Atlantic Dyestuff Co. Lobbies Congress for Tariff Protection
ColorantsHistory.Org
After World War I, the American dyestuff industry sought tariff protection to limit the import of German dyestuffs and foster the
growth of the domestic industry.  In 1921 Charles H. Stone, vice president of Atlantic Dyestuff Co., gave extensive testimony to a
Congressional committee regarding the need for higher tariffs.  He also provided details about dyestuff production at his company
and refuted the allegation that the American dyestuff industry was a monopoly.  

Congress passed the legislation to raise import barriers and American dyestuff companies enjoyed little competition from foreign
producers until the mid-1960s when tariffs were sharply reduced.  The new global competition was the first step in the ultimate
demise of the American dyestuff manufacturers.  

Mr. Stone's testimony is reproduced below.  The source is "Hearings Before the Committee on Finance United States Senate On the
Proposed Tariff Act of 1921 (H. R. 7456) Dyes Embargo, Government Printing Office, Washington, DC, 1922, pp. 435-451.

STATEMENT OF CHARLES H. STONE, VICE PRESIDENT ATLANTIC DYESTUFF CO., BROOKLINE, MASS.

Mr. Stone, will you state your full name for the record?

Mr. STONE. My name is Charles H. Stone.

The CHAIRMAN. Where do you reside?

Mr. STONE. In Brookline, Mass.

The CHAIRMAN. What is your business?

Mr. STONE. I am vice president of the Atlantic Dyestuff Co., whose home office is in Boston.

The CHAIRMAN. Where are their works located?

Mr. STONE. One is located at Burrage, a village 26 miles south of Boston, and the other at Portsmouth, up in Senator Moses's State,
New Hampshire.

Senator SIMMONS. Mr. Chairman, I want to say that in asking that Mr. Stone be heard, I do not know whether he is going to say
something for or against the views I may have. I do not know anything about that. He just made the request of me.  

Mr. STONE. In view of Senator Simmons's remarks, I ought to thank him for giving me the opportunity of appearing here and to
assure him that I am not going to embarrass him on account of his views, even though we did come from North Carolina.

The CHAIRMAN. The committee will be in order and the witnesses will cease conversation. If witnesses desire to consult or confer
they will retire to a very large room adjoining, which will hold all of them.

Mr. STONE. Mr. Chairman, I come as the representative of one of the small manufacturers.

Senator WATSON. Manufacturers of dyestuffs?

Mr. STONE. Of coal-tar dyestuffs. We feel that we require unusual protection at your hands if we are to stay in business, and we feel
that we must show you why you are justified in giving us this unusual protection. I want to give you a few facts, most of which I have
taken from Government records. In behalf of, first, our industry, the American coal tar chemical dyestuff industry, and, second, in
behalf of our belief that it is only through such protection as Senator Watson's bill that he prepared last fall would give us.

If I may review a few questions that seem to be in the minds of some of you gentlemen: At the outbreak of the World War there were
a few—four or five or six or seven—coal-tar dyestuff manufacturers in America. These makers were producing about 5 per cent of
the total amount of coal-tar dyes that were required. The other 95 per cent were imported mostly from Germany.  Today—seven
years later, almost exactly after the outbreak of the war—we have, according to the Tariff Commission's report, prepared by the
Government, of which you gentlemen are an important part, 82 independent coal-tar dyestuff manufacturers.
What are the outstanding facts that we discover that have transpired during these seven years? Our imports of coal-tar dyes prior
to the war were from 40,000.000 to 50,000,000 pounds. We have no public record of what the American dyestuff industry did prior to
the year 1917. That year the Tariff Commission made us a report on what the industry had done, and we find that in 1917 we
produced as many pounds of dyes in this country as we had been importing annually just prior to the outbreak of the war.
Furthermore, we find that these 46,000,000 pounds of dyes were sold at an average price of $1.26 per pound.

In 1918 very considerable progress had been made. That year we made about 58,000,000 pounds of dyes—more than we had
imported in any previous year prior to the outbreak of the war. And these we sold at an average price of about $1.07 per pound, a
substantial reduction from 1917.

In 1919 we had made further progress. We made 65,000,000 pounds of dyes, and these were again sold at an average price of $1.07
per pound.

In 1920 we showed still greater progress. We made 88,000.000 pounds of dyes, perhaps one and two-fifths times as much as we
had imported prior to the war, and these were sold at an average price of about $1.08 per pound.

Let me say here, gentlemen, the…

Senator SIMMONS (interposing). Will you give the average price the American people paid for those before the war?

Mr. STONE. The nearest that we can get to that, Senator Simmons, is to take the possible volume of business of the German
importing houses against the possible number of pounds that were used. We would then get perhaps 60,000,000 pounds of colors
that were sold for anywhere from $30,000,000, $40,000,000, or $50,000,000.

