30 cents a thousand duty. If the duty should be removed, we are down and out. They have the advantage of us in timber. They have the advantage of us when it comes to making shingles, to the extent of between 15 and 20 cents a thousand in the raw material. They have the advantage of us in labor at least 15 cents a thousand, which makes up the 30 cents they have to pay in duty, so when we consider what they save in timber and what they save in lumber, it totals up the 30 cents duty which they have to pay. If the duty is removed, you can all see we will lose our business, and the mills will be closed and our men will be out of employment, and the conditions in our State would be hard indeed for the shingle manufacturers. Of that there is not the shadow of a doubt. When it comes to the tariff question in the shingle business, if the duty is removed, we are right up against the real thing. Our men that are in our employ in the shingle business are all Americans; they are all white laborers. We do not employ oriental labor at all. Our men are well cared for. We provide good, comfortable quarters for our men. We have good boarding houses, and we give them the very best; we think they are entitled to it. Now, is it reasonable or is it fair for this Government to expect us to compete against conditions on the other side of the line, where they employ oriental labor, where men can work from 80 cents to $1.25 a day in the shingle business, and live in quarters such as they do? Is it fair we should have to compete against those conditions? I consider it only just and right that Canada should have the Canadian market, but I think it only just and right that the Americans in the State of Washington should have the American market for their product. Mr. HILL. I was out in that country in the year 1895, and shingles were then selling for 90 cents a thousand. Mr. MCMASTERS. I think so. Mr. HILL. They were then free. A duty of 30 cents was put on them and the price is now, instead of $1.20, up to $1.50 and $1.60. What is the reason for the additional advance of 30 to 40 cents a thousand? Conditions have Mr. MCMASTERS. It is the same as in lumber. changed. Timber is more expensive. Labor has advanced and supplies have advanced. Mr. HILL. Is labor more expensive than it was ten years ago there? Mr. MCMASTERS. Yes, sir; we pay more wages now than we did then. Mr. HILL. Stumpage has gone up some? Mr. MCMASTERS. Yes, sir; stumpage has gone up some. Mr. RANDELL. You say it is a question of life and death with you there. If the United States had been looking out and had taken in the territory now occupied by British Columbia it would have ruined you people? Mr. MCMASTERS. We would not have had our oriental labor. Mr. MCMASTERS. Yes. In British Columbia the orientals work for a good deal less in the shingle mills than we pay our men. Mr. RANDELL. I thought you said it took educated labor for the shingle business? Why is it the cost of production of lumber in British Columbia is, as to labor cost, less than in the United States, and when you take shingles, which you say require educated labor, that there the labor costs more than in the United States? How do you account for that? Mr. MCMASTERS. A Chinaman will pack a thousand shingles for less than an American. Mr. RANDELL. I understood you to say that, as applied to the lumber industry, they can not compete? Mr. McMASTERS. I confined myself to shingles. I did not mention lumber. I came here to tell about the shingle industry. I want to tell you as nearly as I can why we can not compete. Mr. RANDELL. Why is it the cost of labor is more in making lumber than it is in making shingles? Mr. MCMASTERS. You mean just the reverse, do you not? Mr. RANDELL. Why is the labor cost of lumber in British Columbia less than in the United States, and the labor cost in making shingles more in the United States than it is in British Columbia? Mr. McMASTERS. I do not know the cost of labor for making lumber is greater in British Columbia than it is in the United States. Mr. RANDELL. That is not borne out by your knowledge of the conditions? Mr. McMASTERS. No, sir. Mr. CLARK. Is the red cedar of Washington anything like the red cedar that grows in the Mississippi Valley? Mr. McMASTERS. I am not acquainted with the red cedar of the Mississippi Valley. Mr. CLARK. Do you make the wood of lead pencils out of this red cedar of Washington? Mr. MCMASTERS. No, sir. Mr. CLARK. What is the reason you can not? Mr. MCMASTERS. Possibly we could. Mr. CLARK. The lead-pencil cedar seems to be a very peculiar product. The reason I ask that question is to suggest to you that if you can do it, you had better get at it. I read an elaborate statement not long ago in some one of these trade journals that the red cedar, out of which lead pencils is made or which is used in making lead pencils, is almost completely exhausted in the United States, and for that reason that they were advising some kind of manufactured article, or trying experiments to see if they could not make lead pencils from some other product. The red cedar which they use for that purpose is so completely exhausted in the United States that they have gone down into southern Missouri and bought up old fences that have been in use down there for twenty or thirty years and replaced them with the best woven-wire fences they could get in exchange for those old cedar rails. If you can make lead-pencil wood out of your cedar, you will find a new use for it. If you can put it to that use, why do you not get at it and study that question? Mr. McMASTERS. We will have to do so. I thank you for that suggestion. Mr. CALDERHEAD. There is a great difference between the two cedars. Mr. CLARK. What is the difference? Mr. CALDERHEAD. The cedar which you mention grows two rapidly-that is, the Washington cedar. Mr. CLARK. What difference does that make? 61318-TARIFF-No. 9-08-10 Mr. CALDERHEAD. It is coarse grained. The cedar in the Missouri Valley grows very slowly and is not coarse grained. STATEMENT OF D. E. SKINNER, OF SAN FRANCISCO, CAL. Mr. SKINNER. Gentlemen, it is practically your closing time, and if you want me to say anything, I will say it. I would prefer, however, if you would reverse the order of things and ask me questions for the next ten minutes. The CHAIRMAN. Oh, no: if you have a statement to make you may make it. Mr. SKINNER. I represent the Port Blakely Mill Company. I may say that I happen to be a representative of the corporation that has probably enjoyed the largest output of any single concern in the United States in lumber for the last fifty years, especially the largest export. We have been particularly interested in the export portion of the business, and as this duty