946 the amounts collected by the Treasury as a result of this tax were: returned to the Philippine Islands. This further demonstrates the fact that the tax was never designed as a revenue measure for the support of the Gov-ernment of the United States although since 1946, and Philippine independence,. the tax is no longer remitted to the Philippines but is taken into the general. fund of the Treasury of the United States, a consequence never intended when the tax was imposed. The tax has been burdensome, not only to the Philippine copra producers but to the United States producers and users of coconut oil, constituting, as it does,, an additional burden of cost which coconut oil must bear over other competing materials. In consequence, the copra and coconut-oil industry in the United States has always been eager to see the tax removed, but no proper opportunity for its removal presented itself until recently. In the last Congress, however, a bill was introduced for the simplification of customs procedure, known as the Customs Simplification Act. It was originally known as H. R. 8304, then as H. R. 1535. The bill contained many very desirable features, but contained one section, section 23, which is very damaging to the coconut-oil-producing industry. This section converts the 3-cents-per-pound. processing tax into an import tax payable upon the importation of copra, the raw material of coconut oil, as well as upon coconut oil. Its effect would be to retain the general burden of the processing tax but to shift it from the processor of coconut oil to the producer of coconut oil and the importer of copra. The National Institute of Oilseed Products, numbering among its members many copra importers and coconut-oil producers, felt that this shift of the burden was unjust to the industry and should be opposed. It also felt that the change in the law contemplated by section 23 opened the door to reconsideration of the processing. tax as a whole. The NIOP therefore approached the House Ways and Means Committee with: two proposals: 1. That in connection with the Customs Simplification Act the processing tax be repealed altogether. 2. That if repeal should be rejected, section 23 of H. R. 1535 should be eliminated altogether, leaving the processing tax in its present form and avoiding the conversion of the tax into an import tax. The NIOP was unsuccessful before the House Ways and Means Committee. The committee took the position that a consideration of an outright repeal of the tax was not germane to the Customs Simplification Act and therefore rejected a motion that the bill be amended to accomplish such repeal. The committee also rejected the proposal of the NIOP that section 23 of the act be eliminated in its entirety, apparently failing to appreciate the serious effect upon the coconut-oilproducing industry of the shift of the burden. However, various members of the committee expressed themselves as being sympathetic toward the repeal of the tax in its entirety in a bill separately introduced for that purpose. The Ways and Means Committee therefore left section 23 unchanged, made certain other amendments in the measure, and sent it to the floor of the House as H. R. 5505 in which, due to certain unimportant revisions, section 23 of H. R. 1535 has become section 22 of H. R. 5505. In this form it passed the House and has been sent to the Senate, where hearings upon it will be held early next year by the Senate Finance Committee. It is useless to renew before the Senate Finance Committee the request for repeal of the processing tax as a whole, as a measure so affecting the revenue would have to originate in the House. However, it is definitely desirable to continue in the Senate the effort to prevent the conversion of the processing tax into an import tax; i. e., to renew in the Senate the proposal that section 22 of the present H. R. 5505 be eliminated in its entirety. The N. I. O. P., through its legislative committee, is now making plans for the presentation of this contention to the Senate Finance Committee. STATEMENT OF C. JASPER BELL, AUGUST 17, 1951, URGING AMENDMENT OF SECTION 23 OF H. R. 1535 Mr. Chairman and gentlemen of the committee, I appear upon behalf of the National Institute of Oilseeds Products, which is composed principally of copra |