Pennsylvania, Ohio, Indiana, and the Middle West. Lumber can be transported to these gateways at an average of $1.75 per thousand. These places, besides being great distributing railway shipping points, are directly the largest consuming cities of lumber in this country, both in the building line and the cutting up into the various factory lines for boxing and crating material. This territory comes in direct competition with the hemlock from Pennsylvania and Michigan and Wisconsin, and with the various woods, like yellow pine, poplar, and gum, from south of the Ohio River, subject to transportation charges alone of from $5 to $10 per thousand, as against $1.75 from Canada. Mr. UNDERWOOD. Subject to how much? Mr. HINES. Subject to a difference in favor of Canada of $1.75 by water as against $5 to $10 per thousand, probably a maximum of $10 per thousand, by rail in this country. By actual experience and statistics the importation of lumber from Canada in both volume and value per thousand feet has increased most extensively. In 1898 the United States imported from Canada 353,000,000 feet, valued at $9.91 a thousand feet. In 1907 there was imported practically three times that amount, or 924,000,000 feet, at about 100 per cent increase in value per thousand feet. Mr. HILL. In making your comparison between $1.75 freight by water from Canada and the $10 rate by rail transportation in the United States, you are making the comparison between two different kinds of lumber, are you not-yellow pine, and white pine from Canada? Mr. HINES. No, sir. Mr. HILL. Where do you get your white pine in the United States at $10 a thousand? Mr. HINES. We are manufacturing at four large mills-at Ashland, Wis.; at Iron River, Wis.; at Mason, Wis; and at Hayward, Wis. Mr. HILL. That does not cost any $10 a thousand, does it? Mr. HINES. I said from $5 to $10 a thousand. To put the lumber from Hayward, Wis., to Buffalo, N. Y., by rail, rough lumber, costs about $7 per thousand. To Detroit it costs about $6.50 per thousand. Mr. HILL. By rail? Mr. HINES. Yes, sir. Mr. HILL. Why do you not put it there by water? Mr. HINES. Those points are located away from the Lakes. To put it there by water you would be obliged to ship first to the lake ports and pay a rail rate, then an unloading charge, then a reloading charge, and then a water-transportation charge, making it almost the same. Mr. HILL. In one case lumber from Canada is in the rough and in the other case it is delivered by rail here dressed; is it not? Mr. HINES. No; I am citing a case of both in the rough. If you dress it in the United States it costs a further charge. Mr. GRIGGS. Is the Canadian lumber all made on the coast? Mr. HINES. That comes through by water, all of it. Mr. HINES. Yes; I think, in a conservative way, that what they are manufacturing in the Georgian Bay district has a life of at least fifty years ahead of it. Mr. CLARK. I know; but part of the Georgian Bay district is a hundred or 200 miles from Georgian Bay. Mr. HINES. Those rivers extend from 100 to 200 miles up. Mr. CLARK. All of the timber in the Georgian Bay district does not grow so close to navigable waters that you can roll the logs down and raft them down, does it? Mr. HINES. Nature has given Georgian Bay very peculiar advantages. There are a number of streams, at least 15 or 20, that run into the lake from a distance of 100 to 300 miles north, and the distance between those streams ranges all the way from 10 to 30 miles. The timber is taken over to one stream or the other stream. Mr. CLARK. Instead of having the most fortunate country on earth, we seem to have the most unfortunate one about everything. Mr. FORDNEY. About all the lumber manufactured in the Georgian Bay district is manufactured right on the bay, is it not? Mr. HINES. All—all. Mr. GRIGGS. Will it all continue to be manufactured there? Mr. HINES. Naturally; nature has so arranged the situation that the cheapest way to transport logs is by water. The water flows to the lake, and the logs will almost naturally float down to the lake at a very small cost. Mr. HILL. That was true at Bay City and Saginaw as long as the logs lasted, was it not? Mr. HINES. Yes, sir. Mr. GRIGGS. We have many rivers in Georgia on which timber grows, but we have no such situation as that, because they are 15 miles apart. A tramway has to be built to carry the logs out, and that is a large part of the railway cost. Mr. HINES. But up north that is done in the winter time, with snow and ice roads, at practically no cost; while down south the yellow pine will not, in all cases, float. Up north our pine timber floats. Mr. GRIGGS. Our pine will float, too. Mr. HINES. Yes; to some extent. There is some difference in it. Mr. GRIGGS. I never saw a pine log sink yet. Mr. HINES. Does not the great extra cost in transportation from our mills to the respective places above named, and the large increase in the importation, warrant, in a most reasonable way, that our industry should have protection? And would it not be a mistake to give Canada further advantages by considerably lowering the present tariff? Our