Senator SIMMONS. I was trying to get the average at which these German dyes that you say were imported almost exclusively to this
country before the war—that you are talking about—were sold at. You give the average of the price at which you sold them. Now, if
you will give the average price the American people were paying before the war and buying from Germany it will answer my inquiry.

Mr. STONE. This is the best estimate that has been given, Senator Simmons, to my mind; prior to the war our per capita dye cost was
from 30 to 35 cents per person. That would seem to indicate that our dyes then were costing about one-half what they are to-day,
because when I use the records given by your Tariff Commission I find that the per capita dye cost for our American citizens to-day
is 60 or 70 cents, or substantially double what it was prior to the war.

Senator SIMMONS. I have understood one witness to testify—I do not know who he was—that the average price he paid before the
war was about 20 cents a pound.

Mr. STONE. Well, let his testimony stand as his testimony, not mine.

You gentlemen have noticed that the average price of the American-made dyes has not declined substantially for three years. You
want to know why this is. We refer to the Tariff Commission report for 1920 and we find that there is from 1917, 1918, and 1919 a
very substantial increase in the quantity of high-priced dyes.

Let me lay out some data here so that I can give you some specific instances.

Senator DILLINGHAM. You mean those dyes produced in this country?

Mr. STONE. Those dyes produced in this country, Senator; yes.

We will take the year 1918, for which the record is quite complete, and in the year 1919, and then the year 1920. These are the
reports of the Tariff Commission to the President. I will refer to colors that constitute large quantities of our requirements. We find
that in 1918 that direct yellow, which constitutes a large item of consumption in this country, was sold for an average price of $2.61
per pound.

Senator WATSON. What was that?

Mr. STONE. That was direct yellow.

Senator MOSES. You are not manufacturers of that?

Mr. STONE. Not of direct yellow.

Senator MOSES. What yellows do you make?

Mr. STONE.  We make sulphur yellow.

In 1919 we made as much direct yellow as we did in 1918, or a reduction from $2.61 to $1.74. In 1920, of this same color we had a
very considerable amount; the competition in this color had developed in the meantime—in 1917 and 1918—and there were about
six or seven manufacturers, but when we come down to 1920 we have eight. I see among them the larger manufacturers. That year
we made a substantial quantity which was sold at $1.49 per pound. The price of this color was nearly cut in two from 1918 to 1920;
and I may say, as a dye seller, that the price of the direct yellow referred to here is substantially below the price of $1.49, which is
the recorded price of 1920.

Shall I go on and relate other instances like this, Senator Pen- rose, to show the decline in price of dyes in this country?

The CHAIRMAN. You state anything that you think the committee ought to know from your angle, but remember that the committee is
going very slowly toward accomplishing anything.

Mr. STONE. I know your time is valuable. Then, let me go on with one or two other colors. Let us take metanile yellow. In 1918 we
have no recorded price, because there were not enough manufactured to justify the Tariff Commission in recording the price.

Senator LA FOLLETTE. What color is that?

Mr. STONE. M-e-t-a-n-i-1-e, which is an acid yellow, Senator.

In 1919 we have a price of 96 cents.

In 1920 we made a substantial quantity of that, and still the price remained, as there was an enormous demand for it for export—I
want to show both sides—substantially the same as it was in 1919. But now since the slump in business, the price of this color is
substantially below what it was in 1920.

Let us go to another, chrome black, which is used by Senator Smoot—who is not present now—in the woolen trade. In 1918 that
sold for $1.62; in 1919 it sold for $1.25, and in 1920 it sold for $1.10; and to-day that same color, of the same quality and the same  
strength, is selling for about 75 cents.

I could relate a number of other instances like this.

Senator SIMMONS. What did that sell for before the war?

Mr. STONE. I beg your pardon

Senator SIMMONS. What did that sell for before we began to produce?

Mr. STONE. Perhaps an average of 45 or 50 cents per pound.

Senator MOSES. How much was the production of this, Mr. Stone, before the slump in business to which you referred?

Mr. STONE. It would be purely a guess, Senator Moses, for me to endeavor to frame an answer to you. There is very sharp
competition among the 82 independent manufacturers of this country, and we can certainly ascribe some of it to the slump in
business. We can perhaps ascribe more of it to the fact that the German chemical cartel is producing enormous quantities of
dyestuffs, which she is distributing all over the world, except to those countries which have barred German dyestuffs.

Senator MOSES. Would that necessarily affect the price of this market? They are not accessible to this market?

Mr. STONE. No; they are not accessible to this market.

Senator LA FOLLETTE. Do we export that color?

Mr. STONE. I doubt if we do in any substantial quantity.

Senator LA FOLLETTE. Then, if we do not, you would not be affected by German exports to other countries. The price would not be
affected?

Mr. STONE. Unless those other countries were getting the business that our woolen manufacturers had been getting.

Senator MOSES. Just what do you mean by that, Mr. Stone? Do you mean that the German dyes were being sent to other countries,
and that textiles were being brought here in competition with American textiles, and that that might affect the price of dyes in
this country?

