Solid extract may be dried for about 0.3 cent per pound. This type of extract, however, is definitely not desirable because of its high moisture content and alteration of the tan liquor during evaporation. Because of the long haul from producing plants near the Pacific coast to the consuming markets in the East, a product of maximum total solids content and minimum moisture content is absolutely essential. Powdered western hemlock-bark extract is practically nonhygroscopic in the trade sense of the word. In moisture-proof paper-lined containers it may be shipped by ocean freight or stored for long periods in humid regions without becoming caked or difficult to handle and redissolve. It has been demonstrated that western hemlock-bark extract can be used alone to produce marketable commercial leathers. Leather tanned with this material alone is firm but not harsh. Its fibre weave and fiber strength are excellent, but judged by present commercial standards the color is undesirably deep. The extract blends readily with the usual tanning materials. When mixed in blends up to 50 percent it does not materially alter the speed of tanning but produces a leather of a noticeably firmer and tighter fiber. Carefully controlled sole-leather tanning tests were made comparing the regular leather with leather made by substituting western hemlock-bark extract to the extent of 33% percent in the lay-aways. The leather made from the hemlock mixture was even in color and while a little redder or pinker than some tannages the color was more pleasing. The most noticeable difference was in the fiber. The hemlock leather had more flexible firmness or "bone" and was a satisfactory stock for outsoles. In other similar tanning studies, the substitution of the hemlock extract to the extent of one-third of the blend slightly enhanced the cutting value of both the outsole and insole leathers produced, improved the appearance and feel of the finished leather, and increased its ability to withstand wetting and redrying without loss of solidity and pliability. Wear tests with midshipmen of the United States Naval Academy and with civilians showed that it added about 7 percent to the wear of the leather as compared with regularly tanned stock made from opposite sides of the same hides. The smallest practical extract plant should have an annual capacity of 2,000 tons of powdered extract, and be so designed as to be capable of expansion to twice this capacity without doubling the plant investment. A plant producing 4,000 tons of extract will consume about 22,000 tons of bark, which is probably the maximum quantity that can be readily assembled yearly at any one location. Because of the distance involved, the cost of transporting the extract from the Pacific coast to the East is a vital factor. In any proposed commercial development, early consideration and fixing of a favorable freight rate is of utmost importance. The cost of producing powdered western hemlock-bark extract, including drying and storing the bark, processing, transportation, and marketing, but exclusive of the cost of the bark, is estimated at $48.80 per ton. Capital requirement, including site, buildings, equipment, a year's supply of dried and stored bark, and a stock of extract equal to 20 percent of the annual production, is estimaed a $280,000 for a plant producing 2,000 tons of extract yearly. On the basis of an average value of 8 cents a tannin unit and a tannin content of 55 percent, a selling price of $88 per ton of extract is obtained. It is estimated that this selling price would permit only about $4.73 per ton, or $5.44 per cord, for bark of 15-percent moisture content. At many operations this price would more than offset the cost of the necessary removal of the bark. Whether it is sufficiently attractive to encourage proper salvage of the bark is doubtful. That the extract may find its place among the preferred materials and eventually bring a higher selling price is a reasonable expectation. Domestic-bark tannins from chestnut oak bark and eastern hemlock bark are recognized as preferred materials. The top selling price for powdered western hemlock-bark extract cannot be determined at present. At 10 cents per tannin unit the selling price of the extract would be $110 per ton. It is estimated that this price would allow about $8.13 per ton, or $9.35 per cord, for the bark. Prices for bark in this range it is believed would prove quite attractive, but on the other hand 10 cents per tannin unit will meet with strong sales resistance. Development of the hemlock bark of the Pacific coast region as an important source of tanning extracts can succeed only if undertaken with sound financial backing adequate to survive a comparatively costly introductory period of several years. This must be coupled with experienced management and rigid chemical control to secure maximum yields of a uniform product. Production must be on a scale large enough to insure the tanner adequate future supplies at reasonably competitive prices. This must be supplemented by a sales force thoroughly acquainted with the leather industry and the technology of tanning. Successful utilization of the bark hinges on a rather narrow working margin of profit. A careful balance must be struck whereby sufficiently attractive prices can be offered for the bark without, however, imposing upon the extract a selling price that is prohibitive. Quick returns and large profits are not to be expected. On the other hand, in view of the tremendous quantities of bark and our large annual consumption of tannin in the making of a basic national commodity, namely leather, there appears to be an opportunity of establishing a permanent business of large volume. Successful salvage of the bark as tanning extracts would increase our taxable wealth by adding value to a product that is now not used, give employment to domestic labor, decrease our dependence upon foreign materials, thereby adding to our national security in an emergency, and increase our exportations