business is the largest purchaser of farm foods and farm products of any industry in this country, and needs assistance at your hands in the way of maintaining, if not increasing, the present tariff. The present tariff is only one for revenue, and is not one of sufficient size to be called protection, as in the case of the tariff on many articles like iron and steel, which enter into the manufacturing lines and are direct competitors with us. Mr. GRIGGS. Right there, do you mean to tell us that you are here advocating a revenue tariff on lumber, and that you do not care anything about the protective part of it? Mr. HINES. No, sir: absolutely on the contrary. We are here advocating a protective duty for this industry. Mr. GRIGGS. But you say this is not one. Mr. HINES. In our judgment it is not, as compared with other articles that enter into direct competition in our building lines, like steel. We say that an average of 11 or 12 per cent is not a protective duty as compared with other articles having from 40 to 60 per cent in comparison. Mr. GRIGGS. Then it is a comparatively protective duty? Mr. HINES. That is what the facts show; yes. For the past several years, as the supply of some kinds of lumber has decreased, a mistaken opinion has become prevalent among many people. It has been stated broadly that the supply of lumber has greatly decreased, when really only certain kinds have been decreasing, which has had the effect of influencing the consumer to use other kinds practically as suitable for the ordinary purposes as they have been using white pine for and thus giving value to what was considered useless. Twenty-five years ago the average farmer and carpenter and box factory would not use anything but soft white pine, even for the ordinary common framing lumber. As it became harder to get and more expensive, necessity compelled him to look into the suitability of Norway pine, which at that time had no commercial value. I remember distinctly of first introducing Norway in the Middle West twenty-five years ago, going so far as to carry samples of it worked to bevel siding and flooring, and showing that it would take paint and answer practically the same purposes as white pine. We even furnished railroad companies sufficient samples in the way of roofing and siding to build cars, thus introducing it, and now it is used exclusively for framing and for car siding and roofing and for most purposes where white pine was formerly used exclusively. Further changes have taken place during the past ten years. Hemlock has been gradually introduced in the place of Norway pine, until now it is being manufactured in large quantities in Pennsylvania, Michigan, and Wisconsin; and it has been demonstrated that for many purposes it does equally as well as many other woods. That has brought into the market timber that formerly had no commercial value and kept alive mills and towns that for many years were supported by the pine industry. The hemlock stumpage at the present time is netting the manufacturer from $2 to $3, selling at the mill points for from $11 to $13 per thousand. The difference of from $8 to $9 consists entirely of charges for labor and supplies. Our lumber industry pays out more for horses, for the food for the horses, and for the food supplies for men than is paid out in wages. Take the duty off lumber, and where would the value of hemlock stumpage go? The manufacturer would not realize anything, and, necessarily, unless he could reduce the price of labor, the industry would have to go out of business. Considering that the cost of transportation to put this lumber in the market is from $4 to $6, as compared to $1.75 in Canada, you must appreciate his competition and the importance of giving this great industry some protection. There are at least 250 mills in Michigan, Wisconsin, and Pennsyl vania manufacturing hemlock to-day. In most cases it is the only employment offered in these territories, the men being employed in the woods in the winter time and in the summer time in the sawmills and yards. All are great buyers from our home farmers. There is still considerable pine timber located in Wisconsin and Minnesota, estimated at 20,000,000,000 feet. The State has been selling timber for from $7 to $11 per thousand on the stump. Add to this the cost of operating, place fumber on the free list, and the manufacturer would be in a most serious position in endeavoring to sell his product in any of the large cities or consuming districts, all of which are reached by cheap water transportation from Canada. Labor in this country has become educated to a high standard of living, and even under the terribly depressed conditions of the past year it has been next to impossible to get it to take anything less. During the last year the value of most kinds of lumber decreased 25 per cent, but labor did not decrease over 7 per cent, amounting to about 25 to 35 cents per thousand feet, while lumber declined $3 to $5 per thousand. Mr. GRIGGS. Has not a large percentage of that price come back, though? Mr. HINES. No, sir; not yet. Mr. GRIGGS. None of it has come