Mr. STONE. I mean, if we had been selling our products in Japan dyed with this color, that if our manufacturers had lost that market
to some other manufacturer, then we would be deprived of the sale of the black through our fabrics.

Senator MOSES. What do you say about bringing in fabrics from Europe dyed with colors which our textile people could not get?

Mr. STONE. I do not consider that an exceedingly serious question, because I believe that if there are some manufacturers of dyes
which are highly important or possess unusual properties, that those manufacturers outside of America would, perhaps, want to
use them in fabrics and export the fabrics. What I mean here is that if the American dyestuff industry is not properly protected, and
is submerged, that some day there is a possibility of those countries that control the dyestuffs keeping their dyestuffs in those
countries and using them in their textiles, thus destroying the American textile industry.

If I may go on, gentlemen.

Senator LA FOLLETTE (interposing). Had you finished with your citations from the reports of the Tariff Commission?

Mr. STONE. I shall not make any more citations unless you wish them, Senator La Follette, except one, which is Congo red, if I can
locate that color. Will some of you gentlemen tell me the number of it?

Congo red—we produced a substantial amount in 1918, which was sold for $2.01 per pound, average.

In 1919 we sold it for $1.12 per pound, substantially one-half the price of 1918.

In 1920 we sold it for 86 cents per pound, which is another substantial reduction, and to-day you can buy Congo red on the American
market at 50 cents per pound, or thereabouts.

Senator LA FOLLETTE. You have selected four different colors from the list published by the Tariff Commission. Do the reports from
which you have quoted give the general trend of the prices of all of the dyes manufactured in this country?

Mr. STONE. They do, Senator.

Senator LA FOLLETTE. Do they state in some summary an average for each year?

Mr. STONE. That is what I have just quoted prior to this. In 1918 our price was $1.07.

Senator LA FOLLETTE. You have quoted the average of the particular color that you selected from that list, but do they state the
average trend of prices on all of the colors?

Mr. STONE. My first quotations, if I may set you aright, Senator, were on our total production.

Senator LA FOLLETTE. I thought direct yellow was the first color.

Mr. STONE. That is a specific case.

Senator LA FOLLETTE. You selected four specific cases.

Senator MOSES. What was that color?

Mr. STONE. Congo red.

Senator MOSES. Is that used extensively in this country?

Mr. STONE. Not so much now, Senator Moses. We have replaced it with other better colors.

Senator MOSES. Where is Congo red chiefly used ?

Mr. STONE. It is exported as a rule. I believe.

Senator MOSES. To what country?

Mr. STONE. I think that I would have to name most of the textile countries of the world.

Senator MOSES. Is not that a very popular color in the Orient?

Mr. STONE. It is, I am told.

Senator MOSES. And used very much in the textile mills in India.

Mr. STONE. We can assume so.

I stated that the average price of dyes had not come down substantially, as reported by the Tariff Commission, for the years 1918,
1919, and 1920.

Senator LA FOLLETTE. Did you state the price for 1921 up to the present time, so far as you know it; the average? What is the trend
of prices on all of the colors ?.

Mr. STONE. I would have to guess that.

Senator LA FOLLETTE. You would not know that?

Mr. STONE. No; that is not public property yet.

Senator LA FOLLETTE. May I ask you to state again, if you please, what companies you represent?

Mr. STONE. One company.

Senator LA FOLLETTE. Just one company?

Mr. STONE. Yes, sir; the Atlantic Dyestuff Co.

Senator LA FOLLETTE. Is that a manufacturing concern that manufactures dyes exclusively, or is it a general chemical
manufacturing plant?

Mr. STONE. They manufacture coal-tar products exclusively.

Senator LA FOLLETTE. What is the capitalization?

Mr. STONE. $100,000, I believe, is the capital stock.

Senator LA FOLLETTE. Is it paid in in cash?

Mr. STONE. I think that it would be better to say in cash and the equivalent of cash.

Senator LA FOLLETTE. In cash and property?

Mr. STONE. Cash and property; yes, sir.

Senator LA FOLLETTE. When was it organized ?

Mr. STONE. In 1916, I believe.

Senator LA FOLLETTE. Are you an officer of that company?

Mr. STONE. Vice president.

Senator LA FOLLETTE. What salary does that company pay to its president ?

Mr. STONE. That I do not know, Senator.

Senator LA FOLLETTE. What salary does it pay you?

Mr. STONE. That I do not think you want me to answer, Senator.

Senator LA FOLLETTE. Yes; I do. I want you to answer it.

The CHAIRMAN. Mr. La Follette wants you to answer it, but you do not have to answer it if you do not want to.

Senator LA FOLLETTE. I am not certain about that, Mr. Chairman.

The CHAIRMAN. We can consider the question of drastic proceedings, if necessary; but in the meanwhile the witness declines to
answer.

