both unbleached and bleached, in the Pacific coast region, exclusive of interest, were even in 1934 and 1935 considerably below the average mill realization.

1 Cost-of-production data shown cover costs at the producing mills but do no include transportation charges incurred on such pulp as is delivered to separate converting mills.

SULPHATE PULP

Practically the entire domestic output of sulphate pulp is converted into paper or board in plants integrated with the producing mills. Of the 1,400,000 tons produced in 1935, only about 46,000 tons or about 3 percent was shipped from the mills as pulp, and over two-thirds of this quantity went to paper mills affiliated with the pulp mills. The converting mills which purchase large quantities of sulphate pulp are mainly located in the Northeastern and Lake and Central regions, and up to the present their demands have been supplied almost entirely by imports.

There has been in recent years a rapid expansion in the demands for products made from sulphate and in sulphate production in the South. These developments are still in progress and new Southern mills completed in 1936 and 1937 and projected for the next 2 years indicate additional capacity equal to approximately 50 percent of the total domestic consumption of sulphate in 1936, and greatly exceeding the total imports in that year.

In 1935 about three-fourths of the domestic production of sulphate was in the Southern region, the remainder being about equally divided between the Pacific coast and Lake and Central regions. In 1936 doubtless an even greater proportion was produced in the South. Up to and including 1936 the domestic consumption of sulphate was expanding, in absolute quantity though not in percentage, even more than was domestic production, so that imports, to supply domestic paper and board manufacturers who do not produce their own pulp, were also expanding greatly though not in as large proportion as domestic production.

There was about a fivefold increase in the consumption of bleached sulphate in 1936 over predepression levels, and the new mills previously mentioned will further increase the output. However, even in

1936 only about 10 percent of the sulphate pulp used in the United States was bleached, and the approximate doubling of the consumption of unbleached sulphate since 1929 has been a much more important feature of the industry.

Imports of unbleached sulphate pulp come principally from Europe. Sweden alone has supplied well over two-thirds of the total in recent years. Approximately one-tenth of the imports have come from Canada, but a large part of this represents shipments to domestic converting mills from Canadian affiliates, Europe supplying practically the whole of the large open-market demand. A smaller part of the bleached than of the unbleached sulphate pulp imported from Canada. goes to affiliated converting mills; Canada supplies the major part of the open-market demand for such pulp, though the imports from Sweden are also important.

So far there has been little tendency for domestic sulphate mills to increase their small sales to unaffiliated paper and board manufacturers. In the early months of 1937 two new sulphate mills in the South began shipments to affiliated paper mills in the Northeastern and Lake and Central regions. A sulphate mill on the Pacific coast which has recently resumed operations has also started shipping a large part of its production to affiliated paper mills in the Northeastern region. It is possible that should the outlets for products of sulphate, principally wrapping paper and container board, cease to expand, or expand but slowly, domestic mills will supplant foreign sources in supplying the open market with sulphate pulp; but under such a condition, it is also possible that paper and board made by integrated domestic mills would supplant the products now made from imported pulp by mills without pulp-producing facilities. The probable effects of the current great expansion in the capacity of the Southern sulphate industry on the pulp and paper trade cannot yet be forecast with any confidence, particularly in view of the rapid increase in demand for sulphate pulp products.

MECHANICAL PULP

The production of ground wood in the United States, like that of sulphate, is almost entirely in integrated pulp and paper plants. However, unlike sulphate, the consumption of ground wood in United States paper mills that do not have their own pulp mills is relatively small, and hence imports are of minor importance. In 1935 about four-fifths of the total mechanical pulp converted in the United States was produced in domestic pulp plants integrated with the converting mills. As already pointed out, ground wood goes very largely into newsprint paper, and foreign ground wood is imported into the United States principally in the converted form of newsprint rather than as pulp.

Ágain unlike sulphate, the trend of the domestic consumption of ground wood was downward from 1926 to 1932 and the recovery that occurred thereafter had restored consumption in 1936 only to about 90 percent of the 1929 level.