in normal times. EXHIBIT No. 181 POSSIBLE TANNIN SUPPLY FROM THE BARKS OF THE DOUGLAS FIR AND HEMLOCK TREES IN THE NORTHWESTERN STATES HON. HARLEY M. KILGORE, TAKOMA PARK, MD. Senate Office Building, Washington, D. C. DEAR SENATOR: Dr. Herbert Schimmel has shown me a transcript of the record of your committee's investigation of the vegetable tanning material supply situation. With the feeling that this record did not bring out the opportunities of the tannin supply possible from the barks of the Douglas fir and hemlock trees produced in the Northwestern States, I enclose herewith a brief report on the possibilities of obtaining an adequate supply of vegetable tanning material from that area. Several research projects have shown that for a relatively small investment a permanent new industry can be established in that area which would be desirable from both an economic and military viewpoint. Yours very truly, FREDERICK A. CROSS. STATEMENT OF FREDERICK A. CROSS, TANNING MATERIALS CONSULTANT With the idea of stabilizing and perhaps solving the tannin supply situation, it is recommended that consideration be given toward means of making available to domestic tanners the supplies of tannin from the bark of the hemlock and Douglas fir trees which are produced in the States of Washington and Oregon. This tanning material, if made available, will reverse the present supply situation whereby 70 percent of the vegetable tannins required for the leather industry must be imported to a position whereby only 20 percent will be needed from foreign sources. There is at present no substitute for the vegetable-tanned-leathers (which accounts for 75 percent of the leather made for military purposes) required by the military services; at the present time the available domestic production of vegetable tanning materials is sufficient for only 30 percent of military requirements. The present domestic supply of tannin is largely derived from chestnut wood native to the Appalachian Range in Virginia, North Carolina, and Tennessee. A blight has killed the chestnut trees and at present tanning extracts are being made from the dead wood. Within a comparatively short time (estimated to be as little as 2 years and as long as 6) this source of tannin will be exhausted, at which time the tanning industry will be dependent entirely upon foreign sources for a supply of vegetable tanning materials. For all practical purposes, it can be assumed that the foreign tanning materials available are controlled by a foreign cartel. This control, in effect, is reflected in the costs of leather and shoes produced in this country. In the hands of any unfriendly group, it could well be contrary to the interest of the shoe and leather industry in this country. It is presumed that the influence of this cartel is respected by the major producers of domestic tanning materials due to the fact that they are in a dwindling industry which must eventually look to this cartel for a supply of foreign raw materials with which to operate their plants, unless the west coast materials are made available to them. The production drop in chestnut extract from 100,000,000 tan units in 1942 to 75,000,000 in 1943 indicates how rapidly the chestnut supply is dwindling. The Nation's requirements of vegetable tanning materials are 300,000,000 tan units annually (1 pound of tannin equals 1 tan unit) valued at approximately $30,000,000, 70 percent of which is now imported. There is a potential supply of excellent tanning material in the States of Washington and Oregon estimated at 540,000,000 tan units annually, or a great deal more than the needs of the domestic leather industry. This is from the bark of the hemlock and Douglas fir trees harvested in that area. It has been and is still the custom to use these tannin-bearing barks for fuel for the sawmills, giving them a value of from $1.30 to $2.50 per ton for this purpose. The value of the tannin in these barks ranges from $14 to $32 per ton, and they still can be used for fuel purposes after the tannin has been extracted. Surveys have been made of western hemlock barks as a source of tanning material by both provate and Government agencies over the past 25 years but methods of making a commercially successful tanning extract from these barks have only recently been developed. Among the difficulties encountered in planning for the development of western hemlock bark tanning extract has been the lack of labor supply in collecting the bark and technical methods for removing the salt from the bark of those logs floated to the sawmills in sea water. The development of the hydraulic barker has taken care of the labor problem and methods of removing the salt from bark have been developed to a point where that is no longer a problem. The Bureau of Agricultural Chemistry and Engineering some years ago completed work on the technology of preparing and utilizing tanning extract from western hemlock bark. They demonstrated that this material produces tough long-wearing leather, and authorities are agreed that it can readily and satisfactorily be incorporated into current tanning blends. During the past 12 months one of the west coast timber companies has been operating a pilot plant producing commercial tanning extracts experimentally from hemlock bark for the purpose of determining both the costs and the most practical methods of operating tanning extra plants. It is understood that this company has developed a process for making tanning extracts on a commercial scale to a point whereby it is possible for them to deliver western hemlock tanning extract to eastern tanners at a price competitive with those foreign materials of equal quantity now being imported. It is also understood that this company plans to go into the tanning extract business after the war. When the pilot plant was started this company had planned to start in the tanning extract business at once but the lack of interest on the part of any war agency to a new domestic source of tannin in the face of a