Senator LA FOLLETTE. I think that if the testimony taken before this committee is to have any value at all, we ought to have all the
facts that bear upon the profits of the company.

Senator SIMMONS. I think that is a very pertinent question to this inquiry. We are trying to get at the cost of production in this
country, and that, I understand, is one of the fundamental principles underlying all tariff legislation.

Senator LA FOLLETTE. I think it is basic. I think we are wasting time here, Mr. Chairman, unless we go right to the bottom of this
whole business and find out how much money is actually invested in a business, find out the cost of production for every unit of
production. All of these companies know, to the last fraction, the cost price of the production of everything that they are turning out.
Then we want to know what part of the cost of production of every unit is labor and what part is capital, what part is overhead and
what part is represented in all the items that go to make the cost balance sheet.

Senator SIMMONS. They rest their case absolutely on that.

Senator LA FOLLETTE (continuing). What percentage of profit they make on their capital. Then we ought to get, as far as possible,
that same information with respect to the competing industries abroad. Then we have got a real basis for scientific tariff making.
Without that I think we are just fanning the air here, mainly.

Senator SIMMONS. Why, certainly.

Senator LA FOLLETTE. I believe that the witnesses who appear in as important a proceeding as this ought to all be sworn and they
ought to be required to answer.

The CHAIRMAN. I, personally, do not see any objection from the witness' point of view to his telling the committee what salary he
receives. It is a matter of common knowledge, ultimately, to a large number of people.

Senator LA FOLLETTE. I will just withdraw that question for a moment.

Mr. STONE. Thank you

Senator LA FOLLETTE. In what State is your company organized and incorporated?

Mr. STONE. Massachusetts.

Senator LA FOLLETTE. Did you not have to file an official statement with the secretary of state or some other State official?

Mr. STONE. Yes, sir.

Senator LA FOLLETTE. As to your earnings and capitalization and expenditures? I do not know just what detail is required, but in
many States the detail is sometimes very extended. You have to file such a statement as that, do you not?

Mr. STONE. We do. Just what the statement is I am frank to say I do not know. Not being the treasurer, and the document not being
before me that we have to file, I could not say positively what information it carries, sir.

I am thoroughly in sympathy with you, Senator La Follette. Let me say that. I believe that you gentlemen here are entitled to every bit
of information that will enable you to come to an intelligent and correct solution of this question.

Senator LA FOLLETTE. I can understand perfectly well that one official of a company or one company would be very reluctant to have
entered upon the record these facts with respect to their company unless similar facts are to be required as to all. I think they
should be required as to all and that they should all come before the committee and frankly state all of these matters that go to the
real basis of making a tariff that shall be amply protective but not excessively protective.

Senator WATSON. The whole question of the tariff, from the Republican standpoint, is the difference in the cost of production at
home and abroad. I do not see how we are ever going to get at that difference unless we know all the facts.

Mr. STONE. Let me say this, Senators La Follette and Watson, that the company which I represent is ready to file with you the
information which appears proper and which you gentlemen feel that you would require. Further, we will summarize this information
for you, if you please, if you will indicate how this information should come to you.

We, Mr. Penrose, want to help you gentlemen.

Senator LA FOLLETTE. That is a very fine spirit, permit me to say.

Mr. STONE. The Atlantic Dyestuff Co. is going the limit to help you gentlemen to see that it is only an embargo, like Senator Watson
has in mind, that will save us from being absolutely swallowed up.

Senator WATSON. A statement of that kind, of course, coming from you is valuable only as it is based on facts. We want to know the
facts. You make these dyes and they are also manufactured in Germany. What is the difference in labor cost and in overhead
expenses and in salaries in your company and the competing companies in Germany ? How else are we to get at this? We must
know the difference in the cost of production at home and abroad. That is the whole basis of tariff legislation.

Mr. STONE. I am in full sympathy with your statement.

Senator LA FOLLETTE. May I just say, Mr. Chairman, that I have started to work out—I have not completed it—a list of questions
which I think the committee ought to require every party interested in this tariff measure to answer. I will have completed them,
perhaps, by to-morrow's session, and I would like to submit them at this time for the committee's consideration. I have before me a
list of questions, but I think the number of questions can be reduced. My idea would be to simplify it to the least number of questions
that are essential to a right understanding of the problem before us.

Senator SIMMONS. Are those questions addressed only to the dye manufacturers?

Senator LA FOLLETTE. Oh, no; they are questions that ought to be asked, I think, of every party interested in this bill.

I will ask you to state, if you can, the various products that your company puts upon the market.

Mr. STONE. Let me state them rather as a group or groups, sir.

Senator LA FOLLETTE. How long a list would it be if you gave us the entire list, if you furnished us a list of your various
manufactures ?

Mr. STONE. Very short; four dozen, perhaps.

Senator SIMMONS. It is a quarter past 12 now, and some of us have to be over at the Capitol. We usually take a recess at noon. I
suggest that we take a recess now and finish this when we come back.