Of the shipments of ground wood from domestic mills, which in recent years have amounted to from ninety to one hundred thousand tons annually, or considerably less than 10 percent of the domestic production, over four-fifths have gone to paper or board plants affiliated with the pulp mills. The sales to unaffiliated mills, which have amounted

to between 12 and 2 percent of production, have supplied less than onetenth of the total ground wood used by the domestic converters who purchase their supplies. Their demands, which in the aggregate are relatively small, have been supplied principally by imports from Canada, though some imports come from Europe. As with other kinds of pulp, a substantial part of the imports from Canada goes to paper mills from Canadian pulp mills under the same control.

The shipments of domestic ground wood are almost entirely from mills in the Northeastern and Lake and Central regions, the greater part being from integrated pulp and paper plants which consume the bulk of their output of ground wood in their own operations.

Most of the ground wood that is shipped within this country, and in international trade as well, is moved wet, with a water content of from one-half to two-thirds of the gross weight. The domestic pulp is shipped for the most part only relatively short distances. Some of the shipments of Canadian ground wood to the United States are also for limited distances. The small imports from Europe can be shipped long distances principally because of the relatively low water rates, but also because European shipments to the Lake and Central region are in almost air-dry condition.

The principal reason for the decline in the domestic consumption of ground wood since 1926 has been the decline in the domestic production of newsprint paper; consumption in other kinds of paper, taken together, has increased considerably. With the advance in newsprint prices in 1936 and 1937, it is possible that there has been some increase in recent months in the domestic production of ground wood. However, it is unlikely that there has been during this time, or that there will be in the future, any large increase in the sales of ground wood in the United States either by domestic or foreign producers. The advantages of integrated pulp and paper operations in the production of newsprint and certain other papers, in which ground wood is used in large quantities, are such that, if there should be a considerable increase in the production of such papers in the United States, it would probably be chiefly in integrated pulp-paper plants.

PULPWOOD

Production, imports, exports, and apparent consumptior.

United States production of pulpwood is not reported as such. It may, however, be estimated closely, at least for periods of several years together, from data on imports and consumption. Production thus estimated increased about 33 percent from 1925 to 1935, although in 1932 it had dropped to about 94 percent of the 1925 total.

Imports of pulpwood, nearly all coming from Canada, have ranged from 10 to 15 percent of annual consumption. Exports average less than one-half of 1 percent of estimated production.

Of the total pulpwood, domestic and imported, consumed in the United States during recent years, spruce represents about one-third, Southern pine a little more than one-fifth, and hemlock a little less than one-fifth, fir and poplar about one-twentieth each, and miscellaneous species, mill waste, and slabs the remainder. From 1931 to 1935 about four-tenths of the pulpwood used was reduced by the sulphite process, less than two-tenths by the mechanical process, over three-tenths by the sulphate process, and about one-tenth by the soda and semichemical processes. There was a marked increase in the

proportion of the total reduced by the sulphate process and a decrease in that reduced by each of the other methods between the period 1925-30 and the period 1931-35.

Regional consumption.

The total consumption of pulpwood, domestic and imported, in the United States increased steadily from 1921 to 1929, declined rapidly until 1932, and increased thereafter. Consumption in the Northeastern region roughly followed the same course. That region consumes about one-third of the total for the United States, the Pacific coast and Lake and Central regions each about one-fifth, and the Southern region about one-fourth. The consumption in the Pacific coast and Southern regions has increased markedly.

Almost three-fourths of the imported pulpwood is used in the Northeastern region and nearly all the remainder in the Lake and Central States. Of all the wood consumed in the Northeastern region, onethird is imported, in the Lake and Central region about one-fifth. The quantity of foreign wood used in the remaining two regions is negligible.

In the Northeastern region about 80 percent of all the wood consumed is spruce and balsam fir, most of the remainder being deciduous woods. In the Lake and Central region, approximately 50 percent is spruce and balsam fir, hemlock and jack pine making up most of the rest. In the South, 80 percent is yellow pine (including some jack pine), most of the rest being hardwoods. On the Pacific coast over 80 percent of the wood used is Western hemlock and white fir. Methods by which mills obtain pulpwood.

