Mr. KNAPPEN. No, sir.

Mr. HILL. And where American citizens are debarred from purchasing those rights?

Mr. KNAPPEN. No, sir.

Mr. HILL. Any American citizen can go in and bid on a parity with the Canadian?

Mr. KNAPPEN. Yes, sir.

Mr. GRIGGS. Does Canadian lumber compete with the lumber of the South? Is there any real competition?

Mr. KNAPPEN. I do not think there is much real direct competition. Of course the argument of the interested lumbermen would be that with the introduction of Canadian lumber the white pine lumbermen might have to sell at a lower price now, and therefore cover a larger area, and in that way get farther South and in competition with the yellow pine.

Mr. GRIGGS. Could the Canadian lumbermen compete with the Georgia and Alabama and Mississippi lumbermen with the tariff taken off?

Mr. KNAPPEN. I think practically none at all.

Mr. BOUTELL. How would it be with the Mexican?

Mr. KNAPPEN. As to Mexican, Mr. Boutell, my understanding as to Mexico is that while there are some considerable forest areas there, it is not yet commercially available, and therefore can be practically dropped out of this discussion.

Mr. CLARK. Is it not a fact that they are shipping yellow pine into Canada now?

Mr. KNAPPEN. Yes, sir.

Mr. CLARK. That is, shipping it from our Southern States into Canada?

Mr. KNAPPEN. Yes, sir.

Mr. CALDERHEAD. You stated, Mr. Knappen, that the United States is the leading export nation in lumber. What proportion of our export goes to Canada?

Mr. KNAPPEN. My recollection is that our exports to Canada in 1907 were between nine and ten million dollars. If you put it at $9,000,000, that would be about 15 per cent.

Mr. CALDERHEAD. From what part of the United States did it go? Mr. KNAPPEN. A very considerable part of it went from the Southern States, but exactly what percentage I can not say. It seems that in the manufacture of agricultural implements this southern wood is much preferred.

Mr. CALDERHEAD. Hard pine, you mean?

Mr. KNAPPEN. Yes; and one of the large manufacturers of agricultural implements in Canada told me that practically all the timber they used in their industry was brought from the Southern States.

Mr. UNDERWOOD. You mean when they wanted good lumber they sent down there? [Laughter.]

Mr. KNAPPEN. That would be satisfactory to southern pride to put that interpretation on it.

Mr. RANDELL. What portion of the United States would be first denuded of timber, according to the present trend?

Mr. KNAPPEN. I should say that the States that will first be denuded of timber are Michigan. Wisconsin, and Minnesota. They are in the greatest danger now. That does not take in account the States

that have been practically denuded in the past, but existing lumber regions, I should say.

The CHAIRMAN. Åre there any further questions? If not, that is all, Mr. Knappen.

Mr. KNAPPEN. We want to file a brief a little later.

The CHAIRMAN. You may do so at any time until the 4th of December; now, if you are ready.

STATEMENT OF MR. ARTHUR ROGERS, OF MINNEAPOLIS, MINN.

Mr. ROGERS. Mr. Chairman and gentlemen, I am a retail dealer as well as a manufacturer in Canada. My retail interests are this side of the line. I also have some interests on the other side of the line. As a retail dealer I am in favor of the removal of the tariff on lumber on the theory of the broadening of the markets?

Mr. UNDERWOOD. Do you live in the United States?

Mr. ROGERS. Yes, sir. I live in Minneapolis. I am in favor of the removal of the duty on lumber on the theory that the broadening of the markets would have a tendency to reduce the price of lumber to the consumer, and in reducing the price of lumber to the consumer it is not on the theory entirely that the consumer would be the only person benefited, but by reducing the price to him it would enlarge our business to that extent.

A question was asked of the gentleman before me with reference to selling lumber from the United States in Canada. The company I represent has lumber yards in Canada. During this year we have purchased a large quantity of lumber in the United States and shipped it into Canada, because we could buy that lumber in the United States for a less price per thousand feet than we could afford to deliver it from our own mill in British Columbia, because the cost of production, as we understand it, in British Columbia is higher than in the United States. We believe that if the American lumberman can ship his lumber to us as consumers, we as producers should have the same privilege of competing with the American on the same ground as he can compete with us. We have timber in the United States and we have timber in Canada. I do not believe that our timber in the United States would be affected in price by the removal of the duty, but it would enlarge our market in Canada without question. It would have this effect: That in years to come, on the very rapid advance in the price of lumber from the manufacturer to the middleman, the opportunity which the Canadian mill would have in this rapid advance would enable the retail dealer to maintain a more equitable market, and would not compel him to either sell his lumber at a much lower price or to advance it and then attempt to reduce, and to advance and reduce as the market advances and reduces on this side of the line. I do not believe that the price of lumber in the United States would be very materially reduced, on the average. I believe, however, that it would have a tendency to prevent rapid advances, because of the fact that with the competitive markets of the whole North American continent north of the Mexican line practically opened up it would give a man a larger market and better opportunity for competitive buying.