Senator LA FOLLETTE. That is entirely satisfactory to me.

The CHAIRMAN. In view of the fact that most of the members of the committee desire to go to the floor of the Senate for a brief
period, the committee will stand in recess until half-past 2 o'clock this afternoon. Meanwhile, the witnesses are excused until that
time.

(Whereupon, at 12.15 o'clock p. m., the committee took a recess until 2.30 o'clock p. m.)

AFTER RECESS.

The committee reconvened at the expiration of the recess, Senator McCumber presiding.

Senator McCUMBER. The committee will come to order.

Mr. CHOATE. Mr. Chairman, in the interest of time saving I should like to make a suggestion. The questions of Senators La Follette
and Watson at the end of the morning session indicated a desire, which perhaps the committee will share, to be informed as to the
capitalization and profits of substantially all of the companies in the business. Of course, the witnesses who are here are not
specially prepared upon that subject in such manner as would enable them to give satisfactory information.

Again, many of these witnesses have left because of the chairman's suggestion that only one or two should be heard from each
branch of the industry. Accordingly, it will be impossible to give that information in such way as the committee would like to have it, if
they want it at this time, and I do not know of any way in which it can be done in the ordinary course of the hearing unless the
committee should hold a new set of hearings later after a lapse of such time as would enable those companies to prepare this
information.

They want to help the committee by furnishing all the information that can be given. They would request that any such information be
withheld from their competitors, and above all, from their German rivals; but they stand ready to answer any questions that may be
asked them, and if the committee desires such information and will formulate such questions as they desire to ask.  A little
questionnaire, or a big one, for that matter, I can say for the great majority of the companies in the business the committee will
receive frank and complete answers, and that the companies will furnish witnesses to be cross-examined. That would save a great
deal of time and would enable you to close up this branch of the hearing, with one exception, and would enable you to get at those
facts thoroughly instead of partially and in piecemeal. I apologize for making a suggestion on a subject on which the committee is
wiser than I, but I do it for what it is worth.

STATEMENT OF CHARLES H. STONE, VICE PRESIDENT ATLANTIC DYESTUFF CO., BROOKLINE, MASS.—Resumed.

Mr. STONE. At the time the recess was taken, Mr. Chairman, I had shown the committee, I hope, that two of the three functions of the
American dyestuff industry as some of us conceive it have been reasonably well fulfilled during these past two or three years; that is,
the supplying of dyestuffs to the American consumers in a reasonable quantity and at a reasonable price.

Senator SMOOT. Before you proceed further, in order that I may know what goods you are making, will you kindly tell me what you
are manufacturing?

Mr. STONE. Chiefly in dyestuffs, sulphur colors, Senator Smoot.

Senator SMOOT. Sulphur blacks and all the sulphur colors?

Mr. STONE. Black, blue, brown, yellow, etc.

Senator SMOOT. You say "chiefly." What else are you making?

Mr. STONE. A few of the azo or direct colors, two or three of the basic colors, one or two developed colors, an acid color or two, and
we are still selling a chrome yellow which we made during the war for war purposes, the coloring for khaki, of which we have a
stock on hand. Whether we shall make that again depends upon the market.

Senator SMOOT. What is the amount of your manufactured product per year?

Mr. STONE. I think last year we produced—and I believe I can give this information without anyone taking exception to it or taking
advantage of it—five or six or seven million pounds of dyestuffs, a substantial quantity.

Senator SMOOT. I thought you were one of the little ones.

Mr. STONE. Well, Senator, we are, but we happened to be making quantity products.

Senator LA FOLLETTE. Was not that approximately a quarter of the total production of the country, or a fifth?

Mr. STONE. Not quite. It was 7 or 8 or 9 per cent. The total production in pounds was 88,000,000.

Senator LA FOLLETTE. Well, in value. I understood that you were giving you the value of your products.

Mr. STONE. I was giving the tonnage. In value our production would run below that of the average manufacturer.

Senator SMOOT. But you make about one-ninth of the production?

Mr. STONE. Say, from one-ninth to one-twelfth in tonnage.

Senator SMOOT. You must excuse me for asking, because I thought from the opening statement you made that you were just a little
manufacturer and appearing here for yourself and not for the great industry for whose salvation you are pleading.

Mr. STONE. I am appearing for the Atlantic specifically. Senator, but I feel that anyone coming before you should not ask to take up
your time merely to speak for a unit that is no larger than could be held in your hand. I have some information that I feel you gentle-
men could use to advantage, and as I have been in the dyestuff business for 18 or 20 years I feel that you should have the advantage
of whatever information I can give you.

Senator LA FOLLETTE. Are you a member of the American Dyes Institute?

Mr. STONE. We are.

Senator LA FOLLETTE. Will you describe that association?

Mr. STONE. If you will indicate the angle at which you wish information, Senator, perhaps I can give it to you better.