applies to that portion of the business, it will appeal to you that a reduction of the duty would probably have little effect on our business, for at least 60 per cent of our business is export business, and we wish to have this protection. The practical result of the thing would be perfectly apparent to anyone studying it, and that would be that any increase in the consumption of lumber or the production of lumber that would be consumed in the United States would force those who are competing with us into other markets, who naturally now ship coastwise, to send a portion of their material into our channels for export trade. We find that our market fluctuates up and down, and follows the market of the East and coastwise trade, just the same and in the same ratio of prices. I noticed the other day that Mr. Batchelor, who, the paper said, was the chairman, I believe, of the Farmers' Grange, spoke here at a meeting, where he said that the grange wanted everything taken off the protective list that allowed the manufacturer of American products to sell in the United States at a higher price than he sold abroad. I want to say to you frankly we can refute that statement in regard to our business. We ship all our products at least on an average of 20 per cent higher to export trade f. o. b. the mill than we do to the American trade. That can be explained on account of the fact that it takes sometimes a little more difficult sizes, sometimes a little better grade, and to some extent because the material that carries the sap will not stand a long voyage. Mr. HILL. On that export trade you meet the foreign competition of British Columbia? Mr. SKINNER. Yes, sir. Mr. HILL. How do they get 20 per cent more for it than they can at home? Mr. SKINNER. We all get 20 per cent more for it. We all get 20 per cent more in price. If the price of lumber f. o. b. the mill for shipment east is $10, I should say without any question the average price for shipment export, f. o. b. the mill, would be $12. Mr. HILL. Do you say that 60 per cent of your trade is export trade? Mr. SKINNER. Our particular mill, understand, exports. Mr. HILL. Do you export any to British Columbia? Mr. SKINNER. Oh, gracious, no. We could not carry coals to Newcastle. We ship to Australia, and principally to the west coast of South America and the Orient, and in 1906 we shipped, I think, 12,000,000 feet to New York City, around the Horn. Mr. HILL. You get higher prices export from Seattle than you get for domestic trade? Mr. SKINNER. Yes, sir. I live in San Francisco, because we happen to need the facilities for banking and exchange conditions there, and cable conditions, which we can not secure at Seattle. Mr. HILL. You get 20 per cent more for your export lumber than you do for lumber sold at home, for the same grade? Mr. SKINNER. Yes, sir. Mr. HILL. And on that export trade, of course, you meet the competition of British Columbia, so that export prices are 20 per cent higher in full competition with British Columbia, and yet you fear British Columbia shipping into the United States? Mr. SKINNER. Yes, sir; by all means. If you would encourage that trade, Mr. Hill, you would have an increase of 40 per cent of the product which they can not ship export; to such an extent we would have to find a market somewhere at any price, and it would have to come here. I will tell you frankly I want to distinguish, and I want the committee to distinguish, the difference between the manufacture of lumber and the holding of timber. I am not unwilling to admit that I am a large holder of timber, and I think I have a perfect right to invest in timber, even though I do not own a sawmill. And I think I have a perfect right to own a sawmill, even though I do not invest in timber. I want that distinction made. Another thing I should like to explain, if I may, is that we have watched this situation for a great many years, and although I am not old enough to have started with the company when it started, we have the history of it still on our books. We know that the increase in population in British Columbia and in the territory that is adjacent to British Columbia is not large enough to increase their output very rapidly. The result will be that we will have that timber there ten or fifteen years from now without any cost to us, and it is a pretty good storehouse for us to keep it in, too. Other gentlemen have tried to explain to you, and I believe very satisfactorily, the difference in the cost of maintenance of timber reserves on this side of the line and on the other side of the line. I am also frank to admit I think it has been a very good thing indeed that there have been large increased holdings of timber land in private hands. The Government to-day represents probably a quarter, or at least 20 to 25 per cent, of the holdings of timber in the United States. I presume if the Government had gone on and sold that 20 or 25 per cent which they hold under the homstead laws it would have all been destroyed. Mr. HILL. On that theory, when timber is all cut off in Washington and Oregon you will be in favor of the free admission of lumber from British Columbia? Mr. SKINNER. No, sir. Those who have timber limits in British Columbia want to occupy this market to-day. I am quite confident, in the case of the big corporations, from all I can learn from my associates and from others, that they are simply figuring on the cruise, and they have not got 40 or 50 per cent even of the individual statements of cruise. Mr. HILL. Your idea would be to maintain the duty on lumber to expedite or permit the American product in Washington and Oregon to be cut off, with a view of ultimately having free trade when it is cut off, and letting the British Columbia lumber into the United States. Mr. SKINNER. No, sir; that is not my idea at all. They will not increase their output proportionately over there, and that timber will remain there, and when it does come here the price will be high enough so that they can pay $2 or $3 or even $5 a thousand duty, and this Government will get something out of the revenue from that lumber that comes here. I do not care what the duty may be, that timber will come here. Kindly understand, too, that we have come in conflict with all the conditions all over the Pacific, and that the Canadian side is not the only side we have to confront. There is the Yahoo River and the Mexican district, and, in fact, I should like if I could show you that that which lies just across an imaginary line is not the only competition we have to confront. The CHAIRMAN. We will take a recess until 8 o'clock. (Thereupon, at 7 o'clock p, m., the committee took a recess until 8 o'clock p. m., Friday, November 20, 1908.) |