supply situation which at that time was extremely critical gave them the impression that they would have to fight with the Federal Government to get priorities to build extract plants so that they did not proceed as planned. There are other timber companies in the States of Washington and Oregon who are capable of manufacturing tanning extracts from the tannin bearing barks at their disposal and no doubt willing to go into this business if they have any encouragement. It is also understood that some of the present producers of chestnut extract would like an opportunity to manufacture tanning extracts from these western barks. The producers of chestnut extract face the prospect of going out of business in a few years because of the shortage of chestnut wood. At present they have idle plants and equipment which could be moved to the areas in Washington and Oregon where the hemlock and fir barks are produced and started in the production of tanning extracts. There has been little development work on the tannins from Douglas fir bark. These tannins are of the same nature as hemlock and have been used in some of the tanneries in Oregon over a number of years in the manufacture of heavy leather. The bark of the Douglas fir tree contains from 7 to 11 percent tannin. An estimate of the total amount of tannin possible from this source, figuring the tannin at 7 percent, it 420,000,000 tan units annually of 140 percent of the national requirements. From hemlock bark it is estimated that 120,000,000 tan units are possible annually. A very conservative estimate from practical observations is that 70,000,000 tan units from hemlock bark and 80,000,000 tan units from Douglas fir bark annually can be made available to tanners in a very short time. This would take care of 50 percent of our annual requirements and would place this country in a position to have some control over world markets of tanning materials. It is estimated that it will require at the most $15,000,000 in capital expenditures to erect plants capable of producing 150,000,000 tan units annually. There have been no points selected for the collection of bark from Douglas fir, but the Forest Service of Department of Agriculture believes two of the logical points for the collection of hemlock barks are near Longview on the Columbia River in the State of Washington and near Salem on the Willamette River in the State of Oregon. The long range possibilities of the development of a tanning extract industry based on the tannins from western hemlock and Douglas fir barks are of national interest as these barks offer an inexhaustible supply of tannins. It is estimated that quebracho, the most important source of tanning material, produced in Argentina and Paraguay, will be exhausted in 25 years. In the past tanneries have gravitated to the tanning material source rather than to the source of hide supply. The present location of the majority of the vegetable leather tanneries of the country is in or adjacent to the Appalachian Range, where at one time there was an ample supply of hemlock bark, oak bark, and chestnut wood. When hemlock bark was available in the State of Wisconsin that State had a large number of vegetable sole leather plants. When it is considered that there are nearly 3,000,000 cattle hides produced annually on the Pacific coast, most of which are shipped to tanneries near the Atlantic coast, the development of a tanning extract industry on the Pacific coast should cause tanneries to locate there. EXHIBIT No. 182 Mr. JOHN JACOBSEN, DEPARTMENT OF COMMERCE, BUREAU OF FOREIGN AND DOMESTIC COMMERCE, Senate Subcommittee on War Mobilization, Senate Office Building, Washington, D. C. DEAR MR. JACOBSEN: In accordance with your request, I am sending to you certain data relating to quebracho as follows: 1. United States imports of quebracho, wood, and extract, during the years 1937-42 and the first 9 months of 1943. Please note that these data for 1941 and later periods are held confidential for security reasons and should not be given further dissemination. 2. Exports of quebracho extract (solid) from Argentina and Paraguay during the years 1919-42 and New York market price 1929-42. We were unable to compile a table along exactly the lines which we discussed in our conversation. Total production figures are not available for the entire period in which you are interested, so that we have offered as a substitute exports from the two principal producing countries in quantity only. The value figures might have been compiled also in order that unit values could be computed, but the problem of converting to a common unit of volume is a formidable one for recent years and the results would have been unsatisfactory for other reasons also. In lieu of a computed unit value, we are providing New York market prices for most of the period concerned. 3. Estimated world production of quebracho extract (solid) 1939, 1941, and 1942. 4. A Tanning Material Survey issued some years ago by this Bureau which contains, page 27, some information on quebracho extract prices. If we can be of further service to you in your studies of the quebracho industry, please let me know. Sincerely yours, AUGUST MAFFRY, Chief, International Economics and Statistics Unit. 1940. 1939 1938. 1937. TABLE 1.-Quebracho: United States imports, 1937-40 Source: Division of Foreign Trade Statistics, Bureau of the Census, United States Department of Commerce; International Economics and Statistics Unit, Bureau of Foreign and Domestic Commerce, Nov. 15, 1943. TABLE 2.-Quebracho extract (solid): Exports from Argentina and Paraguay, and New York market prices, 1919-42 Source: Official sources, United States, Argentina, Paraguay: International Economics and Statistics Unit, Bureau of Foreign and Domestic Commerce, Nov. 15, 1943. TABLE 3.—Quebracho extract (solid): Estimated world production, 1939, 1941, and 1942 Source: U. S. Department of Commerce; International Economics and Statistics Unit, Bureau of Foreign and Domestic Commerce, Nov. 15, 1943. |