Senator LA FOLLETTE. When was it formed?

Mr. STONE. My recollection is that it was formed early in 1918.

Senator LA FOLLETTE. Early in 1918?

Mr. STONE. Yes. I may be off a few months in that statement.

Senator LA FOLLETTE. For what purpose was it formed? Why did your company join it?

Mr. STONE. I guess the best broad answer is that the steel industry has the steel institute, the packing industry has an association of
packers, and other industries have their associations which draw the men together and enable them to get acquainted and
generally promote good feeling among the members of the industry. I was not a charter member and was not directly concerned in
the formation of the American Dyes Institute. However, that is my conception of the reasons for which it was formed.

Senator LA FOLLETTE. On what terms did your company become a member of the association?

Mr. STONE. Again I shall have to give you a general answer. Senator, and I would say that we became members upon the terms that,
if you please, are laid down in the by-laws of the association.

Senator LA FOLLETTE. Do you pay a membership fee for your connection with the association?

Mr. STONE. Just as you pay-club dues if you belong to the Chevy Chase Club or to any club in your home town. I would say yes.

Senator LA FOLLETTE. Do you all pay the same amount, as you understand it?

Mr. STONE. I do not understand that we do.

Senator LA FOLLETTE. Is it based upon the amount of production— the assessment that is made for membership dues?

Mr. STONE. That is really a question for, and I must say also that the answer to your previous question should be answered by, one of
the members of the board of governors of the Dye Institute. I am not a member of the board of governors and I should not take it
upon myself to answer questions for them, because I am not so delegated.

Senator LA FOLLETTE. You can answer as to the terms of the connection of your own company?

Mr. STONE. In so far as I can I shall be glad to do so.

Senator LA FOLI.ETTE. What assessment is made against your company for dues?

Mr. STONE. I would have to go into our records and see, Senator.

Senator LA FOLLETTE. Do you not know?

Mr. STONE. I do not know.

Senator LA FOLLETTE. Have you never heard?

Mr. STONE. I would say yes. I am quite confident that we have had an assessment, but as to the amount I can not say, Senator.
Senator LA FOLLETTE. Was it as much as $25,000 a year?

Mr. STONE. I believe that some one published the financial report of the institute; perhaps in the Congressional Record. Am I right,
Senator McCumber?

Senator McCUMBER. I am not aware.

Mr. STONE. Maybe Senator Smoot can answer.

Senator SMOOT. Yes; I have it here.

Mr. STONE. If you have it there, perhaps that would indicate that the Atlantic would not be assessed $25,000.

Senator SMOOT. I do not know whether this is the one. Perhaps I had better read it and you can see if it is the one. This is an
itemized statement, beginning with "Hotel bills, $7,670.28; tips, meals, hotel, taxi cab, etc. $876.66; Evarts, Choate, Schurman, and
Leon, fee, up to October 10, 1920, $25,000; Judge J. Harry Covington, $25,000; Evarts, Choate, Schurman. and Leon, Joseph H.
Choate, jr., traveling expenses to Paris, $1,505.01; payment on account of Paris trip. Joseph H. Choate, jr., $3,494.90; Evarts, Choate.
Schurman, and Leon, $1.020.96; various expenses incident to distribution of A. D. I. pamphlet (that is the one that they delivered to us
last year), $872.93; expense incidental to distribution done by legislative committee. $497.12: article prepared and published,
$301.29; Congressional Record, for printing, $328.91; supplying, addressing, and mailing postals, envelopes, in congressional
dvestuff hearings, $559.82."

Is that the one to which you have reference?

Mr. STONE. That is the one to which I have reference, Senator Smoot.

Senator SMOOT. That, I will say, is in the record.

Mr. STONE. That total there is, perhaps, around $100,000, is it not, if it is totaled?

Senator SMOOT. It is $104,932.61. That is for the one year?

Mr. STONE. Yes. A deduction along these lines would indicate that the amount we were assessed would be comparatively small. We
have 82 separate independent dyestuff manufacturers in America. We have about 115 separate independent intermediate
manufacturers in America.

Senator SMOOT. You must pay in accordance with your production, because the little man would not pay as much as you do.

Mr. STONE. Perhaps that is true. Then we have a number of crude manufacturers and a number of these manufacturers, I believe,
are members of the institute.

Mr. METZ. This paper gives the number and the proportionate amount.

Senator SMOOT. Then it is on an assessment basis?

Mr. STONE. It is on an assessment basis.

Mr. METZ. I am assessed there twice as much as Mr. Stone. I have all that information if you want it. I hope there is not any secret
about it, so far as the institute is concerned. There should not be. The total amount is about $100,000, so you can figure the
assessment for that year. Some of them have not paid and I guess they never will pay.

Senator SMOOT. Perhaps the Congressional Record is wrong as to that $104,000, but it does say "The high cost of lobbying for the
establishment of a dye-licensing system is shown in the financial statement of the American Dye Institute for March 9, to the
members of the institute." This does not show all the expense of the institute; this shows only the lobby that is going on for this
embargo.