back vet? Mr. HINES. Some kinds of lumber to-day have increased probably 5 per cent; but we have not yet seen any material advance. Mr. GRIGGS. Has not yellow pine increased from $4 to $6 a thousand? Mr. HINES. No, sir; absolutely not. I should say yellow pine has increased on an average of about 5 per cent. That would mean from 50 cents to $1.50 a thousand. Mr. GRIGGS. That is what they tell me; that is all I know about it. Mr. HINES. No; our selling price would not average over a dollar per thousand higher than during the lowest period of last year; and, buying in Chicago, we have not as yet paid over a dollar a thousand for anything in excess of the low price of last year. A new feature in the past five years has come greatly to the front by the manufacture of yellow pine in the Southern States, which in volume now exceeds any other kind of lumber produced in this country, and very largely exceeds the amount of pine lumber that was ever produced in the North during the period of its greatest production. Last year this industry reached 13,000,000,000 feet, as compared with 3,250,000,000 of pine. This lumber is fast taking the place in the markets of all other kinds of pine and hemlock, and is becoming the universal material for all ordinary purposes. Mr. UNDERWOOD. Let me ask you a question right there. In the case of yellow pine intended for structural work, there is no competition with the Canadian lumbers, is there? They do not compete at all? Mr. HINES. They do, absolutely. You can buy Norway pine in Canada to-day at a basis of from $13 to $14 per thousand. We purchased last summer in the neighborhood of 20.000.000 feet at from $12 to $13.50 a thousand in Georgian Bay. The freight was from $1.50 to $1.87; take $1.75 as the average. The duty of $2 would make it $3.75-an average of $13 in Canada, which would make it $16.75 in Chicago. Take yellow pine from the South, and you are up against the 26-cent freight rate. In the rough it weighs about 43 pounds, costing about $11.50 to freight it alone. That would leave, at the mill points, about $7 a thousand for your timber. Mr. UNDERWOOD. Then, if the Norway pine is a competitor in the same field that the yellow pine occupies, how do you account for the fact that the yellow pine of the South goes into Canada and comes in competition with it?" Mr. HINES. That is a very small percentage-not over 5 per cent* of the amount produced; and that is only extremely large timber and heart stock. But to get that heart stock you have got to cut the balance of the log into something else and sell it. You have got to cut your top logs, your branches, and your side logs, and it has got to be put in other markets. Mr. HILL. Mr. Hines, do you think that the tariff, in order to be a protective tariff (which you say you think you ought to have), ought to equalize the difference in freight between Canada and Chicago and the southern pine freight rates to Chicago? Mr. HINES. No; I do not say it ought to entirely; but I say that to attempt to reduce it would mean placing the lumber industry in this country at a still greater disadvantage than it occupies to-day. Mr. HILL. How do you reconcile that with the proposition that on the Atlantic coast, in New England, we can get the southern pine cheaper from the South than we can get lumber from Canada? Mr. HINES. I think you are mistaken about that. You can not ship yellow pine from the South Mr. HILL. I am talking about North Carolina.. Mr. HINES. Yes; North Carolina-you can not ship North Carolina lumber to the markets of New York and Philadelphia and Boston any cheaper than you can ship New Brunswick spruce and hemlock to those same markets. Mr. HILL. I am comparing it with Canada lumber. It is cheaper than that; it is cheaper than Ottawa lumber and Georgian Bay lumber. Mr. HINES. No; in the New York markets-and I was there on Tuesday-you can buy Canada spruce to-day cheaper than you can buy yellow pine. Mr. HILL. For how much? Mr. HINES. Cheaper in price than you can buy southern pine. Mr. UNDERWOOD. Does spruce come in competition with yellow pine? Mr. HINES. Oh, yes. In the ordinary building material the spruce is just as good for joists and scantling and for sheathing and for lath and purposes of that kind; it is exactly equal to the yellow pine. Mr. HILL. And a great deal better? Mr. HINES. Well, I want to speak in a conservative way. In my judgment, it is better. It does not contain the sap; but in a conservative way it is as good. The cost of transporting the lumber from the South to the consumer to the market, above referred to, averages from $7 to $10 per thousand. Compare this cost with the cheap water transportation from Canada, $1.75, and does this not warrant a further protection at your hands? The present value of stumpage in Mississippi and Louisiana is about $1, the cost of labor in operating being from $8 to $9, all cash, and which can not be reduced. Transportation amounts to from $7 to $10; and railroad companies are now claiming that they must increase the rates. If you deduct $2 per thousand tariff, what will it come out of? The railroad companies |