Pulp mills in the United States purchase some wood from loggers concerned chiefly with cutting saw timber, obtain some from land which they themselves own or upon which they control the right to cut timber, and purchase some from small operators or farmers. About 60 percent of the reporting mills obtained their supply in recent years entirely through purchase of domestic or Canadian wood, 3 percent entirely from owned or controlled timberland in the United States and to a small extent in Canada, and the remainder in part by both of these methods. Of the total domestic pulpwood consumed, about one-fourth comes from timberland owned or controlled by the pulp-producing concerns; the trend in recent years has been toward an increase in the proportion so obtained in the case of the Northeastern and Lake and Central regions, while in the Southern and Pacific coast regions the trend has been toward greater reliance on purchases. In all regions the imported pulpwood comes mainly from timberlands not owned or controlled by the receiving mills. Timberland holdings.

Pulp-producing concerns may, directly or through affiliated concerns, own timberland in fee simple, or they may own only the right to cut timber within a stated time and under given conditions of management and reforestation.

Over 14,000,000 acres of timberland are held by United States pulp producers or their affiliates, of which 11,000,000 acres are in this country and 3,000,000 in Canada, the estimated total timber stand on this land being nearly 75,000,000 cords. The Commission's investigation shows over two-thirds of the uncut land so held in the United States to be in the Northeastern, one-sixth in the Southern, and the

remainder principally in the Lake and Central region. The acreage of uncut timberland held by pulp mills in the Pacific coast region is small but the stand per acre is very much larger than in any other region. The average stand of recoverable pulpwood per acre on lands in the United States held directly or indirectly by pulp mills is somewhat over 5 cords per acre, as compared with less than 5 cords for the Canadian holdings of United States mills. However, the average for the Canadian lands is higher than for the lands in the Northeastern and Lake and Central regions, the two regions which make the greatest use of Canadian pulpwood. The average stand per acre for the holdings of pulp mills in the Northeastern, Lake and Central, and Southern regions is about 31⁄2 cords and in the Pacific coast region it is over 77 cords.

Cost of pulpwood to the consuming mills.

The Tariff Commission has not undertaken to ascertain the costs of production of pulpwood. Such costs would have little meaning since the value assigned to the standing timber in large measure, and the wages paid to the workers in some measure, depend on the price obtainable for the pulpwood at a given time.

The Commission obtained from representative pulp mills data on the delivered cost of pulpwood to them. The figures in the various regions differ so greatly that an average for the country as a whole would be meaningless. Considering only the domestic wood received by the mills, the average delivered costs of wood per cord, including all species and conditions, in 1934, by regions, were as follows: New England, $9.12; Middle Atlantic, $10.50; Lake and Central, $8.34; Southern, $4.85; and Pacific coast, $6.10. In the New England, Middle Atlantic, and Lake and Central regions, where most of the imported wood is used, the average cost per cord of imported wood was higher than that of the domestic wood, the difference in the case of New England, however, being relatively small.

Restrictions on Canadian pulpwood exports.

The exportation of unmanufactured wood taken from land the title to which is vested in the Dominion or Provincial Governments of Canada is subject to restriction. With one exception no restriction has been placed upon the exportation of such wood taken from privately owned lands in Canada. About 10 percent of the forest area of the Dominion is privately owned, the area in the several Provinces varying greatly. Of the land still owned or controlled by the Dominion or the Provinces, on about 15 percent the right to cut timber under lease or license has been granted.

The Provinces may make such regulations as to the cutting and disposal of timber on lands administered by them as they may consider in the public interest. Each has promulgated its own regulations and these have resulted in confining the exportation of pulpwood from Canada to the United States largely to such wood as is cut from privately owned lands.

Competitive conditions.

Only in the Northeastern and Lake and Central regions does imported pulpwood compete directly and in substantial amounts with pulpwood of domestic origin. The importation into these regions is the result of the depletion of their stands of spruce and balsam fir. The ratio of imports to domestic production of pulpwood in these