Do you know, Mr. Stone, how much the total expense was for that year?

Mr. Stone. I do not know, Senator.

Senator LA FOLLETTE. Do you know how much your total contribution was for that year?

Mr. STONE. Our books would show that information. Senator, but I do not know what it was.

Senator SMOOT. It would be about one-ninth of the amount, whatever it was.

Mr. STONE. I hope that it is not that much because the money value of our production would not be one-ninth of the money value of all
the production of colors, if you please.

Senator LA FOLLETTE. You were about to proceed when I interrupted you, Mr. Stone.

Mr. STONE. The quality of American dyes has been attacked. I have shown you the two other things, quantity and price, as being
reasonable. We people who are making dyes in this country feel that the quality of them is on a parity with the quantity and the
reasonableness of the price.

I would like to give you gentlemen first of all, if I am not making myself ridiculous for wearing old clothes in these days when every-
body is trying to economize, a tangible illustration of what I have in mind.  The fabric in the suit that I nave on was made by the
American Woolen Co. in 1917, and it was dyed with dyestuffs made by the W. Beckers Aniline & Chemical Co. before that company
became a part of the National Aniline Co. The suit has been worn, as you see. I call your attention to the color fastness. If the color on
my shoulder after a number of years' service is as clear and bright as the color under the lapel, then there certainly must not be
found any fault with the quality of the dyestuff, especially in view of the fact that there is no rubbing on my cuffs or no rubbing on my
linen anywhere. In other words, the fastness of the color is perfect; it is perfect as to rubbing, it is as brilliant as you want. I believe
Senator McCumber has on something nearly like it, perhaps dyed with American-made dyes. Blue colors for serges are important,
because they constitute one of the large items of American dye requirements.

Let us go to another large item. Black, of course, is used in the largest quantity of any dyestuff that is made. We have the 1919 report
of the Tariff Commission before us, and on page 10 we find this statement:

“Sulphur black, which is consumed in the United States in larger amounts than any other color, was produced to the extent of
fourteen and a half million pounds by 13 manufacturers. Some of the American brands are superior in quality to the best products
imported from Germany before the war. Another notable achievement was the production of indigo, etc.”

Senator McCUMBER. You are reading from the report of the Tariff Commission?

Mr. STONE. Yes, sir.

Senator SMOOT. Nobody has claimed, as I have heard, during this discussion that sulphur blacks were not just as good made in
America as anywhere else.

Mr. STONE. Sulphur black constitutes a very large percentage of our dyestuff consumption. We make a great many other colors that
are equally satisfactory, perhaps, when they are intelligently and properly applied on the proper fiber. You have had evidence
admitted that the American made dyes did not meet the requirements of the witness.

Senator SMOOT. That is, some dyes; not the staple dyes.

Mr. STONE. That is some dyes. We know that at the outbreak of the war there were a great many dyestuffs in America of German
and other origin. We know that in the scramble for dyes—you, Senator Smoot, know what it was, because your superintendent had
to scramble with the others—in the scramble for dyes everybody got as many dyes as he possibly could, regardless of quantity or
price.

As a practical dyestuff man, I can easily understand how a hat manufacturer would buy, if you please, indigotine or some other
exceedingly fugitive color for dyeing his hats which should not any more be used on hats than the essence of the green grass out
there, and, as one of the gentlemen suggested the other day, he would have to turn it around in the window to have it the same color
on either side.

Senator SMOOT. He did say, however, that his blacks were just as good in American dyes as the German dyes.

Senator McLEAN. His complaint was with regard to brown and steel colors.

Mr. STONE. Indigotine was used perhaps for dyeing hats when it should not have been. Indigotine goes right through anything that
you can put it on, Senator Smoot, regardless of how thick it is felted. It is so fugitive to light that it is out within a few hours. It is the
misapplication of dyes, applying them to a use or to a fiber for which they were not manufactured.

Congo red was discussed here this morning. Some of our American textile manufacturers used Congo for a pink in 1916. Congo is
so fugitive that if Mr. Choate were telling you about it he would tell you that it runs so fast that a man could not keep up with it. It is the
misuse of the American dyes and not their poor fastness that has caused us the trouble.

Senator SMOOT. I can imagine a dyer dyeing 24 dozens at once and, finding it no good, not wanting to use it again.

Mr. STONE. I can appreciate his viewpoint, and as a manufacturer and distributor of dyes, having been connected with it all during
the war, I have felt and I have told many of the customers of the American manufacturers that if they would frankly put their dyeing
problems up to the American manufacturers the chances were 100 to 1 that there would be no misfits, if I may use that word, of
dyes. No indigotine would go on hats and no direct black would go on hosiery.

