Moving Picture World (Jan-Feb 1922)

January 7, 1922 MOVING PICTURE WORLD 49 Film Manufacturers ’New Brief Requests Still Higher Import Duty on Raw Stock A SPECIFIC rate of not less than % of a cent a foot on positive film and of not less than 1*4 cents a foot on negative film was advocated before the Senate Finance Committee December 23 by Charles H. Cole, treasurer of the Bay State Film Company of Sharon, Mass. General Cole was spokesman for the Eastman Kodak Company and Powers Film Products, Inc., both of Rochester, N. Y., and the Ansco Company, of Binghamton, N. Y., all manufacturers of motion picture film, sensitized but not exposed nor developed. General Cole asked that in the event it is not desired by the committee to impose this specific duty, an ad valorem rate of 35 per cent., on the American Valuation Plan, or 50 per cent, on the foreign value of the product be provided. The witness told of conditions existing in the industry and presented figures showing how the foreign merchandise competes with that of domestic production. His statement before the committee was substantially as follows : “Moving picture film sensitized but not exposed nor developed is now on the free list under the present tarifif act. Under H. R. Bill 7456, paragraph 1451, a duty of twenty per cent, ad valorem (American valuation) is imposed on moving picture film. We urge that this duty is not high enough even to cover the difference between the price at which foreign film is sold in this country and the actual cost of making American film, and of course the cost of making foreign film is necessarily lower than its selling price. Additional Protection “At the time when the arguments in favor of a duty on moving picture film were presented before the House in the early part of the year, a less amount of protection was requested. Since that time the rate of exchange and further evidence of lowering foreign cost of production, have made it necessary for us to ask for the additional protection that we now do. “We would therefore urge the committee to impose a specific duty of not less than °f a cent a foot on positive film and not less than 1*4 cents a foot on negative film. If this specific duty is not imposed we request and urge an ad valorem duty of 35 per cent. (American valuation). If the bill is passed upon the basis of foreign valuation we would ask an ad valorem duty of 50 per cent. If a specific duty is imposed, all uncertainty as regards cost will be removed and both the importer and the American manufacturer will know exactly where they stand. “Moving picture film is produced by coating celuloid (pyroxylin) with photographic emulsion. To manufacture a satisfactory product of uniform standard and quality requires special plants and machinery of expensive construction as well as long experience and technical skill of the highest order. Approximately 90 per cent of all film sold is positive and 10 per cent, is negative. $50,000,000 Invested Here “This industry is essentially American, created by the genius of Americans, and its supremacy here should be maintained, but to do this, the basic patents now having expired, will require the duty we advocate. “On January 1, 1921, there were five manufacturers of moving picture film in the United States, namely : Ansco Company, Binghamton, New York: Bay State Film Company, Sharon, Mass. ; Eastman Kodak Company, Rochester, New York; Eagle Rock Film Company, Eagle Rock, N. J. ; and Powers Film Products, Inc., Rochester, New York. The two last mentioned plants have been closed for some months because of foreign competition. “The total investment by American film manufacturers for plant and equipment not suitable for other purposes represents an aggregate of approximately $50,000,000. We believe that it is absolutely necessary that the duty we ask be imposed as evidenced by the following facts : “The cost of production to the American manufacturer is $1.92 a hundred feet. This is based upon the actual figures for the first eleven months of 1921 as taken from the books of the Bay State Film Company of Massachusetts, as follows : Celluloid (film base) $1.00 Silver nitrate, gelatine and other chemicals 312 Labor and manufacturing expense ... .51 Overhead 10 Total $1,922 Sells for $2.25 “This total does not include any allowance for depreciation or return on invested capital. These figures include average wages to employes of $4.80 a day. The present selling price of American positive film is $2.25 a hundred feet. “As against this American cost of $1.92 a hundred feet the selling price of Agfa (German film) in Germany is from 92 cents to $1 a hundred feet. This includes the manufacturer’s profit, therefore the cost of production must be less than the selling price.” The document here refers to letters submitted to show that the price of German film given above is correct. “Furthermore, the American manufacturer is at a tremendous disadvantage with the foreign manufacturer, because he now has to pay a duty of 40 per cent on the celluloid base, which comprises 75 per cent, of the total cost of the materials that enter into the manufacture of the film. This amounts to 40 cents a hundred feet of film under the present tariff act, and under House Bill 7456 the duty would amount to 50 cents a hundred feet of film (American valuation). As roll celluloid it is subject to this duty, but by coating it with a photographic emulsion it is allowed to come in free, a great injustice to us, if we are not given an equivalent duty on film.” The document then quotes government statistics to show that imports of raw film are increasing, summarizing the figures as follows : “The rate of importation for these first four months show a gain of more than 63 per cent, over 1920-21, of more than 500 per cent, over 1919-20 and more than 1,000 per cent, over 1918-1919. Sees German Domination “The great danger confronting the American film manufacturer today is that the great German chemical trust, which owns the Agfa Company, will virtually acquire the entire American market for unexposed film and dominate the motion picture industry, the fourth largest industry in the United States today, unless the industry is protected by the duty we request. “The amount of protection which we ask is barely enough to bring the selling price, not the cost price, of the Germanmade product up to our own cost of manufacture. If a duty of % of a cent a foot on positive stock is imposed, the German made film can still be sold in this country with a profit, at a price no higher than the present American cost of production. “I submit copies of invoices sworn to by American Consuls, showing prices at which foreign made film is sold in other countries. American manufacturers cannot compete with these prices and American-made film has already been driven out of the countries above referred to. I would emphasize the fact that these prices are not the cost prices, but the selling prices which include both export and import duties, selling and transportation costs, in addition to profits. The profits must be very large in France and Italy, as the prices there are 30 to 40 cents a hundred feet higher than in England, which is a further testimony to the fact that German costs are so low they can meet any price that may be made by their competitors. “In urging this specific duty of ^4 of a cent per foot on positive film and 1^4 cents on negative film, we are not asking for a duty that will exclude the foreign made product. Even free trade Great Britain imposes a specific duty of 2/3 of a cent a foot on all positive film at the normal rate of exchange.”