The ultimate consumer, if I may anticipate a question that will probably be asked, in our case is the farmer. We sell to the farmer.

Our price of lumber is based absolutely on the cost of the lumber to us. If we can buy fir lumber from the countries of pine lumber, from the Spokane district, at a certain price per thousand, while we do not advance and lower our prices as rapidly as the manufacturer sometimes does, at the same time the average of our retail price is based on the average of our cost of lumber from the manufacturer himself. We believe that if the duty was taken from lumber there would be a lower average price-not necessarily a lower price continuously, but a lower average price of such a nature that we could have our price based on a lower average, and consequently sell at a more uniform basis year after year.

I am inclined to think I will be asked, and in all probability will be asked, Is the price of lumber too high? From the retailers' standpoint, the lower we can sell our product the better we like it; not because we do not want to make a profit; we do; but we want the man who sells to us to make a profit. If we can run a lumber yard at a $100,000 investment, because the lumber costs $2 a thousand less, we would rather do that. We can make more money. The percentage of profit is the true basis that we have in mind all the time.

The question of cost of manufacture, I presume, other gentlemen will enlarge upon, and unless you wish to ask me some questions that is all I have to say.

The CHAIRMAN. I understand when the manufacturer advances his price, you follow it, but not rapidly ?

Mr. ROGERS. We can not do it; we do not follow him rapidly.

The CHAIRMAN. And when he lowers his price, you follow him in that?

Mr. ROGERS. Yes, sir; but not rapidly.

The CHAIRMAN. If one of your rivals happens to get out of highpriced lumber and buys a new invoice in the meantime and puts the fumber down, you follow more rapidly?

Mr. ROGERS. We have had that experience in the past twelve months, and unfortunately we have had to do it. We had a large amount of high-priced lumber.

The CHAIRMAN. The competition of lumber dealers in Minneapolis forces you sometimes to put down the price before you are ready for it, does it not?

Mr. ROGERS. Yes; but we are not dealers in Minneapolis. Our field is with the farmers west of Minneapolis.

The CHAIRMAN. But the tendency is to follow?

Mr. ROGERS. Yes; but it does not follow rapidly.

Mr. BOUTELL. You think the competition among the Canadian cutters would so bring down the initial price of lumber here that this $2 a thousand could be passed on to the farmer?

Mr. ROGERS. I do not know that the $2 could, but I should say that the minute the Canadian forces the price down, if we absorb one dollar of that, the other dollar would ultimately get to the consumer.

Mr. BOUTELL. So that, in your opinion, as a man dealing with the ultimate consumer, the repeal of the lumber duty would benefit the consumers as a class, in two ways: First, by an actual reduction to the individual purchaser, and, second, by greater uniformity in prices?

Mr. ROGERS. I think the last would be a greater advantage than the reduction would be-the uniformity of price.

Mr. BOUTELL. You state with greater confidence that there would be uniformity of price than that there would be a lowering of price. Mr. ROGERS. That would be the tendency.

Mr. CLARK. What has produced the enormous advance of lumber in the last eight or ten years-that is, to the man that uses it?

Mr. ROGERS. I presume there are several things, but I presume the principal point has been the desire on the part of everyone to make some money. We would like to make some money.

Mr. CLARK. It has been the desire to make more money than they ought to be allowed to make.

Mr. ROGERS. That is a question, I suppose.

Mr. FORDNEY. Has the price of stumpage and labor advanced during that time?

Mr. ROGERS. Stumpage has advanced quite a little, but it has not advanced anywhere near as much as the price of lumber has advanced. Mr. FORDNEY. You are a retailer, are you not?

Mr. ROGERS. Yes.

Mr. FORDNEY. Where are your yards located?