I believe that a good deal of the opposition to the American dyestuff industry is based on the belief that there is, or is to be, a
monopoly of dye manufacturers, or a dye manufacturer monopolizing the American market. I would like to direct your attention to
these facts, which are proven by the records of the Tariff Commission, to controvert any thought or accusation of a dye monopoly.
The Tariff Commission report for 1920 shows that there are about 24 producers of crude materials in the United States which are
used in coal-tar dye making, and such important crudes as benzene, naththalene, anthracene, and a few others are made by from 5
to 13 different independent manufacturers.

Again, we find there are about 116 producers of intermediates used by the dye makers in the United States, and such important
intermediates as aniline oil, anthraquinone, beta naphthol, benzidine base, dimethylaniline, H. acid, monochloro benzol, nitrobenzol,
R. acid, refined naphthalene, salicylic acid, and xylidine are made by from 6 to 16 separate independent makers.

Again, we find there are 82 separate dyestuff manufacturers in the United States of finished coal-tar dyes, making in the year 1920
360 individual separate dyes. Such important dyes as alizarine yellow, fast red, chrome black, acid black, bismarck brown, benzo
blue, direct black, magenta, methyl violet, methylene blue, nigrosine, and sulphur black are made by from 8 to 16 different
independent concerns.

Further, there are three different independent manufacturers of synthetic indigo in America, and three others that I know of—the
English dye trust, the Swiss dye trust, and the German dye trust.

In so far as I have been able to determine, there are no interlocking directors among the, American dyestuff manufacturers.

Further, we may say that a number of the dyestuff companies are family owned affairs, and we could mention as instances the Du
Pont Co., the Grasselli, and others. So far as I can determine, no company in the United States controls any single one of the
materials which are used in making any one of the important dyes required by the American dyestuff consumers.

We also, in connection with the monopolies, should review what the American dyestuff manufacturer and the American public face
in the other countries producing coal-tar dyestuffs.

We have just had the report of the English dyestuff commission, a commission from Parliament, which investigated the matter, and
which Mr. Choate mentioned this morning, showing that the British dyestuff corporation, the stock of which is partially owned by the
British Government, produces substantially 75 per cent of all the dyes made in Great Britain. Here we evidently have a pretty tight
monopoly. If we go to France we find that the French Government has assisted—perhaps subsidized—the French dyestuff makers.
We also find that the French Government has placed so high a tariff on dyes entering France that in some cases the tariff is much
higher or amounts to much more than the present American valuation of the dyestuffs in question.

We could go on to Switzerland, which is an important coal-tar dyestuff producer. She has been making dyestuffs and colors in Basel
since 1792, if my memory is good. We find that our Swiss friends, who are separated by the Rhine from Germany, have adopted
many German customs, and among these they have formed themselves into a cartel patterned after the German cartel. Therefore
we have in Switzerland a very good dye trust.

We know that Japan has not only subsidized her dye makers, but she has guaranteed a dividend on some of the stock of some of
the leading dye-making companies. So, whether they have a trust in Japan or not, they have a subsidized industry.

It is very interesting to note that Italy, a country that has only a very small dye-making industry, the other day provided that no coal-
tar dyestuffs or intermediates shall be admitted into Italy except under license.

In this respect we should come back to England and remind ourselves that England, in her desire to promote her dyestuff industry—
for which the American Nation should certainly be thankful, because they were one of the big factors in winning the war in the
manufacture of munitions—has placed a 10-year embargo on dyestuffs from other countries: and we in America feel it just the
same as they do in Germany.

Then we come to Germany. It is hardly necessary for me to say, except that I do not want to leave them out of this summary, that
there we find the greatest of all of the dye trusts. We find the German chemical cartel, in which all of the large manufacturers,
according to the information that comes to us through our Department of Commerce here, are members. So we have there a very
tight and complete monopoly.

This thought occurred to me the other day when one of the gentlemen was testifying here: Complaint was made of the delay in
getting dyes from Germany; and it is not inconceivable to me that the head of the German dye cartel would see to it that orders
placed with the cartel for dyes that American manufacturers need, or think they need, should not come to them with any degree of
promptness, therefore simply adding to the propaganda that we know is being put out by the German dyestuff kartel in this country.

I think I should also mention, speaking for our company and having to mention other facts regarding the industry, that we have an
enormous investment in this country—enormous for the dye makers—of substantially a hundred million dollars; and it is the opinion
of the dye makers here that if we are not given the proper protection, our investment, the investment of 8,000 to 10,000 American
citizens, will practically, if not actually, be destroyed, junked, and abandoned. It is for that reason, gentlemen, that we feel we must
come to you and ask you to give us such protection—Senator Watson's embargo bill, if you please—as to enable us to keep
functioning in an orderly way, to continue as a reliable source of supply to the American textile and other dye users, and have our
plants placed so that, as Gen. Fries told you yesterday, they may be called upon as a source of munitions in case of war, from the 15,
16, 18, or 20 concerns that have nitration plants. Gentlemen, I thank you.
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