Mr. ROGERS. In North Dakota, Minnesota, and Nebraska.

Mr. FORDNEY. You are a Canadian manufacturer, are you not?

Mr. ROGERS. Yes, sir.

Mr. FORDNEY. Do you supply your yards from Canada?

Mr. ROGERS. Our American yards?

Mr. FORDNEY. Do you supply your American retail yards from the mills in British territory?

Mr. ROGERS. No, sir; but

Mr. FORDNEY. You would do it if you had free trade on lumber? Mr. ROGERS. We would if the price of our mill product was lower, or as low, as the prices of those who enter into competition with us were; otherwise, not. We would get the most out of it that we could. If we were in competition with other mills in Canada, and our retailers could buy cheaper from our competitors than we are willing to sell for, we would buy from the competitors.

Mr. CRUMPACKER. Is there not a strong sentiment among farmers in the entire Northwest for the abolition of the tax on lumber? Mr. ROGERS. There is; yes, sir.

Mr. FORDNEY. What do you mean by "the entire Northwest?" Mr. ROGERS. Well, we are doing business in Minnesota and North Dakota, and we know there is such a sentiment there, and it exists to some extent in Nebraska.

Mr. FORDNEY. How about Washington, Oregon, Idaho, and Montana?

Mr. ROGERS. They are producing States, and I do not know that I care to answer the question in regard to them.

Mr. FORDNEY. But that is practically the Northwest, is it not? Mr. ROGERS. But I did not suppose it was intended to cover the whole map of that country.

Mr. FORDNEY. But he said the "entire Northwest."

Mr. ROGERS. Well, in those prairie States they are consumers, not producers.

Mr. CRUMPACKER. I suppose you include Indiana?

Mr. ROGERS. I would be glad to.

Mr. FORDNEY. When you purchased lumber in Canada from the Washington manufacturer did you buy it any cheaper than for the same grade of lumber in other parts of the United States?

Mr. ROGERS. I do not think we did.

Mr. FORDNEY. You are not the witness, then, that Mr. Knappen referred to to show that the American was selling cheaper in Canada?

Mr. ROGERS If I am, Mr. Knappen did not understand the position. I told Mr. Knappen that I bought lumber in the United States because the American lumberman could afford, I imagine, to sell that lumber cheaper than the Canadian.

Mr. FORDNEY. The lumber business on the Pacific coast in the last twelve months has been in a bad condition, has it not?

Mr. ROGERS. Probably no worse than the lumber business anywhere else, relatively, excepting the Mississippi Valley.

Mr. FORDNEY. I think so.

Mr. ROGERS. Well, possibly you may be better informed than I am. Mr. FORDNEY. The freight rates are against them on the low grades of lumber, are they not?

Mr. ROGERS. Freight rates have only been advanced in less than sixty days, so that that could not be used over the twelve months.

Mr. FORDNEY. Now, Mr. Rogers, in favoring the reduction of the duty on lumber, are you speaking from the consumers' standpoint in the United States or the manufacturers' standpoint of the Ĉanadian or British Columbia lumber, or both?

Mr. ROGERS. As a matter of fact, the British, of course, would like to have it; there is no question about that. Every man is selfish, and we are probably just as selfish as you are in Michigan, or anywhere else, so far as lumber is concerned. As middlemen, we would like to see it off in the United States because we can take care of our trade to a better advantage by having a larger market to draw from.

Mr. HILL. You have lumber yards in Canada as well as in the United States?

Mr. ROGERS. Yes, sir.

Mr. HILL. Do you sell the southern pine in Canada?

Mr. ROGERS. None at all.

Mr. HILL. How long have you been in business?

Mr. ROGERS. I have been in the lumber business twenty-seven years. Mr. HILL. When you began business at retail, what was the price of first-class uppers?

Mr. ROGERS. I don't remember that.

Mr. HILL. What are you selling them at now-for the selects, first quality, white-pine lumber?

Mr. ROGERS. Our best finished lumber, probably of which very little is sold, is about $60, roughly.

Mr. HILL. You would not call that what is known to the trade as uppers?"

Mr. ROGERS. The average trade that we handle does not use much high-grade lumber.

Mr. HILL. You can not get it?

Mr. ROGERS. Oh, we can get it.

Mr. HILL. Where from?

Mr. ROGERS. We can buy of the Cliquot Lumber Company. They have a representative here.

Mr. HILL. An American product?